SINDHUPALCHOK: On March 17, 2025, police in Tokha Municipality-2, Jhor, Kathmandu, seized a truck. The truck was carrying more than Rs 253.4 million worth of U.S. dollars and euros.

The driver, Kusang Lama, was also arrested. He had transported the vehicle from a warehouse of Sindhu Materials Pvt. Ltd., located in Greenland, Tokha.

One of the warehouse operators is Narayan Paudel. Immediately after the seizure of dollars and euros near the warehouse, the Paudel brothers shut off their mobile phones and became unreachable.

The Department of Revenue Investigation filed a foreign exchange violation case against the two individuals at Kathmandu District Court on April 15, 2025. Justice Thakur Prasad Kharel’s bench ordered the driver to be remanded the next day. Lama was sent to jail, but Paudel managed to escape.

According to Badri Kumar Karki, Deputy Director of the Department, the driver was just a hired hand. Investigations show that Paudel was the actual owner. “Call records from after the truck left the warehouse show the last conversation between the two. During statements from the driver, it was confirmed that Narayan Paudel owns the dollars and euros,” Karki said.

This is not the first time the fugitive Paudel has been involved in smuggling, nor is he alone. For the past 25 years, all four Paudel brothers—eldest Dhruba, middle Bachchu, third son Narayan, and youngest Rajkumar—have been repeatedly associated with illegal activities. Their story begins in Hindi Bazaar, Fulpingkatti, Bhote Koshi Rural Municipality, Sindhupalchok.

Smuggling in Kathmandu, fear in Sindhupalchok

After Narayan Paudel went on the run in the foreign currency smuggling case, a Nepal News team conducted on-site reporting and witnessed the brothers’ “empire.” Local residents contacted by Nepal News were unwilling to formally speak against the brothers—not due to ignorance, but fear. “No one wants to speak clearly about them. Those who do are very few,” many from Fulpingkatti said.

Locals believe the brothers enjoy political protection. They have connections across multiple political parties. Eldest Dhruba is with CPN-UML, middle Bachchu has been affiliated with Nepali Congress but shifts allegiances as convenient, while third son Narayan and youngest Rajkumar moved from CPN-UML to Nepali Congress and eventually to CPN (Maoist Centre). They are recognized as Maoist leaders and cadres in Sindhupalchok.

“Every illegal business needs political backing, which is why the Paudel brothers are linked to every party,” a local tea vendor in Fulpingkatti whispered. “Anyone who dares to challenge them ends up having to arrange an ambulance in Bhote Koshi the very next day.”

A local leader said that even the administration avoids speaking against their operations. Police intervene occasionally, but every time one of their trucks is stopped, high-level officials and politicians call. “If you want to understand, know this—it’s not merely a smuggling operation, it’s a political franchise,” said the Nepali Congress leader. “The Pudels wouldn’t dare move without cues from elected representatives, even from my own party.”

The network of the four brothers reportedly extends from Tatopani and Kathmandu to the Terai, India, and Singapore. “During COVID-19, Narayan even operated from Singapore, smuggling small pieces of sandalwood,” the leader added. “Even now, small shipments go through.”

Pasang Norbu Sherpa, Chairperson of Bhote Koshi Rural Municipality, says he knows the Paudel brothers personally but lacks detailed knowledge of their inner operations. “They belong to different political parties. They claim to run businesses, but I don’t know the detailed nature of these businesses,” he said. “They don’t stay in the village much, so there isn’t much awareness.”

The local administration is aware of certain illegal activities by individuals in Bhote Koshi, but Chief District Officer Kiran Thapa says they are not aware of all other activities. “Revenue leakage is handled by the Department of Revenue Investigation. It doesn’t come to us. The police know; they get informed when someone is caught,” he said. “Regarding operations, we instruct the Nepal Police and Armed Police Force to prevent such illegal activities.”

Business from customs: The Paudel brothers’ vast empire

The Paudel brothers began trading woolen cloth at the Tatopani border around 1994-95. Eldest brother Dhruba claims he was the first to enter the cloth trade. In 1999, he expanded into wool trading. That December, while bringing wool via the upper route through Jiri, customs officials caught Narayan and Bachchu. The seized goods were worth around Rs 20 million. They managed to escape by presenting falsified customs documents.

At Tatopani, the brothers would load only half the wool into trucks. These trucks, cleared by customs, were then parked at Hindi Bazaar. At the time, customs did not seal trucks. Illegally sourced goods coming through Syalangkatti would also end up in their warehouse at Hindi Bazaar, and then loaded onto trucks heading to Kathmandu fully “loaded.” Those aware of their misdeeds at the time said, “They brought in millions of rupees’ worth of wool, largely through illegal routes to Hindi Bazaar.”

