Charlie Peng, a Chinese national, is being questioned by the income-tax department. China’s Luo Sang, who was living in India as Charlie Peng, is being questioned by officials. Two years ago, he was arrested by Delhi Police on forgery charges

What is known is that Charlie Peng is the Chinese national being questioned by the income-tax department who detained him earlier this month for his alleged involvement in a Rs1,000 crore cross-border money laundering racket using shell companies.

Around two years before income-tax detectives got to him, Peng, 41, was arrested by Delhi police on charges of forgery. In 2018, he was a Chinese man living illegally in India using forged papers.

To his neighbours in the Dwarka neighbourhood where he lived, Peng posed as a northeast Indian who ran a successful pharmaceuticals business, had an office in Gurugram and moved around in swanky cars, including a Toyota Fortuner, and seemed to have plenty of money.

Nobody knew much more about the short, middle-aged, bespectacled man. Until he was caught this month, no one in the neighbourhood knew that in 2009 Peng had fled China, trekking from Tibet to Nepal. No one knew that for six years he had lived as a monk at a monastery in Nepal and then travelled to India, where he became a garments trader.

Many in the Delhi police recall him as a smooth talker who knew a lot about India, which enabled him to pass off as an Indian citizen. When he was first arrested on a rainy evening in September 2018, he tried to pass himself off as an Indian businessman.

On the evening of September 12,2018, at 6.30, a police informant tipped off inspector Sanjay Gupta about a Chinese national who had forged papers and was living in India under a false identity. The informant told Gupta that the man, who identified himself as Charlie Peng, may be engaging in “anti-national” activities using fake identity documents.

Less than an hour later, Gupta and his team were in Majnu Ka Tila, looking for a Toyota Fortuner with Haryana licence plates, that the informant had alerted the police about. The informant had told inspector Gupta that Peng was meeting an accomplice in Majnu Ka Tila, a Tibetan refugee settlement on the banks of the Yamuna near north Delhi.

“At 7.10 pm, we spotted a Fortuner car coming and the informer pointed to us that he was Charlie Peng. He could have escaped, but because of the heavy traffic...could not. We stopped his car. He was seated next to the driver. He said his name was Charlie Peng,” read Delhi police’s charge sheet, filed in a city court after his arrest in 2018. Delhi police officers who questioned Peng in 2018 said he was living at an apartment in Dwarka and had an office in Gurugram’s Phase 5.

Police then recovered two Aadhaar cards in the name of Charlie Peng, which showed he was a resident of Dwarka and another showing him to belong to Churachandpur in Manipur.

His real name, according to police records, is Luo Sang.

“In Dwarka, none of the neighbours knew about his past. He had told them that he was from the north-eastern state. He had also married a woman from Mizoram. Our team had gone to Manipur and also spoken to the sarpanch of the village. No one knew him at the Manipur address mentioned in his Aadhaar card,” said an officer who questioned him.

The Beginnings

Police records show that Peng was born in Tibet in 1978. He told police his parents had a troubled marriage. When he was eight, his mother met a man named Li Peng, who helped them flee Tibet and shift to Nanjing in Jiangsu, China, where Li Peng ran an auto spare parts business.

“He was not good in studies and had developed bad habits. When he was 18, he went to Tibet to meet his biological father. He stayed with his father for a year. He worked as a businessman dealing in medicines. He started trading of a local medicinal herb, dong chong xia cao. He earned handsome money from this business because he knew the Chinese language and could bargain hard with the Chinese people,” his interrogation report in 2018 reads.

Peng told police that he wanted to expand his business and illegally entered Nepal on foot with six other Tibetans in the summer of 2009. Police say Peng’s motive was to come to India and that Nepal was only a transit point. In Nepal, Peng stayed for six years until 2014, living as a monk at the Gelug Monastery near Kathmandu and continued to trade in dong chong xia cao.

He told his interrogators that the business was so good that many people from the monastery and outside became dependent on him. “Some acquaintances in the monastery suggested to him to go to India to earn a fortune. In 2014, he came to India at Majnu Ka Tila, New Delhi from Kathmandu by bus,” a report on his confession before the police’s investigating officer reads.

Detailing his early days in Delhi, police said Peng had stayed in the Punjabi Basti area opposite Majnu Ka Tila and used documents from the monastery to get an identity card as a Tibetan refugee. According to records, Peng then started importing noodles from China and sent them to monks in south India.

When he made money, he shifted to importing Chinese goods through an online firm. “As he knew Mandarin, he was able to converse with Chinese exporters and earned their faith. Gradually he developed links with them. From Punjabi Basti, New Delhi he went to Bangalore as his imports were destined to Bangalore. Thereafter he again shifted to New Delhi and took a flat in Dwarka,” a police officer told a court in 2018.

Move To Gurugram

Police said that by 2016, when Peng’s business grew, he shifted from Dwarka to Gurugram and also opened a company by the name of Sunhara Bird Pvt. Ltd. According to information of different search engines, the company is shown to be a financial planning firm.

“We always suspected that he was into money laundering and other crimes but we had little evidence then. We only charged him for fraud and forgery then,” a second police officer, who did not wish to be named, said.

Police then found that Peng operated a money exchange business from his Gurugram office. Two bank accounts --at IndusInd Bank and ICICI Bank--were opened using fake Indian identity cards. There was at least Rs20 lakh in the ICICI Bank account and about Rs70,000 in IndusInd bank, according to the bank account statement details police mentioned in his interrogation report.

Currently under investigation for his handling of the finances of several firms and laundering money using shell companies, Peng is suspected to have created a web of sham entities to transfer hawala funds to and from China, income-tax officials said.

Currently out on bail in the forgery case, Peng was posing as a businessman who dealt in the import and export of medical and electronic goods to mislead authorities.

After his arrest, the Central Bureau of Direct Taxes said that “ the subsidiary of a Chinese company linked to Peng and its related concerns had taken over Rs100 crore bogus advances from shell entities for opening businesses of retail showrooms...”

Income tax officials said that during raids on August 11 and 12, they recovered a large number of documents apart from over Rs50 lakh in cash, from premises in Delhi, Gurugram and Ghaziabad linked to his associates, such as chartered accountants, bank officials and representatives of a few Chinese firms who helped him.

“He had made it big. He had even married a woman from Mizoram. Initially, she also did not know about his past. He had got a tout to prepare a fake Indian passport from a tout in Manipur. He had money then and that money was possibly not earned from just selling clothes,” a third police officer who questioned Peng in 2018 said, also requesting anonymity.

“Currently, he has approached the court to release his passport. He may not have thought that he would be arrested and that the government would find evidence. If the investigators go deeper, they will find more about Peng and the Chinese residents for whom he has been working for all these years,” the officer added.