ED arrests Naisar Kothari, crypto-currency trader in Rs 1100 Cr Chinese hawala scam

By Coreena Suares  Published on  11 Dec 2020 1:30 PM GMT
ED arrests Naisar Kothari, crypto-currency trader in Rs 1100 Cr Chinese hawala scam

Hyderabad: The sleuths of Enforcement Directorate have arrested Naisar Kothari, a crypto-currency trader for his alleged involvement in multi-crore online betting scam and international hawala racket to the tune of Rs 1100 Crore. The arrest has been made under Prevention of Money Laundering Act, and Kothari was produced before the court on 11th December.

The Enforcement Director took up the probe based on a complained filed by Hyderabad police's Anti-CyberCrime wing. The city cops acting upon a complaint regarding online betting scam, booked two Chinese based companies, namely M/s Linkyun Technology Private Limited and M/s Dokypay Pvt Ltd under section 420, 120 B of Indian Penal code and Section 3 (1) of Telangana state gambling Act 2017.

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.

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. Login credentials ; dongles for HSBC bank accounts and payment aggregators like Paytm, Cashfree, Razorpay etc were shipped to China and were being operated from there.

Subsequent investigation revealed that apart from providing payment aggregator re-seller services to banned Apps in India, these Chinese owned Companies were indulging in International hawala and illegal activities.

"Investigation of money trail revealed that a large amount of money was being inexplicably transferred to some Crypto-currency traders based in Bhavnagar. Acused Naisar Kothari had purchased USDT Crypto-currency on behalf of the accused company and had transferred them to unknown wallets on foreign exchanges" officials of ED said.

Earlier, ED 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. Three persons, including one Chinese national, were arrested earlier in this case and a chargesheet has been filed against them in the PMLA Court.

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