Bachchu admits they were in business but denies that all accusations are true. “I have done nothing wrong. Law punishes those who do. If I had done wrong, the law would have acted. I don’t feel the need to clear my name. People can make allegations, but I cannot go explaining everything,” he says. “I have been conducting business openly, interacting with everyone—from answering calls to negotiations.”

Dhruba becomes VDC Chair

In 1997, local elections were held. In Fulpingkatti, eldest brother Dhruba ran from CPN-UML, while Devi Bahadur Budhathoki ran from Nepali Congress for the VDC chairperson post. Budhathoki was Dhruba’s relative.

The three younger brothers ensured every arrangement—money and influence—to secure Dhruba’s victory. When their party leaders held power as Home Ministers, they created an atmosphere of intimidation to tilt results in their favor, particularly when then-UML leader Bamdev Gautam was Home Minister.

On the evening of May 25, 1997, Budhathoki went to Hindi Bazaar to assess opposition readiness. Narayan allegedly attacked him with a khukuri, cutting his left hand. Unable to withstand the blow, Budhathoki collapsed. Narayan and Rajkumar reportedly forced him into a vehicle, taking him to Sakhuwa Bazaar, where Rajkumar struck him with a knife again. As blood flowed, he was transported to Gaathi, where he survived further attacks.

“When they tried to kill me, even the UML cadres in Gathi opposed it. The election is tomorrow—killing the opposition candidate today in front of UML members? Can a UML candidate win an election through such murder? Such a crime is unbearable!” he told a close associate.

“My maternal uncle was also there. He tried to save me.”

Among that group was Tenzing Sherpa, who had previously served 14 years in prison for a culpable homicide case. There were loaded guns in the vehicle. “They had reportedly been paid a Rs 500,000 contract to kill me,” he recounted.

Budhathoki was stabilized with basic bandages applied by his uncle and later taken to Om Hospital via Bahrabise Hospital for treatment. The election scheduled for May 26 was postponed to June 5. Despite incomplete treatment, Budhathoki had to face the ballots, where Dhruba won by 86 votes.

Budhathoki maintains, “That was not a defeat. The psychological fear among voters from witnessing such violence influenced ballots. The attacking group prevented further assault on me, ensuring I survived.”

Dhruba, however, denies any attack on Budhathoki. “I went to Ward No. 8 to observe the electoral atmosphere. Devi Bahadur is our relative. There was a minor scuffle involving my brothers Narayan and Rajkumar at the local tavern. Nothing more,” he says. “When I returned home, my wife informed me of the incident. My brothers did not attack anyone intentionally.”

Budhathoki prefers not to recount the incident further to avoid endangering his life. He remains cautious of future interference. “Whenever a house is built or vehicles changed, the Paudel brothers must be informed. They take action only after a signal.

“Since 1999, our elected representative hasn’t maintained any formal organization. He doesn’t need financial backing to win elections because he has his own resources. There’s no need to curry favor with the Paudel brothers,” says a close associate.

Nepali Congress MP from Sindhupalchok (currently suspended) Mohan Bahadur Basnet denies any political protection for the Paudel family. “It is well known which party family members belong to. Nepali Congress has not protected anyone. The VDC chairperson’s ticket shows from which party they contested. This indicates that they are not only close to the Maoist Centre but actively involved,” he said.

Aligned with power wherever it resides

The Paudel brothers began to assert control, instilling fear in local authorities. Sensing interference in their operations, they quickly aligned with the Maoists. At that time, Agni Prasad Sapkota handled the Maoist command in Sindhupalchok. While the Maoists needed weapons, the Paudel brothers needed protection for their trade. Allegedly, weapons were smuggled hidden in wool consignments, with operations continuing until 2005. Once firearms and ammunition became easier to procure, the Maoists reportedly assisted the Paudel brothers’ business.

Maoist MP Madhav Sapkota, elected from Sindhupalchok, denies the claim that the Paudel brothers supplied weapons during the conflict. “It’s well known that we brought weapons from China. Three of our cadres were sentenced to death there. Comrade Prachanda later negotiated with the Chinese President to bring them alive to Nepal. Narayan has never been a party member. Claims that they provided weapons are false,” he said. He also noted that Rajkumar received assistance from Narayan when he ran for the local level election under the Maoists.

Sapkota claims he was the first to raise the issue of the Paudel brothers’ smuggling in Parliament. “Narayan alone could not have handled that much money. The real owners are foreigners. Large amounts of currency—illegal transactions worth Rs 250 million—require serious state investigation. Senior-level owners are involved,” he said.

