A businessman arrested by the Thane Crime Branch on Thursday in connection with an extortion case involving Iqbal Kaskar, brother of fugitive Dawood Ibrahim, had been sending Rs 10 lakh to Rs 15 lakh to gangster Chhota Shakeel per month, police said.
The businessman, Pankaj Gangar, used to transfer the money to Shakeel, a close aide of Dawood, through illegal hawala transactions, they said.
Shakeel's role has also emerged in the extortion case and he has been named a wanted accused, the official said.
"Gangar was also involved in cricket betting and has links with 'matka' (gambling) syndicate," Abhishek Trimukhe, Thane Deputy Commissioner of Police (Crime), said earlier in the day.
The 54-year-old businessman, a resident of suburban Borivali, was produced in a city court which sent him to police custody till October 5, he said.
"Our investigation about his role in the (extortion case) is underway," the official said.
According to another official, Gangar used to finance and provide weapons and accommodation to shooters of the 'D' (Dawood) gang who were part of the extortion racket.
Gangar, once a close aide of 'matka' king Pappu Savla, was also named in the murder case of Shiv Sena corporator Kamlakar Jamsandekar. He was accused of aiding and abetting in the crime and was arrested in July 2008.
The businessman was booked under the stringent anti-organised crime law MCOCA, but was later acquitted in the murder case, the official said.
Investigations into the extortion case have revealed that Shakeel was behind the racket and it was being operated by Kaskar in Mumbai and neighbouring districts, he said.
After getting information about targets, Shakeel used to make threat calls to the builders in the name of Dawood or his gang. Some of these calls were also made from abroad, the official said.
The shooters, who were part of the racket, were hired from Bihar and sent to offices of real estate developers and their construction sites, he said.
A team of Crime Branch sleuths was sent to Bihar to arrest two shooters -- Shambhu and Guddu -- but no headway has been made in the matter till now, the official added.