10 Chinese nationals under police scanner for running international racket of fraudulent loan apps

Investigators suspect that the fraud money was converted into cryptocurrency and transferred to China under the garb of business transactions carried out using shell companies

Mumbai: As many as ten Chinese nationals are under the scanner of Mumbai Cyber police that busted a massive international loan fraud racket which is allegedly been operated by Chinese nationals since 2018 in India.

The racket had dedicated members in every department. Some people would only make phone calls, some would fraudulently arrange sim cards, some would look after creating bogus or shell companies, some would generate UPI ids, and some would transfer the fraud money abroad by converting them into cryptocurrency. (StockPic)

They lured hundreds of Indian youths by offering them jobs in FinTech companies and call centres, systematically made them work for the loan fraud racket and cheated lakhs of Indians with thousands of crores in the past four years.

Investigators suspect that the fraud money was converted into cryptocurrency and transferred to China under the garb of business transactions carried out using shell companies.

Joint commissioner of police (crime) Suhas Warke on Friday said that the cyber police busted the massive racket which was being operated in a well-organised manner and arrested its 14 members from various parts of the country (HT had reported on Thursday).

“The racket had dedicated members in every department. Some people would only make phone calls, some would fraudulently arrange sim cards, some would look after creating bogus or shell companies, some would generate UPI ids, and some would transfer the fraud money abroad by converting them into cryptocurrency,” said Warke.

The police have identified 50 cryptocurrency wallets through which transactions were being carried out to send money abroad under the pretext of investment in cryptocurrency via shell companies.

In a well-coordinated manner, the dedicated team of 22 officers, and 12 staff from all five cyber police stations carried out the crackdown in the past month and made arrests. Few officers are still out. “We have managed to crack down on the core group of the fraud racket and arrested one of its Indian members, who was left behind,” said a senior officer.

Fraud recruitments

In 2018, the core group of Chinese nationals after recruiting hundreds of youths in India conducted seminars with the help of translators during recruitment and training levels. After setting up the system in the country, the core group of masterminds left India before the pandemic hit the country. But, one Indian member of the top functionary and core group of the racket was left behind, who has been identified as 24-year-old Priyanshi Kandpal, who is from Haldwani, Uttarakhand. She is among the 14, who got arrested. Graduated in financial studies, Kandpal has also taken a course in the Chinese language and joined the racket in 2018 as a translator. Later, she gradually climbed upwards and became a core member of the racket.

Targeting Indians with a six-region plan

Explaining the functioning of the racket, a police officer said that callers would work on different stages. One caller would make a phone call offering loans, while the other would help get the loan. Another would send due date reminders, and the remaining ones would recover money by using harassment and torture tactics.

The callers would get a salary of nearly ₹25,000, including incentives, and then the next line of employees were the team leaders (TLs) who would look after the teams of 40 callers. TLs would get a monthly salary of ₹35,000- ₹40,000 with incentives. Then, there were zonal heads, who were being paid ₹70,000 to ₹1 lakh, and the region head would get a monthly salary up to ₹2 lakh. The entire country was segregated into six regions by the racket and the members were working from home.

Police have decided not to arrest those callers, who had just made phone calls to victims and processed their loan requests unaware of the fraudulent intent of the top bosses. They would be made witnesses in the case, a senior officer said.

There were separate members who would look after the work of creating UPI links to process the extortion transactions. “We have found four to six UPI ids linked to bank accounts used in the commission of the offence. There are several lakhs of UPI transactions carried out by the racket members for fraud,” said an officer.

How was the shell company used?

One arrested accused Liang Chi Shang, whose grandfather was a Chinese national, is also a key member of the racket and would look after the requirements of shell companies for the racket’s operations. He would sell each shell company to the racket for ₹3.5 lakh each. He was also working as the liaison and confronting manager and getting a salary of ₹2 lakh per month, police officers’ part of the probe said.

203 loan fraud apps were used

Mumbai cyber police’s investigation has revealed that the racket duped people across the country using 203 fraud loan apps. “Every time we would manage to get the fraud loan apps blocked by the Play Store, they would come up with new ones with different names. Sometimes they directly send links to people to download such apps,” said DCP Hemraj Rajput, in-charge of Mumbai police’s Cyber Wing.

In May this year, the cyber police wrote to the service provider to block 103 loan fraud apps, which were defrauding people by extorting money from them by fraudulently getting access to their contacts and private data.

Accused were trained in China

Cyber police officials have learnt that most of the arrested accused (except those who made calls to the victims) visited China multiple times in the past few years and are suspected to have got training on how to operate the fraud racket. Several arrested accused were in direct contact with their Chinese counterparts.

Apps curated for the fraud

The China-based masterminds of the racket developed a highly professional mobile application Ding Talk for the smooth functioning of the racket. All the members of the racket would operate this app. The callers, recovery agents, and other members would update information on the online datasheet available on the app, and the racket would run swiftly. “If any member of the racket had a doubt, they could directly call the top segment people in China using the internet-based calls and seek guidance. The data on this app is end-to-end encrypted, but we have managed to collect some data as evidence during the live sessions of fraud,” said a senior police officer.

“We are also coordinating with Nepal police, and checking if any member of the racket is linked to Nepal,” another senior police officer said.

Police sources have said that similar loan fraud rackets are being operated in South East Asia and African countries by Chinese nationals.

More arrests are likely in the case as it’s an ongoing investigation. Concerned government departments and law enforcement agencies would be informed about the racket’s operations and their help would also be taken as and when required, another senior officer said.

“We will rope in financial experts and forensic experts for the massive investigation,” DCP Rajput said.

₹23 crore saved by police

Joint CP, crime Suhas Warke said that the police have frozen 360 bank accounts linked to the racket and ₹14 crore of fraud money has been frozen in those bank accounts. Also, ₹2.17 lakh USDT (cryptocurrency), which is equivalent to ₹1.76 crore has also been seized by contacting crypto exchange service providers. Top police sources said that the process of freezing more than seven crore rupees of fraud money is ongoing and would happen soon.

Fraud loan apps on the radar of cyber cops

Additional commissioner of crime branch Viresh Prabhu said that the cyber police have been asked to take over the investigations of all the 29 cases of loan fraud registered in Mumbai as they could have links to this racket. Investigation in this direction is on. Earlier, cyber police were only probing loan fraud cases involving more than ₹10 lakh. So far, the racket’s involvement in two cases of cyber police is found.

Tips for people from the police

- Not to take a loan from any mobile loan app before checking its background and credibility. Instead, approach a bank for loan.

- Don’t install such apps from any link sent in SMS.

-Do not give permission to any such apps to access your contact lists, media and camera

- Don’t give any unknown person your documents, it can be misused for fraudulently procuring sim cards or opening bank accounts in your name.

- Don’t pay money to frauds, immediately report the matter to the police in 1903 and give details of fraud transactions, so that the money is frozen in the bank account or e-wallet before the frauds withdraw or divert it.

Report loan app frauds on: 1903