Hyderabad: Sleuths of Enforcement Directorate conducted searches at 15 locations spread across Delhi, Gurgaon, Mumbai and Pune and seized properties worth Rs 46 crore of chinese based companies operating illegal betting.
The officials searched the registered offices of the companies, their Directors and Chartered Accountants, involved in illegally running Online Betting APPs via websites hosted from outside India. ED seized 17 Hard disks, 5 laptops, phones, crucial incriminating documents and has also frozen Rs 46.96 Crore held in 4 HSBC Bank Accounts.
ED is investigation the case under PMLA based on the FIRs lodged by Cyber Crime Station (CCS) of Hyderabad Police. Hyderabad Police booked M/s Dokypay Technology Private Limited and M/s Linkyun Technolgy Private Limited under sections 420, 120B of IPC, Sec 3(1)(i) of Telangana State Gambling Act 2017, Prize Chits & Money Circulation Scheme Act.
Three persons were arrested Including a Chinese national Yan Hao (24), working as Manager of Beijing Tomorrow Power Company. Two indian nationals Dhiraj Sarkar and Ankit Kapoor were also taken into custody.
Accused companies floated large number of similar looking websites which were hosted through Cloudfare, 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.
Further, a network of agents were hired to attract new customers/members.These agents created closed Telegram & 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 commission. 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 to members using Telegram groups.
Investigation revealed that, Indian chartered accountants some Chinese nationals floated multiple Indian Companies. Initially dummy Indian Directors were used to incorporate the companies and later Chinese nationals travelled to India and took Directorship.
They hired locals and used to open bank accounts with HSBC Bank and open trade accounts with online wallets namely Paytm, Cashfree, Razorpay etc. 'These online wallets had lax due diligence mechanisms and their non-reporting of suspicious transactions to the regulatory authorities helped the accused companies to launch Pan India operations. Once Bank Accounts were opened, the internet access credentials were couriered by the Indian employees to China and major payment instructions came from the beneficial owners who were safely ensconced in China' ED officials said.
During the course of search, ED has identified multiple Bank Accounts mostly held with HSBC Bank. Analysis of 02 Bank Accounts of M/s Dokypay Technology Private Limited revealed that, in the last year, the account has seen collection of Rs 1268 Crore out of which Rs 300 Crore came via Paytm payment gateway and around Rs 600 Crore was transferred out via Paytm payment gateway. Account analysis of M/s Linkyun Technolgy revealed similar pattern.
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 who are running Online Chinese Dating APPs for Indian customers. There is a suspicion that, 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. ED is in the process of obtaining information from online wallet companies, HSBC Bank, ROC etc.