INDIA. Mumbai: The Directorate of Enforcement (ED) carried out raids under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, in several cities, including Mumbai, in connection with the misuse of a “Chinese-controlled” investment app (HPZ token app) and other similar applications by various entities and froze Rs 29 crore, on Wednesday.
Besides Mumbai, the raids were conducted in Delhi, Gurgaon (Haryana), Bengaluru (Karnataka), Chennai, and Salem (Tamil Nadu), and an amount of Rs. 29.5 crores lying in various bank accounts and DEMAT accounts were frozen. The search operation also seized various incriminating documents and digital evidence. With the recent seizure, the total amount frozen, in this case, is now Rs. 86.5 crore, an official statement read.
The ED investigation revealed that two entities, namely “Lillian Technocab Pvt. Ltd.” and “Shigoo Technology Private Limited,” both operating from New Delhi, were involved in operating and collecting money from investors in the name of the HPZ token. These entities were linked to various Chinese-controlled companies.
One Bhupesh Arora, with others, had control over “Shigoo Technology Private Limited,” and he was indulged in operating unregistered gaming apps and websites in this company and other entities and was collecting money fraudulently from the unsuspecting public in the garb of these apps and websites.
It was also revealed that various other companies were indulging in receiving funds from the public on the pretext of operating multiple applications or websites for gaming, loans, and others. Some amounts were paid back to the investors, and the remainder was diverted to various individual and company accounts. At the same time, a part of the funds was syphoned off in the form of digital/virtual currencies.
Jilian Consultants India Pvt Ltd., Gurugram (Haryana), is also suspected of being involved in these frauds, according to the ED. Jillian Consultants is a wholly-owned subsidiary of Jilian Hong Kong Limited. Besides, a Hyderabad-based company named Husys Consulting Limited, listed on the stock exchanges, was also probed earlier.
The ED has identified the entities as Comein Network Technology, Mobicred Technology, Magic Data Technology, Baitu Technology, Aliyeye Network Technology India, Wecash Technology, Larting Private Limited, Magic Bird Technology, and Acepearl Services Private Limited.
The agency also found that Comein Network Technology and others, in service agreements with various non-banking financial companies, were allegedly operating multiple suspicious online loans and other apps, such as Cashhome, Cashmart, and Easyloan, and receiving funds from the public.
The instant case was recorded based on an FIR registered by the Cyber Crime Police Station, Kohima (Nagaland), against HPZ token and others in October 2021. The complaint was filed by three individuals (two local Naga women and a non-Naga man). The Nagaland police had formed a five-member Special Investigation Team.
The HPZ Token was an app-based token that promised users high returns against ‘investment’ in mining machines for Bitcoin and other cryptocurrencies. After the victims got their initial profits, they were asked to bring in more investors to get more incentives apart from their investments by downline commission. The mode of payment was through an app downloaded from the HPZ website in the form of virtual payment addresses/UPI.
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