ED, NIA pitch in to probe role of Chinese companies in ₹712-crore investment fraud in Hyderabad

The investigators were startled when they came to know that the amount generated after committing the fraud was diverted to Hizbul Mujahideen, a terrorist organisation, through hawala channels. The amount was then transferred as cryptocurrency. The police also found crucial evidence in this regard.

The Hyderabad police then shared this information with the central agencies, prompting the ED and the NIA to pitch in to conduct a detailed probe.

As many as 15,000 people across the country fell prey to the fraud committed by the accused.

The racketeers attracted people via Telegram and WhatsApp in the name of doing various job-oriented tasks after investing money.

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How the fraud was committed

According to police, the fraud came to light when a complainant informed the police that he was offered a part-time job to “Rate and Review” via the Telegram app. He believed it to be genuine and registered on their website, which had the URL  https://www.traveling-boost-99.com.

Initially, he was given a simple task to give a five-star rating to one set of five tasks by loading/investing a small amount of ₹1,000. He was happy that he earned a profit of ₹866.

Every time he loaded or invested money, his amount was displayed in a window, like an online wallet which showed options like invest money, withdraw money, and perform tasks.

The next time, he was given four sets of 30 tasks, for which the victim needed to load the wallet with money first and then rate.

In the first set, he loaded the wallet with ₹25,000 and earned a profit of ₹20,000, but the victim was not allowed to withdraw the profit.

When he asked them about it, the fraudsters replied that he had to complete all four sets of tasks to get the profit.

In the second and third sets, they asked him to load higher amounts and the profits earned by performing these tasks were shown in the fraudulent online wallet.

In the fourth set of 30 tasks, they introduced premium tasks for which he had to load the wallet with around ₹25 lakh.

The victim completed the task by loading the money, with the fond hope that he could withdraw the profits, but again they asked him to pay ₹17 lakh more as the withdrawal fee for the total amount including the deposit. In all, he lost ₹28 lakh.

During the course of the investigation, it was found that the ₹28 lakh that he lost had been transferred to half a dozen accounts, including an account maintained in the name of Radhika Marketing.

From there, the money had been transferred to various other Indian bank accounts and finally to accounts in Dubai.

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People involved

The money was used to purchase cryptocurrency. The account in the name of Radhika Marketing was associated with a mobile number being maintained with a person called Mohd Munawar of Hyderabad, the police said.

The probe revealed that he, along with Arul Dass, Shah Sumair, and Shamir Khan, went to Lucknow on the instructions of three individuals — Manish, Vikas, and Rajesh, who are all residents of Lucknow — to open bank accounts in the names of shell companies with an offer of ₹2 lakh per account.

They opened 33 shell companies and 61 accounts in the name of companies and handed over the same to Manish, who hired two people — Gagan for web designing of the companies, and Nayeem to coordinate with the account holders.

After opening the accounts, Manish sold the accounts to Kumar Prajapati, an associate of Prakash Prajapati.

Prakash of Ahmedabad is associated with Chinese nationals Lee Lou Guangzhou, Nan Ye, Kevin Jun, and others.

Prakash coordinated with the Chinese in supplying Indian bank accounts and shared the OTPs for operating these accounts from Dubai/China through remote access apps like Cooltech and AirDroid.

Also read: Court sentences bank official, businessmen to 5 years RI for fraud

China and Dubai connections

Chinese masterminds Lee Lou Guangzhou, Nan Ye, and Kevin Jun allegedly run the entire system of task-based investment frauds. They are the ones running these scams and luring the victims by sending messages over Telegram.

The money looted is credited to primary shell or mule bank accounts being supplied by Prakash, layered to some secondary bank accounts to hide the proceeds of crime.

Finally, it is sent to the Chinese and for this, Prakash coordinates with his other associates Arif, Anas, Khan Bhai, Piyush, and Sailesh, who are Mumbai residents settled in Dubai.

They convert the fraudulently-gained Indian currency into cryptocurrency and transfer the amount to the Chinese.

For every fraudulent transaction in these accounts, Prakash was paid a 2-3 percent commission. He transferred part of his commission through hawala channels to the account suppliers with the help of Kumar Prajapati and a major portion is routed from China by importing electric bikes from a company named Ruxin International Company Limited, the police said.

Crypto fraud

It was observed that Prakash Prajapati was using a TRON coin wallet address for his commissions to be paid in USDt — Tether, a popular stablecoin whose value is pegged to the US dollar to reduce its volatility — or TRON.

These crypto wallet transactions in his wallet had crypto transfers to another wallet address, which in turn had been found to have transaction linkages with two other crypto wallets, including the Hezbollah wallet (labelled as a wallet belonging to the Terror Financing Module), and have been granted sanctions against the wallet in different countries.

It was also found that Prakash supplied over 65 accounts to the Chinese in which transactions to the tune of ₹128 crore took place.

Additionally, there are other accounts through which ₹584 crore of fraud money had been converted to USDt.

A total of over ₹712 crore had thus been siphoned off by these fraudsters.