The Enforcement Directorate (ED) is looking into a number of online gambling fraud cases, including those against businesses that were controlled by Chinese organisations using fictitious Indian directors and involved nearly 4,000 crore in transactions. The bureau is looking at 1,815 suspicious accounts’ financial trails in the case involving Chinese businesses. It claims that two businesses, Linkyun Technology Private Limited and Dokypay Technology Private Limited, defrauded consumers out of $1,146 crore.
The ED claims that the parent corporations in China provided the initial funding for these businesses in the form of foreign direct investment (FDI). According to allegations, the Indian firms served as payment collectors for a number of mobile applications that were removed from the Google Play Store for improper behaviour. An agency representative stated that ‘download links of such prohibited programmes may be exchanged over any online chat network’.
The agency claims that throughout its investigation, it discovered that the scammers used a variety of payment channels to conduct international ‘hawala’ transactions and get local revenue. Using various shell firms and ‘bogus’ airway bills that purported to demonstrate the import of cloud CCTV storage leasing services, the ED discovered after following a 263 crore trail that 106 crore and 100 crore respectively were routed to Singapore and Hong Kong. Through a cryptocurrency exchange, almost 57 crore was transferred.
Five domestic companies that had established accounts with a Mumbai branch of a public sector bank were also targeted by the agency. Investigations conducted afterwards led to the discovery of 49 more private bank accounts and an international movement of around Rs. 723 crore. Another account with a Korean bank’s Gurugram branch was used to send ?42 crore.
Based on the investigation’s findings, the ED has already made multiple arrests, including those of Deepak Nayyar, Yan Hao, Naisar Shailesh Kothari,an Indian director, and crypto trader Naisar Shailesh Kothari. After Mr. Nayyar’s arrest in May, the agency claimed that the money had been transferred to Hong Kong through a few State Bank of India and State Bank of Mauritius branches in Mumbai. An earlier arrest in the case—in which so far, assets totaling 45 crore have been seized—involved chartered accountant Ravi Kumar.
In a separate investigation into Coda Payments India Private Limited (CPIPL) and the mobile application ‘Garena Free Fire,’ the ED has frozen assets worth 68.53 crore rupees. The accused made unauthorised payment deductions from the sales of digital tokens to the gamers, which are used to improve their gaming experience. According to the CBI, the CPIPL collected roughly 2,850 crore and sent 2,265 crore overseas. For the purpose of monetizing and producing income for online or game producers, the firm coordinated payment collections from end users of games like ‘Garena Free Fire, Teen Patti Gold, and Call of Duty, etc’.
The payment system used by the game’s creators ‘intentionally’ sends alerts after the initial transaction requesting authorization to make more purchases without authentication. The ED claims that a significant number of users, the majority of whom were youngsters, would click on the message without realising they were authorising all future purchases without additional identification.
From its base in Singapore, Garena publishes ‘Free Fire’. An agent for Coda Payments Singapore Pte, the Coda Payments India was purportedly the only purpose for its incorporation, limited to receiving payments and sending them to the parent company. The agency has blocked or confiscated assets worth over 51 crore, including Bitcoins, in a separate investigation involving the gambling software E-nuggets. It is claimed that the cash obtained from victims was transferred to more than 300 accounts.
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