The Enforcement Directorate (ED) on Friday, August 28, 2020 raided 15 locations over suspicions of money fraud via online betting and gambling apps owned by Chinese companies.
ED suspects that certain Chinese Apps are allegedly running online betting operations in India and in connection with the same it has frozen four bank accounts containing Rs 46 crore approximately. The gambling racket is suspected to be worth over Rs 1000 crores.
The locations under raid are spread across Delhi and include Gurugram, Mumbai, Pune etc. The ED got suspicious of money-laundering on the basis of a Hyderabad police FIR against two companies Dokypay Technology Pvt Ltd and Linkyun Technology Pvt Ltd. There were other FIRs also including those where a Chinese national Yah Hao and two Indian directors, Dhiraj Sarkar and Ankit Kapoor were arrested by Hyderabad police earlier.
ED has launched a probe under the Prevention of Money Laundering Act (PMLA) as the online betting scam seems to operate with the help of Indian Chartered Accounts who incorporate companies in India, later to be taken over by Chinese bosses and directors.
Multiple unaccounted bank transactions have also come to light where majority of payment instructions were received by superiors in China.
ED officials stated that “accused companies floated large number of similar looking websites which were hosted through Cloudfare, US. These websites attracted gullible persons to become members and to place bets… Further, a network of agents was hired to attract new customers/members. These agents created closed Telegram and WhatsApp based groups and attracted lakhs… Referral codes were used to privately invite new members. This also helped the sponsoring member to earn commission”.
ED further stated “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”.
“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, registrar of companies, etc,” ED added.