UP STF Busts Hawala Racket Run by Chinese National Using Phone Cover Factory as Front
Liao Longhui arrested with two Indian associates after operating illegal money laundering network from Noida since 2020 using forged Aadhaar identity.
The Uttar Pradesh Special Task Force (STF) arrested a Chinese national and two Indian associates on July 22-23, 2026, for running an international hawala and money laundering operation from a mobile phone cover manufacturing unit in Noida.
Liao Longhui, who entered India in 2018, was taken into custody along with Sanjeev Kumar and Kaushalendra Singh from Auraiya district. Investigators say Liao remained in the country illegally after his visa expired in 2020, using a forged Aadhaar card issued in the name 'Samuel Lotha' with an address in Kohima, Nagaland.
Manufacturing Front
The network operated through YTL Manufacturing Pvt. Ltd., located in Sector 83, Noida. According to the STF, the company imported raw materials from China at inflated prices and sold finished phone covers in Delhi's Karol Bagh and Nehru Place markets through under-invoicing. Remaining funds were transferred abroad through hawala channels.
Police said the scheme exemplifies trade-based money laundering, where legitimate manufacturing operations mask illicit cross-border fund movements.
Shell Company Network
Investigators identified multiple shell companies linked to the operation, including JNS Infra Heights, Refan Enterprises India, Tidydesk Essential, Z One Enterprises, and Hanuraj Trading Solution. Sanjeev Kumar, a chartered accountant, allegedly played a central role in incorporating these entities and opening bank accounts to facilitate the transactions.
During raids, the STF seized five laptops, nine mobile phones, one tablet, two Chinese passports, 10 company seals, 11 cheque books, cheques worth ₹4.72 crore, and ₹15,400 in cash. A case has been registered at Phase-2 Police Station, Noida.
Recurring Pattern
The bust fits a broader pattern in Noida and Greater Noida, where Chinese-linked hawala networks have repeatedly used shell companies and forged Indian identities to facilitate illegal financial transactions. The recovery of a fake Aadhaar card bearing Liao's photograph highlights vulnerabilities in identity verification systems that allow foreign nationals to evade immigration laws.
Trade-based money laundering schemes of this type pose significant challenges for enforcement agencies, as they exploit legitimate import-export mechanisms to move funds across borders without detection through conventional banking channels.