Online gaming fraud cases: ED probing transactions worth about ₹4,000 crore

The cases include those against the companies run by some China-based entities through dummy Indian directors

The Enforcement Directorate (ED) is investigating multiple cases of online gaming fraud, including those against the companies run by some China-based entities through dummy Indian directors, involving transactions worth about ₹4,000 crore.

In the case pertaining to Chinese entities, the agency is pursuing the money trails of 1,815 suspect accounts. It alleges that two companies named Linkyun Technology Private Limited and Dokypay Technology Private Limited were involved in duping the users to the tune of ₹1,146 crore.

According to the ED, the initial capital in these firms was brought in the form of Foreign Direct Investment (FDI) from the parent companies in China. The Indian companies acted as payment collectors for multiple mobile applications which were banned from the Google Play Store for malpractices, as alleged. “Download links of such banned apps can be shared through any online messaging platform,” said an agency official.

The agency, during its probe, alleges to have found that those behind the scam used various payment gateways for receiving domestic revenues and for carrying out international “hawala” transactions. Following a trail involving ₹263 crore, the ED found that ₹106 crore was sent to Singapore and ₹100 crore to Hong Kong using multiple shell companies, on the basis of “bogus” airway bills and fabricated invoices showing import of cloud CCTV storage rental services. About ₹57 crore was routed through a cryptocurrency exchange.

The agency also zeroed in on five domestic entities that had opened accounts with a public sector bank’s Mumbai branch. Subsequent investigations led to the detection of 49 more accounts with a private bank and overseas transfer of about ₹723 crore. Another account with a Korean bank’s Gurugram branch was used to send ₹42 crore.

Based on the findings, the ED has so far made several arrests, including that of Chinese national Yan Hao, crypto trader Naisar Shailesh Kothari, an Indian director named Dhiraj Sarkar and Deepak Nayyar.

Following Mr. Nayyar’s arrest in May, the agency had alleged that the funds were laundered to Hong Kong through select branches of the State Bank of India and the State Bank of Mauritius in Mumbai. Earlier, a chartered accountant, Ravi Kumar, was also arrested in the case, in which assets worth ₹45 crore have been seized so far.