TIOL-DDT 464 · Friday, 6 October 2006 · story 5 of 6

Money laundering, fraud, smuggling – Dalmia gets bail

Barely a week after he was indicted by a US court, on fraud charges, DSQ promoter Dinesh Dalmia was released from a Kolkotta jail yesterday.

An American Newspaper reported on September 30.

++ DineshDalmia, 45, of Fort Lee, and Ashish Paul, 45, of Norwood were charged with wire fraud and money laundering in a 16-count indictment handed up in U.S. District Court in Newark, U.S.

++ Dalmia, already the subject of a criminal complaint filed in March, is in jail in India on stock fraud charges.

++ Each wire fraud charge carries up to 30 years in prison, plus a $250,000 fine, and the money-laundering charges carry sentences up to 10 years and $250,000 each.

++The indictment accuses Dalmia of using three New Jersey companies he controlled -- Allserve, B2B Solutions and Vanguard Info Systems -- to secure multimillion-dollar financing from several lenders, including CitiCapital Technology Finance of Mahwah, G.E. Capital Finance of Connecticut and Fifth Third leasing Co. of Ohio between 2003 and 2005.

++ Dalmia, using the alias "Nick Mittal", allegedly obtained the money through lease-financing contracts for computer equipment and telephone lists for call centers for the debt collection and telemarketing businesses he supposedly ran.

++ As proof of his need for financing, Dalmia is alleged to have presented the lenders with fraudulent purchase agreements, invoices and delivery receipts that he and Paul had created.

++ Also, he allegedly deceived the lenders by showcasing virtually worthless, outdated equipment he had obtained from used computer dealers and was packaged in what appeared to be clean, new hardware casing.

++The money-laundering charges stem primarily from the movement of funds through shell companies.

The cases in India and the US are not related —- after Dalmia fled following the Calcutta Stock Exchange scam, he landed in the US and got involved in a scam there.

The CBI arrested him in February when he came back to India to flee the US authorities. Since March, he has been in jail for the Rs 120-croreCSE scam.

Following a Calcutta High Court ruling on September 27, metropolitan magistrate granted Dalmia bail on Thursday as the police failed file the charge-sheet against the accused within 90 days of his physical production before the Chief Metropolitan Magistrate. Kolkotta bail is not all freedom for Dalmia- CBI has other cases against him.