Loan app scam: How Andhra police posed as agents to bust Malaysian gang

East Godavari: East Godavari police in Andhra Pradesh arrested three foreign nationals after a loan app scam led to many suicides.

The accused have been identified as Yong Lui Xing, Choo Kai Lun, and Thiagarajan Kasi, all from Malaysia.

Andhra Police interacted with the accused for over 20 days disguised as an agent and lured them to come over to India. The three accused Malaysian nationals who arrived in Chennai were picked up by the police team and brought to Andhra Pradesh.

The Case:

Addressing the media East Godavari SP Sudheer Kumar Reddy said: "The accused are found to be operating out of Malaysia and Vietnam with the help of agents in India. They targeted victims in 8 other countries including Pakistan and Nepal, Bangladesh, and Thailand.”

Based on a complaint filed by the kin of a person who died by suicide in Rajamundry, under Kadiyam police station limits, the case was investigated by the police.

According to the complainant, the victim had taken a loan of Rs 10,000 from a fake loan app and ended up paying many times the amount. The victim was threatened by the app agents who sent him his morphed images and threatened him of sending them to his contacts. Following the threats, the victim died by suicide on May 5.

Police also took into custody an agent who was providing bank accounts with which they were making transactions of more than Rs 1 crore every day.

Modus Operandi

The accused created and ran loan apps and gaming apps from Singapore, Malaysia, Hong Kong, and China.

They targeted victims by providing them with small loan amounts at lower interest rates without any guarantee. Once the loan is taken through these apps, their contacts and images will be accessed by the app developers.

They begin to extort money from the victims by threatening them that they’ll circulate morphed images and videos of the victims to their contacts and post them on social media. While a few pay the amount demanded by the agents out of fear, few end their lives.

"During the investigation, we found that they make transactions of over Rs 1 crore per day through these apps using accounts provided by agents. Taking into account the apps that have been developed and the period operated, the accused make around Rs 50 crore per month through these fake apps," said Sudheer Kumar.

The agents will provide them with multiple Indian savings and current accounts through which the accused operate from abroad.

Cryptocurrency:

The money collected daily by illegal means is either converted into cryptocurrency or transferred abroad through hawala means or transfers through corporate accounts

Contact through social media apps:

“These agents and the financial operators discuss via Telegram, WeChat, or Whatsapp. This is the reason why most of the agents never know the identity of the main accused with whom they are transacting," said Sudheer Babu.

Police will produce the three accused before the magistrate and seek police custody for further investigation and interrogation.

Further investigation would reveal the nexus behind these fake loan apps and their extent of operations.

The accused have been booked under sections 306, 504, 509, 384, 386 r/w 34 IPC and Sec 67 of the IT act.