9 held in Rs 712 crore investment fraud; Hyderabad cops find possible Hezbollah link

Hyderabad: A nine-member gang involved in investment fraud of Rs 712 crore, with suspected links to the Hezbollah terror group, were arrested by the Hyderabad Cyber Crime Police on Saturday. Chinese masterminds were said to be behind the fraud. The victims were allegedly lured by them with false promises of easy returns through a fraudulent website and task-based investment offers on social media platforms.

The investment fraud came to light after a city-based businessman filed a complaint with the Hyderabad Cyber Crime police after losing Rs 28 lakh to the fraudsters.

The accused Prakash Mulchandbhai Prajapati, Kumar Prajapati, Naimuddin Wahiduddin Shaik, Gagan Kumar Soni, Parveez, Shameer Khan, Mohammed Munawar, Shah Sumair, and Arul Dass are natives of Mumbai, Ahmedabad and Hyderabad.

The main accused Prakash Prajapati supplied over 65 accounts to the Chinese in which transactions to an amount of Rs 128 crores took place. There are about 745 complaints in National Cybercrime Reporting Portal (NCRP) throughout the country on the accounts supplied by the fraudsters. Other accounts through which the fraud money was converted to USDT, a cryptocurrency, have a volume of Rs 584 crores. The total amount of more than Rs 712 crores has siphoned by the fraudsters.

Modus operandi

According to the complainant, the gang offered him a part-time ‘Rate and Review’ job through the Telegram app, which he believed to be genuine. They also asked him on register at their website.

“Initially, he was given tasks such as loading/investing smaller amounts of Rs 1,000, for which he earned Rs 866 as profit. Every time he loaded/invested money, his investment was displayed in a window like an online wallet which showed options like ‘Invest money’, ‘Withdraw money’, ‘Perform tasks’ etc.,” said Hyderabad police commissioner CV Ananda during a press meeting.

Their plan did not end there. Further, the complainant was given four sets of 30 tasks, for which the victim needed to load the wallet with money initially and then rate and review. In the first set, he loaded Rs 25,000 and earned a profit of Rs 20,000 on the website, but the victim was not allowed to withdraw the profit.

When the victim wanted to withdraw the investment so far, the gang asked he has to complete all the four set of tasks to get the profit. In the second and the third sets the asked the victim to load higher amounts of Rs 1,00,000 and 2,00,00 respectively. They continue to would display the profits earned by performing these tasks on the fraudulent wallet online.

In the fourth set of 30 tasks, they introduced premium tasks for which he had to load the wallet with around Rs 25 lakhs. The victim completed the task by loading the said amount with a fond hope that he can withdraw the profits in the end. However, they asked the victim to pay more Rs 17 lakhs as withdrawal fee to get back the total amount including the deposit. At this point, the victim had invested Rs 28 lakhs which he couldn’t withdraw from the wallet.

Amount transferred to various accounts

“During the investigation, we found that Rs 28 lakhs that the victim lost had been transferred to six accounts. Finally, the fraudulent money was used to purchase cryptocurrency in Dubai,” said the CP.

When the police made enquiry on the primary account, they found that it belonged to Radhika Marketing run by Mohd Munawar of Hyderabad.

Opened 33 shell companies and 61 accounts

“Upon enquiry it is found that Munawar along with Arul Dass, Shah Sumair and Shamir Khan went Lucknow on the instructions of Manish, Vikas and Rajesh to open bank accounts in the names of shell companies, investing Rs 2 lakhs per account. They opened 33 shell companies and 61 accounts in the name of the shell companies and handed over the same to Manish,” the police said.

Chinese masterminds

After opening the accounts, the accounts were sold to Kumar Prajapathi, an associate of Prakash Prajapathi. He was associated with the Chinese nationals, Lee Lou Guangzhou, Nan Ye, Kevin Jun, who run the entire system of task-based investment fraud. They were using Telegram to lure the victims.

Prakash Prajapathi coordinates with the Chinese by supplying Indian bank accounts and shares the OTPs for operating these accounts from Dubai/China through remote access apps such as Cooltech and AirDriod.

When the Chinese loot the Indian victims, the money is credited to primary shell/mule bank accounts which are being supplied by Prakash Prajapati. Some of the gang members who are the residents of Mumbai, settled in Dubai converted the fraudulently gained INR to USDT and transferred the same to Chinese. For every fraudulent transaction in these accounts Prakash Prajapati was paid 2-3 per cent as commission.

Prakash transfers his part commission through the Hawala route. To give the same to the account suppliers with the help of Kumar Prajapathi, he routes it from China by importing electric bikes (Hawala) with the company named Ruxin International Co. Ltd.

“Prakash Prajapathi used a Tron coin wallet address for getting his commissions in USDT or TRON. These cryptowallet transactions in his wallet have cryptotransfers to another wallet address. These in turn have been found to have transaction linkages with two other cryptowallets including Hezbollah wallet (labelled as wallet belonging to the Terror Financing Module) and have been granted sanctions against the wallet in different countries,” said the CP.

The police froze an amount of Rs. 10,53,89,943 (more than Rs 10 crores) in accounts linked to the fraud. Other evidences, including 17 mobile phones, 2 laptops, 22 SIM cards, 4 debit cards, documents from 33 companies, 3 bank cheque books, 12 Chinese Yuan currency notes, 6 Chinese Yuan currency coins, and one passport were seized.