Based on inputs generated by the Intelligence Bureau, Income Tax sleuths have busted a hawala syndicate worth at least Rs 1000 crore and suspecting involvement of D company in the racket as the money was to be transferred to UAE.

The Central Board of Direct Taxes (CBDT) has seized 20 sacks of Indian currency in raids carried out in Kolkata on Thursday morning. "It is suspected that the hawala-lottery scam is worth at least Rs 1000 crore," said an intelligence official.

Sources said lottery kingpins of West Bengal and Tamil Nadu are involved in the racket that has links with the underworld. "We suspect links with the D company. Further information is being gathered to unravel the facts," the official added.

The premises of two front companies identified General Systems and Future Plus Enterprises were raided after intelligence was passed on to CBDT. Sources say according to initial estimates close to Rs 50 crore has been seized. Intelligence agencies are gathering more information on these companies. The money was generated through lottery profits and then was to be laundered to UAE, sources said.

The recoveries were made were made at 127 B, Sarat Bose Road, 75/3 S N Roy Road and Thakurbhai Road, Kolkata. Money was also seized from Teesta Distributor, Ananda Mangal Sqare, SF Road Siliguri.

The money was stashed in travel and gunny bags and also in a 6 feet almirah in one of the premises.

Sources said more searches are expected in other parts of the country to seize the remaining amount. "It is possible that some amount has already gone out of the country but with the syndicate being busted we hope to recover more cash and also identify the masterminds of the racket within the country," an intelligence official said.