The arrest and subsequent interrogation of Sudhanshu Sudhakar, an ex-army man a week ago in Patna has revealed startling information about his links with Pakistan's Inter-Services Intelligence which is operating a huge fake currency racket in India through the borders of Nepal.

According to sources in the Intelligence Bureau, Shankar's interrogation revealed that the ISI picked him to act as a link between the India and Nepal operations through which fake currency is being pumped in, in large numbers.

What is startling is also his links with Nepal's former crown prince, Paras, who was allegedly on the IB's radar for operating in close quarters with both the ISI and the Dawood Ibrahim [Images] gang.

Investigating agencies told rediff.com that Sudhakar was helping Pakistan-based agencies run the fake currency racket from Nepal.

This is, however, not the first time that Indian agencies have stumbled upon links to Paras in this racket. Earlier this year, the Madhya Pradesh [Images] police had picked up two others, Ateeq Ansari and Rajesh Gupta, who during interrogation revealed that Paras was also involved in the racket.

The arrest of these three persons also gives the investigation into the fake currency racket a shot in the arm. In fact, all these persons have made it clear that the fake notes are being printed in Nepal with the help of sophisticated machinery and being smuggled into India.

IB sources say it was easy for the ISI to lure Sudhakar into their fold. He was disgruntled already after being dropped from the Indian army [Images]. Money is what mattered to him and he was paid over Rs 5 lakh to join the racket and he readily did.

What was shocking is that he had important documents relating to both the Indo-Pak and Indo-Nepal border. Investigating agencies say the ISI wanted these documents to understand the border strategy and used Sudhakar to get hold of them.

The ISI also used these documents to continue with smuggling activities and pumping fake notes through the borders while dodging security agencies.

IB sources say Sudhakar operated as a first level operator while Ansari and Gupta were third level operators. While the first level operator in the ISI network interacts directly with the bigwigs, the second and third level operators do most of the fieldwork.

Sudhakar was in touch with the bigwigs and he also played a major role in leaking secretive information so that smuggling and infiltration activity could go on unabated and smoothly.