The Enforcement Directorate (ED) is investigating major beneficiaries of the payouts from Paytm and HSBC Bank accounts of illegal betting transactions worth Rs 1,000 crore. The transactions involve Chinese nationals who used apps that India banned recently.
The Chinese gamblers used payment gateways for overseas transactions.
On 22 September, a special Prevention of Money Laundering Act court in Hyderabad sent a Chinese national and two others to eight days of ED custody. The ED had arrested Chinese national Yan Hao and two of his Indian associates (Dhiraj Sarkar and Ankit Kapoor) on 15 September in connection with its online betting and money laundering case.
“Investigation under PMLA to identify the major beneficiaries of the payouts from Paytm and HSBC Bank accounts is under progress. Summons have been issued to various persons, including the Chinese nationals who are the directors of the company,” the ED said on 22 September.
The investigation into the banned Chinese apps, illegally operating in India, showed that related websites “acted as payment aggregators for multiple apps which were banned by Google Play store for lax technical security, data theft or betting activities”, the ED said.
“The accused were planning to set up an NBFC for micro credits but their request for license was declined by regulatory authorities. The quantum of fraud may be more than Rs 1,000 crore. The custodial interrogation of the three accused is underway to unearth the entire scam,” the ED said.
Chinese nationals floated two companies, Dokypay Technology and Linkyun Technology, as part of an online betting scam. These companies were behind a large number of websites that attract gullible persons to become members and place bets on various online apps which promised attractive rewards on simple games of chance.
“They used Paytm and Cashfree to collect money and pay commission to all these agent members. They created hundreds of websites to promote online betting under the garb of e-commerce,” the ED said.
The agency had earlier conducted searches at 15 locations in Delhi, Gurgaon, Mumbai and Pune which resulted in seizure of 17 hard disks, five laptops, phones and crucial incriminating documents. The ED has also frozen Rs 47 crore held in four accounts in HSBC Bank.