China-based online money laundering racket using cryptocurrencies exposed: Cops
Uttarakhand police claims to have busted an online racket suspected to have cheated at least ₹250cr from unsuspecting investors by promising to double their money in 15 days but siphoning it out of India instead by converting it into crypto currency.
One Pawan Kumar Pandey, accused of running a shadow company to transfer the cheated money to his alleged “handlers in China”, was arrested from Noida in Gautam Buddh Nagar district of Uttar Pradesh on Monday night, police said. 19 laptops, 592 SIM cards, 5 mobile phones, 4 ATM cards and one passport were also recovered from him.
Uttarakhand police chief (DGP) Ashok Kumar said the racket came under scrutiny following a complaint by two Haridwar residents: Rohit Kumar and Rahul Kumar Goyal.
“A week ago, they claimed that one of their friends told them about a mobile app on Google Play Store named Power Bank, which doubled returns on investment within 15 days. Believing him, they downloaded the app and deposited ₹91,200 and ₹73000,” said Kumar.
However, when they didn’t receive any return even after one month, they realised they had been duped, he added.
“A probe was initiated by the special task force which found that the mobile app in question was available on Google Play Store between February 2021 and May 12, 2021, during which, it was downloaded by at least 50 lakh people. It also found that the money deposited through the app was then transferred to bank accounts of the arrested accused through payment gateways,” said the police officer. He added that the money was then converted into crypto currencies.
“During the cyber forensic probe, the app was linked to China, where Pandey’s handlers are sitting. They used to en-cash the crypto currencies into their local currency to end the chain of money laundering, which started with duping Indians through the app,” said Kumar.
Uttarakhand’s deputy inspector general (law & order) Nilesh Bharne, who was one among the investigators, said, “The accused Chinese handlers used to befriend Indians by luring them... with the promise of some commission under the garb of expanding their business in India.”
“In this case too, they partnered with Pandey and used his identity documents to register a shadow company with the Registrar of Companies (RoC) and to open two bank accounts, where the money siphoned off from the victims was deposited. They opened a shadow company in Noida named Purple Hui Zing Zihao. Pandey was registered as the company’s owner and the firm was shown as the developer of the fraudulent app,” said Bharne.
Pandey said the bank accounts and the company were handled remotely by the Chinese accused while he received commission from them.
“He was paid ₹1.50 lakh by the Chinese as ‘salary’. He... also told police that there are many other similar apps being operated by his handlers... using the same modus operandi,” said Bharne, adding the accused used to initially double a few investments to win the trust of prospective investors.
The senior police officer said the police now have a list of 25 similar applications available on Google Play Store.
“We have taken at least 20 such shadow companies under our radar for suspected fraudulent activities like the above mentioned one. We have received 20 other similar complaints from people in the state and they [the complaints] are under probe,” he said.