Case Law On International Fake Currency Rackets
1. State (NIA) v. Shahid Abdul Basheer & Ors (2013, India – NIA Special Court, Mumbai)
Facts:
The National Investigation Agency (NIA) busted a large fake Indian currency note (FICN) racket operated through Dubai, Bangladesh, and Pakistan.
Fake notes were smuggled into India via Nepal and Bangladesh borders.
The accused were linked to organized criminal networks allegedly supported by foreign agencies.
Legal Principles:
Sections 489A–489D, Indian Penal Code (IPC): Counterfeiting, possession, and trafficking of fake currency.
Unlawful Activities (Prevention) Act (UAPA), 1967: Applied due to national security implications.
Section 120B IPC (criminal conspiracy): For cross-border coordination.
Outcome:
Convictions under IPC and UAPA; key operatives received long prison terms.
Court observed that counterfeit currency circulation was an economic form of terrorism, destabilizing financial security.
Significance:
Landmark case where fake currency trade was legally equated with terror financing.
Established strong precedent for treating FICN rackets as national security offenses.
2. Directorate of Revenue Intelligence v. Mohammad Javed & Ors (2018, Delhi High Court, India)
Facts:
A DRI operation intercepted couriers at the Delhi airport carrying high-quality counterfeit Indian notes printed abroad.
Investigations traced the network to Pakistan-based printing units and intermediaries in Dubai and Kathmandu.
Legal Principles:
IPC Sections 489A–489C: Counterfeiting and possession of forged currency.
Customs Act, 1962: Smuggling of prohibited items.
Foreign Exchange Management Act (FEMA): Illegal transfer of value.
Outcome:
Court held accused guilty; counterfeit notes declared to be of foreign origin with intent to harm Indian economy.
Sentenced to rigorous imprisonment and forfeiture of assets.
Significance:
Established the principle that cross-border smuggling of counterfeit currency is both an economic and national crime.
Directed coordination between customs, DRI, and NIA for integrated investigations.
3. National Investigation Agency v. Rafique Sheikh & Ors (2015, Kolkata, India)
Facts:
NIA arrested a group of Bangladeshi nationals in West Bengal smuggling fake Indian notes through the Malda border.
The notes were found to be near-perfect imitations produced in foreign printing presses.
Legal Principles:
IPC Sections 489A–489D, 120B (criminal conspiracy).
UAPA, 1967: Applied because the racket had links to anti-national elements.
Evidence Act Section 10: Conspiracy evidence admissible against all conspirators.
Outcome:
Convictions of foreign and Indian nationals.
Court emphasized international cooperation and intelligence exchange to curb such rackets.
Significance:
Highlighted the transnational nature of fake currency crimes.
Strengthened border surveillance and legal coordination with Bangladesh.
4. State v. Abdul Karim & Ors (2002, Pakistan – Lahore High Court)
Facts:
A group of smugglers was arrested for circulating fake U.S. dollars and Saudi riyals through money exchanges and border traders.
Investigation revealed counterfeit printing presses operating in Karachi with links to Dubai and Malaysia.
Legal Principles:
Pakistan Penal Code Sections 489A–489D: Counterfeiting currency.
Foreign Exchange Regulation Act, 1947: Violation of currency transaction laws.
Outcome:
Conviction under anti-counterfeiting provisions; presses seized and destroyed.
Court emphasized that fake foreign currency circulation undermines international financial relations.
Significance:
One of the earliest South Asian cases treating currency forgery as an international economic crime.
Strengthened enforcement under Pakistan’s Economic Reforms and Foreign Exchange laws.
5. United States v. Ali Al-Marri (2011, U.S. District Court, Illinois)
Facts:
Al-Marri was found in possession of large quantities of counterfeit U.S. dollars imported from the Middle East.
FBI alleged links between the counterfeit ring and terrorist organizations financing operations through fake currency.
Legal Principles:
U.S. Code Title 18, §471–474: Counterfeiting and possession of forged currency.
Patriot Act: Applied for terror-financing offenses.
Outcome:
Defendant sentenced to federal prison for conspiracy and counterfeiting.
The court considered counterfeiting as economic sabotage with intent to finance terrorism.
Significance:
A milestone in U.S. law treating fake currency circulation as a terror-linked economic crime.
Strengthened cross-border intelligence sharing on counterfeit tracking.
6. State v. Nizamuddin & Ors (2019, Kerala, India)
Facts:
Kerala Police arrested a network smuggling high-quality counterfeit notes from Sri Lanka via sea routes.
The operation was found to be linked to international money-laundering syndicates.
Legal Principles:
IPC Sections 489A–489C: Counterfeiting and possession of fake notes.
UAPA Sections 16 & 17: For terror financing.
Money Laundering Act, 2002: Illicit transfer of funds through hawala networks.
Outcome:
Convictions for possession and distribution of counterfeit notes.
Assets seized under PMLA as proceeds of crime.
Significance:
Demonstrated overlap between counterfeit currency trade, money laundering, and terrorism financing.
Encouraged coordinated enforcement by NIA, ED, and RBI.
7. Bangladesh v. Rashid Chowdhury & Ors (2014, Supreme Court of Bangladesh)
Facts:
A racket was producing fake Bangladeshi taka and Indian rupees in the border district of Rajshahi.
Cross-border police cooperation led to arrests in both India and Bangladesh.
Legal Principles:
Bangladesh Penal Code Sections 489A–489D: Counterfeiting and conspiracy.
Mutual Legal Assistance in Criminal Matters (MLAT) used for coordination with Indian authorities.
Outcome:
Accused convicted; press and chemicals confiscated.
Cross-border treaty invoked for exchange of evidence and repatriation of accused.
Significance:
Strengthened regional cooperation in South Asia against transnational fake currency rackets.
Landmark for practical application of bilateral legal assistance treaties.
🔑 Key Takeaways from These Cases
Relevant Laws:
India: IPC §§489A–489D, 120B; UAPA, PMLA, Customs Act.
International: U.S. Code Title 18 §§471–474; Pakistan’s Penal Code §§489A–489D; Foreign Exchange Regulation Acts.
Nature of the Crime:
Courts treat international fake currency rackets as economic terrorism or financial sabotage.
Often connected to organized crime, terrorism, or money laundering networks.
Jurisdictional Cooperation:
Most cases involve joint investigations across borders, under Interpol or MLAT frameworks.
Punishment:
Convictions often carry rigorous imprisonment (7 years to life) and seizure of assets under anti-terror or anti-laundering laws.
Judicial Observation:
Courts emphasize that fake currency undermines economic stability and threatens national sovereignty.
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