New Delhi: The Enforcement Directorate (ED) has unearthed a group of Indian firms running online Chinese betting apps luring people with the promise of attractive rewards on seemingly simple games of chance.
These online betting apps were being run through websites which are hosted from outside India. The ED said in a statement, "Apart from indulging in banned activities like online betting, this network of companies with their reliance on online wallets and their lax regulatory systems could have been used for hawala transactions as well."
The financial probe agency on Friday conducted searches at 15 locations spread across Delhi, Gurugram, Mumbai and Pune and froze Rs 46.96 crore held in four HSBC Bank accounts. Besides this 17 hard disks, five laptops, phones and crucial incriminating documents were seized during the raids.
The ED conducted searches at the registered offices of these companies, their directors and Chartered Accountants involved in illegal acts. The ED had initiated an investigation under the Prevention of the Money Laundering Act 2002 (PMLA) based on the FIRs lodged by Cyber Crime Station (CCS) of Hyderabad Police against Dokypay Technology Private Limited, Linkyun Technology Private Limited and others.
Three persons were arrested by the police namely Yan Hao, working as Manager of Beijing Tomorrow Power Company and a resident of Haidain di street in Beijing, China; Dhiraj Sarkar and Ankit Kapoor. The accused had adopted a novel modus operandi for the online betting scam.
During investigation it was revealed that some Chinese nationals floated multiple Indian companies with the help of some Indian Chartered Accountants.
Initially dummy Indian directors were used to incorporate the companies and, after some time, Chinese nationals travelled to India and became directors in these companies.
Some locals were hired and they opened bank accounts with HSBC Bank and trade accounts with online wallets namely Paytm, Cashfree and Razorpay.
Once bank accounts were opened, the internet access credentials were couriered by the Indian employees to China and major payment instructions came from the beneficiary owners who were safely ensconced in China.
The accused companies floated large numbers of similar looking websites which were hosted through Cloudflare, USA. "These websites attracted gullible persons to become members and to place bets on various online Apps which promised attractive rewards on simple games of chance," the ED said.
Further, a network of agents was hired to attract new customers or members. These agents created closed Telegram and WhatsApp based groups and attracted lakhs of gullible Indians. Referral codes were used to privately invite new members. This also helped the sponsoring member to earn commissions.
Paytm and Cashfree were used to collect money and pay commission to all these agent members. Hundreds of websites were created to promote online betting under the garb of e-commerce. All websites were not activated daily. Some were activated for placing bets and the information on daily active websites was shared with members through Telegram groups.
During the course of search, the ED has identified multiple bank accounts mostly held with HSBC Bank. Analysis of two bank accounts of Dokypay Technology Private Limited revealed that, in the last year, the account has seen a collection of Rs 1,268 crore out of which Rs 300 crore came via Paytm payment gateway and around Rs 600 crore was transferred out via Paytm payment gateway.
The account analysis of Linkyun Technology revealed a similar pattern, said the ED, adding that it is also revealed that outward foreign remittances for payments to the extent of Rs 120 crore from these accounts. Large unexplained financial transactions are also seen with other Indian Companies which are running online Chinese dating apps for Indian customers, the agency said.
The ED is in the process of obtaining information from online wallet companies, HSBC Bank, ROC and the investigation is under progress.