The financial pyramid of the Sandesara Indians in Tirana

The Indian brothers, sought worldwide for money laundering, have brought to Albania, besides their family and associates, the business scheme they have used in India and Nigeria. In the last five years, they have established a number of companies, through which it is suspected they continue the money laundering activity.

Author: Zylyftar Bregu

On Wednesday, August 23, 2023, at the office of notary J. Zh. in the former Block area of Tirana, one after the other entered Devak Patel and then Chetankumar Sandesara. The two men sought the drafting of a loan agreement, according to which Devak lent Chetankumar a total of 300 thousand euros. The notary may not have known, as one of them had an Albanian passport, that the individuals he was facing were none other than members of a large Indian family. Devak is a nephew in Chetankumar’s family, who, along with his brother Nitin, are accused in their country of origin, India, of stealing and laundering $725 million.

The content of the contract meets the circumstances that require the notary to apply enhanced due diligence under Article 6 of the guidelines for reporting suspicious transactions. Enhanced vigilance means that the notary not only had to investigate the clients who were signing a contract with such a large amount, the source of this amount, and the reason for its use, but also had to immediately notify the Financial Intelligence Agency. According to highly confidential sources, the latter agency has noted this information but has taken no action to verify, trace, or inform other investigation structures in Albania. When asked whether any specific action has been taken against the notary or if the authorities investigating money laundering have been notified, this entity has refused to provide information.

This transaction should have been flagged with a “red flag” because one of the individuals who appeared before the notary is a subject of media attention, not only in Albania but also globally. Chetankumar Sandesara, along with his brother Nitin Sandesara, Indian nationals wanted for money laundering worldwide, were granted Albanian passports by the President of the Republic through a special procedure. This fact alone should have alerted law enforcement authorities in Albania to pay attention to the activities of the two brothers.

The facts gathered by Investigative Network Albania indicate that the Sandesara brothers have established a fiscal pyramid in Albania. Materials analyzed by INA Media show that investigative and tracking institutions have overlooked a contingent of suspicious individuals who have come to Albania with accusations of criminal activity. The Sandesara brothers obtained Albanian citizenship nearly five years ago through a highly suspicious procedure, with the recommendation of the Minister of Tourism at the time, Blendi Klosi.

Sources from the Presidency confirm that the file for granting passports to the two Indian brothers only contained the signed request from former Minister Klosi and no additional documents. Just 20 days after the arrival of the minister’s letter (January 16, 2018), the brothers obtained Albanian citizenship.

Millions circulate, but they report losses every year.

Chetankumar Sandesara, along with his wife, Dipti, and his older brother, Nitin Sandesara, arrived in Albania in the second half of 2017 to evade arrest and investigation by the justice system in India.

Their choice of Albania was neither random nor temporary. They immediately filed for asylum and began the procedure to obtain Albanian citizenship.

Parallel to the citizenship application, the Sandesara brothers started their business ventures. On December 12, 2017, Chetankumar Sandesara registered the company Laxmi Reale Estate & Investment with his brother as a co-shareholder at the National Business Center, with the purpose of Construction, Real Estate, and Investments.

Three months later, Chetankumar Sandesara founded another company, this time with his wife as a co-partner. Tulja Reale Estate & Investment, focusing on construction, real estate, investment, and vehicle rental, became active alongside their first company.

The company owned by the brothers, Laxmi Reale Estate & Investment, was established with an initial capital of 100 lek (1 euro). The balance sheet submitted by the company itself raises suspicions about the activities they conduct in our country. Furthermore, it contradicts the fiscal legislation of the Republic of Albania.

Throughout its 5 years of operation, the company declared having only one employee. Even for this individual, the salary did not pass through a bank. There are also discrepancies in insurance payments.

The company claims to have no economic activity, stating zero profit for each of the five years of operation, with the second year being the only profitable one, while the remaining three years reported losses.

The Profit/Loss for the company Laxmi Reale Estate & Investment over the years

A licensed audit explained the company’s balance sheets, presenting the documents submitted by the company itself to the National Business Center, without disclosing its ownership.

“From a fiscal (legal) standpoint, the company is allowed to report losses for up to 3 fiscal years. After that, the Tax Authorities should initiate an investigation. From an economic perspective, it doesn’t make sense because in 3 years, it hasn’t generated any income from sales,” the audit responded to the question of whether it is logical for the company to remain incurring losses.

However, while recording negative balances, Laxmi Reale Estate & Investment declares that during the first four years, it has circulated millions of euros through lending and borrowing. This activity raises questions about the declared activity of the company.

