Drug Money To Terror: ED Flags Global KLF Network, Red Fort Case In Focus

Mumbai, May 13: The Enforcement Directorate (ED) is investigating cases involving money laundering linked to terror financing and proceeds of crime allegedly generated through drug trafficking. According to the agency’s annual report for 2025–26, the anti-money laundering agency detailed Al-Falah Trust, which is allegedly linked to the 2025 Red Fort blast, and Khalistan Liberation Force (KLF) as two case studies relating to terror financing probes. The ED has stated that Al-Falah Trust generated funds through allegedly fraudulent means, while KLF used proceeds from narcotics trafficking to finance terror activities.

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ED probes transnational narco-terror financing network

The first case relates to the banned KLF, which the ED described as a case of “transnational narco-terror financing”. The probe pertains to the outfit allegedly running an illicit drug trafficking network and a transnational narco-terror operation.

According to the ED, the investigation uncovered an international network spanning India, Pakistan, the UAE, and the United States, in which proceeds from narcotics trafficking were allegedly layered through multiple channels across countries and continents before being routed through hawala networks to fund terror-related activities. The ED’s money laundering case stems from a Punjab Police FIR registered in 2019 following the seizure of heroin and alleged drug proceeds.

In the long-period ED investigation, it was revealed that the drugs trade network operated as a vertically integrated system, with heroin sourced from Afghanistan through Pakistan being trafficked into India through vulnerable corridors, including Jammu and Kashmir. According to the agency, the proceeds generated through narcotics trafficking were collected domestically and transferred through hawala channels to Dubai for layering and onward transmission to terror operatives.

The investigation also allegedly revealed the misuse of licensed foreign exchange entities as covert conduits for moving funds, along with direct overseas control over local operatives. Officials said the international dimension of the network was reinforced after JSKM Global, which investigators found functioned as a shell entity linked to transnational money laundering operations, and associated entities were designated under the US Office of Foreign Assets Control (OFAC) sanctions regime.

The ED said its probe led to the recovery of 1.06 kg of gold and 370 grams of diamond jewellery. The agency further stated that Interpol notices have been issued against the accused. Recently, a special PMLA court declared the main accused a proclaimed offender. According to the ED, the accused remains absconding abroad.

Al-Falah Trust under scanner in Red Fort blast probe

The second case highlighted in the report pertains to the Al-Falah Trust and the Red Fort blast investigation, which had led to the arrest of its founder and chairman, Dr Jawad Ahmed Siddiqui. According to the ED, its probe under the Prevention of Money Laundering Act (PMLA) revealed alleged financial irregularities and the generation of funds through fraudulent means by institutions operated under the trust.

The agency alleged that Al-Falah University, functioning under the umbrella of the trust and allegedly under the direct control of accused Dr Siddiqui, falsely projected expired NAAC (National Assessment and Accreditation Council) accreditations and fraudulently claimed recognition under Section 12(B) of the University Grants Commission Act.

The ED further alleged that the Al-Falah School of Medical Sciences and Research Centre engaged in large-scale regulatory malpractice by allegedly using “on-paper faculty”, fabricated records, fake patients, and manipulated inspections to secure approvals from the National Medical Commission.

Officials said the alleged acts formed part of a systematic scheme to deceive students, parents, regulators, and the public, thereby inducing admissions and generating substantial fee income through false representations.

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The ED said it has quantified approximately Rs 493.24 crore as alleged proceeds of crime generated through fraudulent inducement and misrepresentation. So far, the agency has attached assets worth Rs 179.4 crore, including university buildings and land parcels, residential properties of the accused, bank balances, fixed deposits, and shareholdings.

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