Authorities in India have frozen INR123 crore ($15 million) and conducted searches in ten locations during a crackdown on Chinese controlled betting and loan apps.
The Directorate of Enforcement, a domestic law enforcement and economic intelligence agency, announced the news on Wednesday. It stated that the bank deposits were frozen following searches in ten locations in Mumbai, Chennai and Kochi. The operation was carried out under the Prevention of Money Laundering Act and targeted Chinese controlled betting and loan apps accused of defrauding numerous individuals.
“The search operations also resulted in the recovery and seizure of several digital devices, various incriminating documents, multiple bank accounts used for laundering, and details of various movable and immovable assets of the accused persons and entities,” the agency said in a statement.
The investigation started based on First Information Reports registered by police in Kerala and Haryana that referred to allegations of exploitation and cheating through online gambling, loan and betting apps apparently controlled by Chinese companies. A First Information Report serves as the initial step in the investigation and prosecution process in the Indian legal system.
The Directorate of Enforcement further explained that the proceeds of crime generated from the above apps and other platforms are aggregated and laundered through mule accounts opened in various banks in Kerala State using payment aggregators. On top of that, funds were also collected through various shell companies in several Indian states and then remitted to other shell entities outside of the country by means such as cryptocurrency transfers carried out as part of bogus software imports and forex currency purchases.
Most of these foreign companies are said to be in Singapore and stand accused of raising fake invoices. These were then processed through another company belonging to the group, a Singapore based forex settlement platform with a subsidiary in India, that processed the payments despite the Indian entities involved in the operation not providing more than the fake invoices, thereby breaching local AML regulations.