The figures for borrowing and lending of the company Laxmi Reale Estate & Investment, extracted from the balance sheets submitted by the company to the tax offices.

“In the balance sheet, both in assets and liabilities, there are accounts related to rights to be collected and loans given to third parties, the sources of which are not understood. In liabilities, obligations to third parties are also reflected, the amounts of which are unexplained, as well as the source and detailed analysis of these items in the balance sheet,” explained the contacted audit.

The declared activity of the company at the National Business Center does not indicate that the company has a license for financial (non-banking) activities. Apparently, this argument has also been used by the Financial Supervisory Authority. In response to the question of whether they have information on the company’s lending activity or its partners, the FSA responded: “We inform you that the Authority does not have information on these subjects, as their activities are not within the scope of the Authority’s activities.”

Selami Xhepa, an economics expert, considers that this data should have alerted law enforcement institutions in the country. “Any financial activity, lending or borrowing, should be a licensed activity. If they don’t have a license, then it’s an illegal activity, and the authorities should hold these individuals accountable,” says Xhepa.

Another suspicious aspect of the company’s operations is that despite reporting losses, the company seeks Value Added Tax (VAT) refunds. “The excessive VAT credit is the right to be collected, owed by the state to the company, which arises precisely from the non-declaration and conduct of sales activities according to the company’s declared activity,” explained the audit of the company’s balance sheet. “If they have no activity, they cannot claim VAT refunds unless they issue false invoices,” explains Selami Xhepa.

The maneuvers used by the Sandesara Indians in Albania, who are under investigation in their home country precisely for a $725 million fraud scheme, according to expert Xhepa, indicate that institutions have failed in their duties. “In this case, tax authorities do not cooperate with each other, do not distribute information. All these institutions, dealing with money laundering prevention, do not function at all, especially when they also seek VAT refunds,” Xhepa concludes.

The other company, Tulja Reale Estate & Investment, which Chetankumar Sandesara established with his wife, has almost the same field of activity as the first company, Laxmi Reale Estate & Investment, with just one addition: vehicle rental. The initial capital is different this time. The partners have frozen 100,000 lek, about 1,000 euros. The company has not submitted any documents proving its financial activity in any of its years of operation. Even though it has been fined by the Tax Directorate for this reason, it paid the fine but did not reflect. Through this company, the brothers entered into a business relationship with Albanian businessman Julian Morina.

The brothers’ brother-in-law establishes additional companies.

With Albanian passports and owners of an international empire (despite being wanted worldwide), the brothers, in March 2019, requested permission from Rinas Airport to land their private plane. Inside the chartered plane, which had departed from Dubai, were the brothers, Chetankumar and Nitin, and their brother-in-law, Hiteshkumar Patel. While both brothers passed through customs, Hiteshkumar was arrested. The Indian police had issued a warrant for his arrest. Interpol had also flagged him with a red notice – High-risk Contingent. In the arrest report, there is a correction regarding the date and time of arrest. Initially, the date March 20 was written, then corrected to March 21, 2019. A police officer at Rinas Airport insists that the correction of the date is deliberate, without identifying the exact purpose of this action. However, this “irregularity” is also noted in the court decision of the Tirana Court, which rejected the extradition of Hiteshkumar Patel.

Two days after the arrest, on March 23, 2019, the Court deemed the arrest of Hiteshkumar Patel lawful and appointed detention as a precautionary measure, with a duration of 40 days. During this time, the Albanian prosecution was supposed to communicate with the Indian authorities to prepare the extradition dossier.

In the decision of the Tirana Court, which refers to the extradition request from the Indian authorities, Hiteshkumar Patel is considered the “brain” behind the fraud scheme raised by the Sandesara brothers.

Despite these claims by the Indian justice system, after 40 days of detention, the Tirana Court released the then 59-year-old from prison and ordered him to remain under house arrest with 24-hour police surveillance.

Just over three months after the arrest, on July 3, 2019, the First Instance Court in Tirana decided not to extradite the Indian national, Hiteshkumar Patel, to India. After this decision, the circle of the Sandesara family widened. Hiteshkumar Patel’s son, Devak, also arrived in Tirana.

Upon his arrival, Devak founded two business companies. The first, named Aries Investments, with an initial capital of 100,000 lek (one thousand euros), engaged in investment activities across all sectors and was active for about three years (2020-2023). There are no documents on the National Business Center portal to verify if the company conducted any activities. Apart from the articles of incorporation, there is also a decision to close the company, appointing a liquidator.

