5 layers of diversions used to launder ₹2,200 cr raised via HPZ Token: ED

Investors in HPZ Token were promised returns of ₹4,000 per day for three months in lieu of an investment of ₹57,000, and the funds thus raised from different parts of the country were diverted to various shell firms, ED officials said

MUMBAI: Five layers of diversions – including mule bank accounts, shell firms and dummy directors – were used to launder around ₹2,200-crore raised from the public via the ‘HPZ Token’ mobile app and website, the Enforcement Directorate (ED) has found. The proceeds of crime in the case is estimated at ₹2,200 crore.

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Investors in HPZ Token were promised returns of ₹4,000 per day for three months in lieu of an investment of ₹57,000, and the funds thus raised from different parts of the country were diverted to various shell firms, ED officials said.

The ED’s probe traced the proceeds of crime from the point of collection from victims (‘investors’) to the alleged key accused in the HPZ Token scam, including a man identified as Bhupesh Arora. Money was gathered from gullible investors using several UPI accounts, which in turn were connected to mule accounts maintained with a private bank, ED officials said.

The POC collected in the mule bank accounts were then allegedly transferred to several shell companies’ accounts. These shell companies collected the POC via misrepresentation and subsequently misused the services of a few payment aggregators, ED officials said. A small part of the POC collected in shell companies was also returned to investors to gain their trust and induce them to invest further.

From these shell companies, the POC was allegedly transferred to the accounts maintained by two private firms, Shigoo Technology Private Limited and Lillian Technocab Private Limited. From the accounts of the two firms, the POC was allegedly moved to another layer of shell firms and dubious entities, ED officials said while referring to its supplementary chargesheet submitted on January 12 in a special court at Dimapur, Nagaland.

All these dubious concerns were allegedly controlled and managed by Arora and his associates, the ED found.

Arora allegedly used the network of shell entities, mule accounts, hawala operators, foreign currency exchangers to launder the POC, the officials said. Arora is currently under arrest by the ED in a separate case where he is accused of duping a large number of gullible investors using another fake investment app, officials said.

The ED has provisionally attached funds worth ₹650 crore lying in several mule accounts under the probe’s scanner. In April 2023, the investigating agency carried out searches at three bank/ payment gateway premises in Mumbai, Gurgaon and Bangalore where the accused persons had accounts.

The ED’s investigation is based on a case registered by Cyber Crime Police Station, Kohima, Nagaland in 2021 against HPZ Token and others. During investigation, some other cases were also found to be linked to the original case, like a 2021 case in Assam and a 2022 case by the Central Bureau of Investigation in Delhi, and they were included in the probe, officials said.