HPZ Token scam: Main accused deemed ‘fugitive economic offender’

The confiscation of Bhupesh Arora’s properties would proceed further as per ED’s request and in accordance with provisions of the Fugitive Economic Offenders Act (FEOA), 2018, the court said

MUMBAI: A special Prevention of Money Laundering Act (PMLA) court in Nagaland on Wednesday declared Bhupesh Arora, wanted in connection with the alleged ₹2,200-crore fraud perpetrated through the ‘HPZ Token’ mobile app and website, as a fugitive economic offender. This will help the Enforcement Directorate (ED), the investigating agency in the case, confiscate and repatriate assets worth around ₹35 crore attached overseas, said ED sources.

HPZ Token scam: Main accused deemed ‘fugitive economic offender’

The confiscation of Arora’s properties would proceed further as per ED’s request and in accordance with provisions of the Fugitive Economic Offenders Act (FEOA), 2018, the court said.

The ED had initiated investigation into the HPZ Token scam based on a case registered by the cyber crime police station in Kohima, Nagaland, under various sections of the Indian Penal Code and the Information Technology Act.

During investigation, the ED found that investors in HPZ Token were promised returns of ₹4,000 per day for three months in lieu of an investment of around ₹57,000 and the funds collected from the gullible public – estimated at ₹2,200 crore – were diverted to various shell firms and individuals/ proprietorship concerns through fraudulent schemes.

Bhupesh Arora and his close associates were behind the fraudulent scheme, revealed statements of individuals, proprietors/directors recorded by the ED under PMLA provisions. The associates worked at the behest of Arora, and transferred the investments to create untraceable layers of transactions to eventually siphon off the money out of India through the hawala route, the ED found.

In April 2023, the investigating agency carried out searches at three bank/ payment gateway premises in Mumbai, Gurgaon and Bangalore where the accused had accounts. Till now, it has attached assets worth ₹497.20 crore, which has been confirmed by the PMLA adjudicating authority.

In March 2024, the ED filed a charge-sheet against 299 persons in the Dimapur special court in Nagaland. The court took cognisance of the charge-sheet after finding that a prima-facie case had been made out under the PMLA against the accused persons/entities. On July 2, 2024, the court issued a non- bailable warrant against Arora.

On Wednesday, special judge at Dimapur’s principal district and sessions court, N Longshithung Ezung, accepted the agency’s plea for declaring Arora as a fugitive economic offender.

In its order, the court took note of the fact that Arora had left India for Dubai on September 16, 2022 after initiation of PMLA proceedings and to escape criminal proceedings, and he had not complied with multiple summons issued by the ED in the interim, as stated by the ED in its plea.

“Till today, he has not joined the investigation and has not appeared before this court despite the issue of summons,” the court said.

It noted the defence counsel’s contention that Arora had been residing in Dubai and travelling in and out of India since 2018 and he had not escaped from the country to escape criminal prosecution.

“From the averments made by the applicant as well as the copy of the passport annexed by the accused in his reply, it is seen that the accused last left the country on 16.09. 2022,” the court observed in its order.

Till now, the ED has located over 100 alleged fake firms in the case, including five in Maharashtra, where assets worth ₹9 crore have been frozen.