ED Exposes Sand Mining Scam: Mafia Used Poor Vendors as Fronts in Ganjam
The Enforcement Directorate has uncovered a major illegal sand mining operation in Odisha's Ganjam district. Investigators found that a mining mafia systematically obtained licenses using poor local residents as fronts.
How the Scam Operated
According to ED officers, the syndicate targeted betel leaf shopkeepers, sweet vendors, and vegetable sellers. These individuals lacked the financial capacity to run mining operations requiring substantial investment. More importantly, they remained unaware of the legal consequences of violating mining regulations.
The actual operators seized control of the licensed mines, offering the nominal leaseholders small commissions while conducting extensive illegal mining on a massive scale. An ED source explained this arrangement clearly.
"The legitimate lessees and illegal operators are now being questioned," the source said. "We need to understand their complete modus operandi."
Violations and Financial Crimes
The ED statement revealed multiple violations. Mining permits are non-transferable under Indian law, yet the mafia took over mines from leaseholders for illegal operations. Syndicate members extracted far more sand and black stone than permitted quantities.
They sold these minerals through grey market channels using cash transactions. To move illegally mined materials across Odisha and Andhra Pradesh borders, the operators used forged 'Y' forms as transit passes.
Proceeds from these illegal sales were laundered through cash-intensive businesses. The country liquor trade served as one primary channel for money laundering activities.
Recent Raids and Seizures
On Friday, ED teams conducted simultaneous searches at 25 locations across Ganjam district. They targeted properties belonging to syndicate members including brokers, contractors, liquor traders, and musclemen with serious criminal records.
The raids yielded significant recoveries:
- Unaccounted cash totaling Rs 2.63 crore
- Ten luxury vehicles
- Incriminating documents and property records
- Mining-related agreements
The ED statement emphasized the mafia's use of muscle power. "They forcibly conducted illegal mining while exploiting and terrorizing local communities," officials noted.
Background: CAG Audit Findings
This ED action follows a Comptroller and Auditor General performance audit covering the year ending March 2022. The audit flagged serious irregularities in assessment and collection of revenue from minor minerals.
Key issues identified included:
- Unlawful quarrying without lease deeds or environmental clearance
- Excess mining beyond approved plans
- Non-verification of transit permits
- Weak enforcement mechanisms
These systemic failures resulted in revenue losses running into hundreds of crores for the state government. The current ED investigation appears to validate many of the CAG's concerns about mining sector governance in the region.
The investigation continues as authorities work to dismantle the entire network involved in this elaborate illegal mining operation.