The second company, named Dimensional Global Trading and Services Limited-Albania, according to its registration documents with Albanian state institutions, is a branch of a Nigerian company. Once again, Devak Hitek Patel is the administrator, and it was registered with the Business Registration Center on October 1, 2020. The company primarily operates in the field of inspecting all pipelines.

This company also failed to submit any documents to the tax authorities in Albania to verify its activities. In fact, the company has been fined twice for failing to submit its financial statements. Although it paid the fine, it did not fulfill this legal obligation.

The General Directorate of Taxes did not respond to requests for information regarding the measures it took regarding this repeated evasion of legal obligations by the companies identified in this investigation. According to the law, when a company repeatedly fails to submit its financial statements, the tax administration must initiate an investigation into the company.

Interestingly, the company managed by Devak Patel, Dimensional Global Trading And Services Limited-Albania, operates in the same office as the company Tulja Reale Estate & Investment, whose shareholders are Chetankumar Sandesara and Dipti Sandesara. The office is located in one of the luxurious complexes in one of the most expensive areas of Tirana.

The third Patel, who came to Tirana, is called Nareshkumar. He was born in Gujarat, India, in the same village as the other Patels in Albania. In May 2022, Nareshkumar Ganpatlal Patel founded the company Nitya Corporation, which specializes in import-export and wholesale distribution of spices, various food products, as well as aluminum and iron scrap. Unlike his cousins, he invested a capital of 10,000 euros to establish the company. The company is active, but Nareshkumar Patel also failed to submit its financial statements. Moreover, he did not pay the fine.

The State Police did not respond to requests for information about the legal status of the Indian nationals, Devak Patel and Nareshkumar Patel.

Each of the companies was asked for comment on the allegations in this article via email, which they themselves had declared to the Business Registration Center. The address of the company, Nitya Corporation, did not exist, while the other three companies did not respond at the time of publication of this article. Even the Financial Supervisory Authority did not respond to requests for information regarding whether they had flagged the transactions of this family.

The Albanian business partner of India.

In Albania, the Sandesara brothers have collaborated with the well-known businessman, Julian (Lul) Morina. The two brothers from India, shareholders of Laxmi Reale Estate & Investment, purchased 50% of Drymades Dream Sh.p.k. from Morina on December 28, 2018, for a value of 12,387,000 lekë. However, in less than three months, on March 15, 2019, the Indian brothers, now with Albanian passports, exchanged 50% of the shares of Drymades Dream for an apartment in Vlorë with an area of ​​109 m2 and a veranda of 80 m2. This time the exchange was made not with the company from which they took the shares, but with the company Dinia 04 Sh.p.k. However, upon checking the Business Registry, it is revealed that the sole shareholder of this company is Julian Morina.

But this is not the only fact regarding the connection between the two Indian brothers and businessman Julian Morina, as reported by OCCRP in the investigation published in 2021 about the activities of the Indian family and their ties with businessman Morina.

The connections between this family and businessman Julian Morina are numerous; three of the companies established by the Sandesara family share the same address as one of Morina’s companies, which is located near his hotel. Tulja Reale Estate & Investment and Rinia 04, Morina’s company, shared the same email address for a period of time. The same notaries handle transactions between the family and Morina and perform other actions in the interest of the Indian family. The lawyers are also the same.

Bloomberg published an article titled “Brothers fighting fraud charges in India are booming in Nigeria” on June 5, 2023, on its portal, bloomberg.com. The article illustrates how the company owned by the Sandesara brothers, who also hold Albanian passports, has achieved a record figure of 1 billion barrels of oil extraction in Nigeria.

“The brothers and sisters have built the largest independent oil company in the largest crude oil-producing country in Africa, even though India is pursuing them as criminals – accusing them of committing ‘one of the largest economic frauds in the country,'” Bloomberg writes.

The map of this family’s activities and the complex scheme of their operations make it necessary for Albanian authorities to exercise active vigilance, which has been lacking so far.

Ky shkrim është pjesë e projektit që mbështetet financiarisht nga Zyra e Mardhënieve me Publikun e Ambasadës së SH.B.A. në Tiranë. Opinionet, gjetjet, konkluzionet dhe rekomandimet e shprehura janë te autor-it/ve dhe nuk përfaqesojnë domosdoshmërisht ato të Departamentit të Shtetit. / This article is part of a project that is financially supported by the Public Relations Office of the US Embassy in Tirana. The opinions, findings, conclusions, and recommendations expressed are those of the author(s) and do not necessarily represent those of the Department of State.