HYDERABAD: The Enforcement Directorate (ED) has carried out searches against Chinese-controlled lending apps in 16 locations, including Hyderabad, under the Prevention of Money Laundering Act (PMLA), and seized funds worth Rs 46 crore parked in several payment gateways and banks.
ED investigators raided payment gateways in Hyderabad, Bengaluru, Chennai, New Delhi, Pune, Gurugram, and other locations as part of an investigation into an app-based token called HPZ and related entities.
ED raids revealed that the HPZ Token was an app-based token that offered investors significant returns on their investments by purchasing Bitcoin and other cryptocurrency mining equipment. The scammers' tactic was to first convince their victims to invest in the business under the promise of doubling their money using the HPZ Token app.
Payments were received from users through UPIs and other payment gateways/nodal accounts/individuals. The modus operandi was that a portion of the money was paid to the investors and the remainder was redirected to various individual and business accounts through payment gateways and banks, where a portion of it was siphoned off in digital/virtual currencies. Following that, the fraudsters stopped making payments, and the website was rendered inaccessible.
The HPZ token was run by Lillion Technocab Private Ltd and Shigoo Technology Private Limited, according to ED investigations. Shigoo Technology Private Limited was also found to be associated with a number of Chinese-controlled businesses.
During the investigation, it was found that various businesses were accepting funds from the public on the pretext of running different apps and websites for lending, gaming, and other purposes.
Further, ED probe found involvement of Jilian Consultants India Pvt Ltd, Gurugram behind various companies involved in these frauds. Mad-Elephant Network Technology Private Limited, one of these businesses, was managing several lending applications through a partnership with X10 Financial Services Limited (YoYo cash, Tufan Rupees, Coco cash).
Similarly, Su Hui Technology Private Limited, in agreement with Nimisha Finance India Private Limited, was operating loan apps. Various documents were confiscated during ED search operations, and about `46.67 crore was found and frozen in different bank accounts and virtual accounts.
The Big Token Fraud
- HPZ Token promised customers significant returns on their investments by investing in Bitcoin and other cryptocurrency mining machines.
- Fraudsters first convince their victims to invest under the promise of doubling their money via the app HPZ Token.
- Users' payments were taken in through UPIs and other payment channels.
- A portion of the money was returned to investors
- The remainder was sent via payment gateways and banks to various individual and business accounts.
- A part of the money was siphoned off using virtual or digital currency.
- The website was rendered inaccessible after fraudsters ceased making payments.