Loan app scam: How Chinese-controlled-companies cheated people to invest in crypto through 'HPZ tokens'

Enforcement Directorate (ED) has seized Rs 46.6 crore during multiple raids on banks and payment gateways in the alleged loan app scam. Sleuths of ED raided six business/residential premises in Delhi, Ghaziabad, Mumbai, Lucknow, and Gaya. ED also searched 16 other premises of Banks/Payment Gateways branches/offices in Delhi, Gurgaon, Mumbai, Pune, Chennai, Hyderabad, Jaipur, Jodhpur, and Bangalore in connection to an investigation related to the app-based token `HPZ' and related entities.

When did it begin?

ED initiated a money laundering investigation on the basis of an FIR filed under various sections of IPC by Cyber Crime Police Station, Kohima, Nagaland.

HPZ was an App-Based Token that promised users large gains against investment in mining machines for Bitcoin and other cryptocurrencies.

Crime :

The modus-operandi of the fraudsters was to first lure the victims to invest in the company on the pretext of doubling their investment through HPZ Token. Payments were received from users through UPIs and other various payment gateways/nodal accounts/individuals.

The part amount was paid back to investors and the remaining amount was diverted to various individual and company accounts through various payment gateways/banks from where partly it was siphoned off in digital/virtual currencies. Later, fraudsters stopped payments and the website became inaccessible.

Investigation revealed that the HPZ token was operated by M/s Lillion Technocab Private Ltd and M/s Shigoo Technology Private Limited. M/s Shigoo Technology Private Limited was also found linked to various Chinese-controlled companies.

It was also revealed that various other companies indulged in receiving funds from the public on the pretext of operating various Apps/Websites for gaming/loans/others. ED suspected the involvement of M/s Jilian Consultants India Pvt Ltd, Gurugram behind various companies involved in these frauds.

One such entity, M/s Mad-Elephant Network Technology Private Limited in agreement with X10 Financial Services Limited was operating various loan Apps (Yo-Yo cash, Tufan Rupees, Coco cash, etc.). Similarly, Su Hui Technology Private Limited, in agreement with M/s Nimisha Finance India Private Limited operated Loan Apps.

During the search, various incriminating documents have been recovered and seized. Huge balances were found to be maintained in the virtual accounts of the involved entities with payment aggregators.

Rs. 33.36 Crore was found with Easebuzz Private Limited, Pune, Rs. 8.21 Crore with Razorpay Software Private Limited, Bangalore, Rs. 1.28 Crore with Cashfree Payments India Private Limited, Bangalore, and Rs. 1.11 Crore with Paytm Payments Services Limited, New Delhi. A total amount of around Rs. 46.67 Crore was detected and frozen in various bank and virtual accounts.