India-US probe into $150-mn drug syndicate ‘best practice’ case: FATF

In a rare recognition of India’s financial enforcement efforts, the Financial Action Task Force (FATF) has highlighted a joint investigation by the Enforcement Directorate and the US Department of Justice as a “best practice” case of international cooperation against money laundering and drug trafficking.

The FATF’s new ‘International Co-operation on Money Laundering Detection, Investigation and Prosecution Handbook’ details how the Indian and the US authorities worked in real time to dismantle a sprawling narcotics network that laundered more than $150 million through cryptocurrency and dark web marketplaces.

The network -- which was allegedly run by two brothers, identified in the case as Mr P and Mr B -- was engaged in the illicit distribution of fentanyl, heroin and LSD using encrypted communications and dark web platforms. Investigators found the brothers controlled over 8,500 Bitcoins, which were used to move illicit proceeds globally.

Following a request from Washington in 2022 under the Mutual Legal Assistance Treaty (MLAT), the ED launched a parallel probe into the group’s Indian financial links.

Officials unearthed transactions worth Rs 5.54 crore routed through a digital payment service provider, and seized 268.22 Bitcoins (worth Rs 130 crore) in April-May 2024. Assets worth Rs 9.67 crore linked to one of the accused and his wife were also attached provisionally.

The FATF noted that the case stood out for its unprecedented level of real-time coordination. US officials travelled to India to directly assist in interviews of the accused, while intelligence flows between the two countries ensured the investigation remained “effective and uninterrupted”.

In April 2024, one of the brothers, Mr P, was arrested and a prosecution complaint filed, striking a decisive blow to the syndicate.

The global watchdog said the case exemplifies how international cooperation can effectively counter complex, crypto-enabled money laundering operations.

The handbook also highlighted India’s recent systemic reforms to strengthen cross-border cooperation. The Ministry of Home Affairs has launched an online MLA portal and issued standardised guidelines for handling foreign assistance requests under the Criminal Procedure Code and the Prevention of Money Laundering Act.

According to the FATF, this streamlined system has reduced delays, improved clarity, and enhanced India’s ability to collaborate with other jurisdictions.

Officials in New Delhi see the recognition as a significant endorsement of India’s growing role in the global fight against financial crime. “This shows that our enforcement actions are not just domestic, but part of a global framework of cooperation,” a senior official said.

The FATF, which sets international standards for combating money laundering and terror financing, said the India-US probe serves as a benchmark for countries seeking to disrupt transnational crime through intelligence sharing and joint enforcement.