The era of sandalwood smuggling

The Paudel brothers had the administration under control. Aligning with the Maoists made operations even easier. Their involvement in sandalwood smuggling became public from 2005. Reports emerged of consignments being transported from India to Chinese buyers. Experts say trucks were rigged with false compartments to hide five- to ten-foot logs, which were offloaded in Hindi Bazaar and then moved through Syalangkatti to Khasa. “They even transported logs by sitting on them,” one leader said.

During the 2006 People’s Movement, roads were blocked. “Maoist forces reportedly escorted 20-25 trucks of blocked consignments overnight from Sindhupalchok to Kathmandu,” claimed the leader.

In 2008 AD, locals protested sandalwood shipments to China. They slept on the road in front of Hindi Bazaar toward Tatopani, blocking transport. Police did not intervene. Narayan allegedly fired shots, injuring a youth. One witness recalled, “When trucks passed, shots were fired. After the injured youth recovered, he was reportedly employed by the Paudel brothers as a loader.”

Around 2010, the brothers reportedly delivered four truckloads of sandalwood logs to Chinese buyers. When discrepancies arose in accounts, the trucks were reportedly “lost,” causing temporary panic. The Paudels then negotiated with local authorities to smooth operations; when deals went through, sandalwood moved easily, but disputes led to clashes.

In August 2012, DSP Pratap Gurung led a team that surrounded a forest near Fulpingkatti, Narayansthan, where sandalwood was stored. Six logs in a truck (BA 2 Kha 8867) were seized. As the police advanced, loaders clashed with officers at Syalangkatti with spears and khukuris. One loader, Bibek Shrestha, was killed on the spot, while others fled. Approximately 1,500 kg (71 logs) of sandalwood was recovered.

Dhruba’s name was linked to the incident. He was arrested but charged with possession of weapons and ammunition rather than illegal sandalwood trade, under the District Administration Office. He posted Rs 30,000 bail and was released after 15 days.

“On the day of the incident, I was in the village. An inspector from Larcha was present. I learned the next day that one person had died, and the police had removed the sandalwood from the truck,” Dhruba said. He added that he left for Baglung three days later on assignment, and was formally arrested just before the Dashain holiday. After being summoned by the DSP to Chautara, he was formally charged in the weapons and ammunition case at the CDO office. He was initially released on Rs 30,000 bail.

Dhruba maintains, “I do not engage in such activities. Most locals in Sindhupalchok have already dealt with Chinese traders. I have not even applied for a passport. I cannot tolerate the behavior of Chinese in Tatopani.” He also claims that after becoming VDC chairperson in 1997, he had left the cloth and wool business. “Later, I moved into construction. Yet allegations continued. Any claim can be made without proof,” he said.

Former Additional Inspector General of Police, Basanta Lama, recalls during his posting in Sindhupalchok in 2011, “I seized about 100 quintals of sandalwood. Logs were found in every household. It was impossible to trace who smuggled them,” he said.

Illegal money transfer, dollar smuggling, and gold trade

In 2014, Indian politics underwent a major shift as the BJP came to power and Narendra Modi became Prime Minister. He tightened regulations on sandalwood exports. The Paudel brothers continued to bring in small amounts of sandalwood. “Small quantities were still going to China,” a local resident said. “With the sandalwood business slowing down, the Paudel brothers shifted focus to hundi (illegal money transfer) operations.”

They opened Letters of Credit (LCs) at banks claiming to import wool from China, but did not actually import it. They fabricated import documents to withdraw dollars from banks, which were then sent to China (Hong Kong) via hundi. That currency was converted into gold and re-entered Nepal through Chinese border points. Most of this gold did not circulate in Nepal; it went to India.

In 2011, Narayan was arrested for allegedly routing Rs 470 million in dollars to Hong Kong via hundi using fake wool import documents.

He spent 15 months in jail before being released. “There were reportedly many dollars, but Narayan was jailed based on a report showing only Rs 470 million,” a local resident said. “Even after jail, Narayan’s operations did not stop.”

In 2017, Rajkumar was implicated in smuggling 22 kilograms of gold while serving as chairperson of Bhote Koshi Rural Municipality. Gold was seized from his residence in Tokha, according to former Additional Inspector General of Police, Pushkar Karki. Rajkumar was released on Rs 100,000 bail.

The Central Investigation Bureau concluded that he had orchestrated an organized gang to illegally transport gold. Fourteen kilograms were recovered from Pemba Dorje, one kilogram from Bishnu Gautam, and seven kilograms were sold prior to seizure.

