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Financial fraud: Punjab cops’ brush with Darknet, Bitcoins

The Punjab Police are investigating their first case of financial fraud committed using the unregulated virtual currency Bitcoin to pay for information on the Darknet.

punjab Updated: Jul 20, 2016 10:11 IST
Chitleen K Sethi
Financial fraud
The Punjab Police are investigating their first case of financial fraud committed using the unregulated virtual currency Bitcoin. (Representative image/Shutterstock)

The Punjab Police are investigating their first case of financial fraud committed using the unregulated virtual currency Bitcoin to pay for information on the Darknet.

A gang of four fraudsters -- two operating in Punjab and two in the US -- managed to remit Rs 1.2-crore worth of US Dollars to India, using credit card information bought on the ‘anonymous network’.

The proceeds of the crime were shared by the Indian fraudsters with their accomplices abroad using Bitcoin, a digital currency used as the preferred mode of payment on the Darknet.

Main accused Baljit Singh and his accomplice, Amritpal Singh, both 27 years old and residents of Jalandhar, were arrested last week. Between December 2014 and February 2015, the two allegedly gathered $500 each from 400 remittances they showed as being done by Punjabis living in the US to their relatives back home through Western Union.

“Western Union is a US-based money transfer company with hundreds of agents in Punjab. Its prime agent in the state, Paul Merchants, was the first to raise a red flag over these transactions,” said Ananya Gautam, inspector general (IG), financial intelligence unit, Punjab Police.

How the gang was formed

Baljit had gone to the US with his uncle in 2003. There he came in contact with a Nigerian national, Olumu, who was already involved in internet frauds. Barely in his teens, Baljit joined him and allegedly committed some frauds and was detained by cops there. He came to India in 2014 and became friends with Amritpal Singh, a commission agent known to his uncle Jasvir Singh, who is also a commission agent.

Amritpal and Baljit allegedly planned the fraud and contacted Ankit Puri, a hacker in the US, whom Baljit then put in touch with Olumu. “This is how the gang got together. They had planned the perfect cyber fraud. Had it not been for their growing greed they would have continued to do this their entire lives and no one would have come to know,” said Gautam.

The modus operandi

Ankit and Olumu began with gathering details of Punjabi Indians living in the US. City directories came handy. They made a list of over a dozen names and addresses. Then they gathered credit card information of random persons living in the US. “Credit card information can be easily stolen by those who know how to do it. The card is skimmed through a machine that catches all the numbers on it and stores them. The stolen information is available for a cost on the Darknet, and Olumu could have purchased it,” said Gautam.

Also read: In a first, drug trafficking reported in India through Darknet, Bitcoin

“Punjabi names and addresses were used to fill in remittance forms at the Western Union site in the US. A fake recipient’s name and address in Punjab were also entered. The payment was made using stolen credit card details. The amount was never more than $500, so that the credit card holder does not get suspicious. We are trying to find if the US police received any complaints,” said the IG.  

Baljit and Amritpal created fake identity (ID) cards of recipients (using names entered by Olumu and Ankit in the US), pasting their own pictures on forged driving licences, Aadhaar cards and voter cards. They visited Western Union branches across Punjab to collect the money.

The police have recovered at least 15 such IDs used by the fraudsters. Other than the ID card, the company asks for a unique code and the name and address of the sender before handing over the cash. That would have already been shared by Olumu while transferring the money. Other than his uncle, Baljit also involved his father, Gurmeet Singh, and another accomplice, Gagan, to collect the money.

Greed proved to be their undoing

Same pictures on multiple IDs finally came to Paul Merchant’s notice. “A suspicious transaction report (STR) was sent to the financial intelligence unit (under the ministry of finance) by Paul Merchants. The information was shared with us in December 2015 and the first arrest in the case was made last week,” said Gautam.

The proceeds of the crime were shared by Ankit and Olumu using Bitcoins. “Baljit claims that Olumu was in touch with him only through the internet. There was rarely any direct contact. He wanted payment through Bitcoins. Baljit bought Bitcoins and transferred these to Olumu,” said Gautam.

While Baljit, Jasvir and Amritpal have been arrested, Gurmeet and Gagan are yet to be apprehended. Also named in the FIR is Delhi-based Vijay Grover, who allegedly helped Amritpal get in touch with Ankit Puri.