The investigation revealed a complex network spanning Nepal, China, and Kathmandu, involving 12 individuals.Communication often used coded language instead of Nepali. Rajkumar’s ID on WeChat was “RRR,” and he directly communicated with Chinese citizens Gamfe Bhote and his wife Chheten. Forensic analysis of voice messages confirmed Rajkumar’s involvement.

Dorje and Gautam were convicted and sentenced to two years, while Rajkumar and ten others were acquitted due to lack of evidence. In the 2022 local elections, Rajkumar, representing the Maoist Center, lost the chairperson race in Bhote Koshi Rural Municipality to Sherpa of the Nepali Congress.

Narayan and Bachchu were linked to a separate 33-kilogram gold smuggling case at Tribhuvan International Airport in 2017, but were not prosecuted. When Nepal News repeatedly sought clarification, Rajkumar remained tight-lipped and Bachchu refused comment. “In this lawless country, anything goes. Journalists have become judges. Whatever is written, happens,” he reportedly said.

Hindi Bazar in Phulpingkatti, Bhotekoshi Rural Municipality-4. Photo: Khila Nath Dhakal / Nepal News.

Dollar and euro smuggling operations

Police recovered a truck (NA 7 Kha 1652) in Kathmandu with a false compartment above the driver’s seat containing dollars and euros. The driver, Lama, claimed he was transporting clothes from China to Rasuwa. Narayan, his accountant Hari Bahadur Bhandari, and other associates were present. Narayan introduced Bhandari as “my guy.”

Before leaving the warehouse for Rasuwa, the truck had visited four locations: Chandragiri garage, Thimi service center, Naya Pati parking, and near Shankar Hospital in Jorpati. Authorities suspected the truck carried dollars or euros. After the seizure, Lama stated he did not know the source of the money, only that it belonged to Narayan.

Investigation revealed a detailed network of communications involving Narayan, Bhandari, and Narayan’s family. Before the seizure, Narayan and his wife Yunita Khatri had 169 phone contacts, Bhandari had 267, his son Dipesh had 213, Sagun KC 73, and Saroj Koirala 20.

Communication with Koirala, who served as Rajkumar’s accountant, confirmed coordination. After the truck was seized, Narayan’s phone went offline, with his last call traced to Balkumari Temple in Tokha. Police later searched his residence near Mahadevtar in Tokha, but Narayan and family were absent; Bhandari’s whereabouts were unknown. Authorities recovered 47 Indian currency notes, each valued at 500, from inside the house.

A female domestic worker testified that she had worked for Narayan’s household for four months, preparing meals and cleaning. Bhandari also stayed there. Narayan, his wife Yunita, and son Dipesh had been absent from the house since March. The worker also noted visits by Chinese nationals, reflecting Narayan’s connections to China. His late wife was ethnically Tibetan, but the family’s ties to China went beyond marital connections.

Police suspect that although Narayan appeared as the face of operations, the full strategy was coordinated among the brothers. “We cannot investigate foreign currency directly; once seized, it must be handed to Revenue,” said Senior Superintendent of Police Ramesh Kumar Basnet.

Driver Lama had also been arrested in 2016 for transporting seven kilograms of gold, receiving a five-year prison sentence. Although it was alleged that the gold belonged to Narayan, Lama did not reveal the connection at the time.

In the case involving Rs 250 million, multiple individuals’ names appeared, but only two were formally charged. Family members in close contact with Narayan during the operation were not made defendants. Three warehouse managers, including accountants, were also excluded, pending future action by the revenue authorities.

Deputy Director Karki noted that statements indicated that Jiban Kumar Bhandari and Bhandari were merely employees, with no formal role in the case. Family members’ involvement was considered domestic and therefore not prosecuted. The investigation is ongoing, including revenue leakages. “Before prosecuting, we coordinated with the Attorney General and Government Attorney Office. Further investigation may lead to prosecution later,” Karki stated.

Narayan and Bachchu have been repeatedly arrested. In 2025, Narayan was arrested at home for gambling. Bachchu is frequently implicated in hundi operations. Both have served as presidents of the Himalayan Cross-Border Trade Association. Under Bachchu’s leadership, the Container Cooperative allegedly engaged in hundi operations. Another cooperative, Jayratna in New Road, is also linked to him.

Dhruba Paudel commented, “I live in the village; my brothers Rajkumar and Narayan stay in Kathmandu. I only learned about the dollar seizure from the media. The allegations target the four of us unilaterally. Allegations can be made many times; the law will only punish after proof. But an accusation alone does not make one a criminal.”