Chinese hawala: Karnataka police bust big scam

Bengaluru, June 13: Karnataka police on Saturday arrested two Chinese nationals and seven others when bust a scam of over ₹ 290 crore that involved duping people through a mobile app after promising attractive interest on investment.

The scam, aided by shell companies, is linked to money laundering and the suspected kingpin is a Kerala-based businessman with proximity to Chinese "hawala" operators, they said.

Cyber Crime Division of Crime Investigation Department (CID) said it has arrested the accused - two Chinese nationals, two Tibetans and five others who acted as directors of the companies involved - and a search is on for the rest.

A complaint from Razorpay Software Private Limited said the accused availed "payment solutions" from them, claiming that they are in gaming, social and e-commerce businesses.

They, however, defrauded the company by using computer resources and by deviating from their original, registered line of business, the complaint said.

They started routing their transactions to collect payments from a different business named "Powerbank" - an app listed in Google Playstore, the cyber police said in a release.

Through customer complaints, the complainant company got to know that public invested money in the "Powerbank" app to earn interest on the invested amount.

The accused persons, after accepting the investments, neither gave the agreed interest nor the principal amount and cheated customers.

A case has been registered under the Information Technology Act and Indian Penal Code for "cheating", the police said and added that the investigating team have arrested nine men.
During investigation, it was found that Anas Ahmed, a Kerala-based businessman, is the main person involved.

"We have also identified that he has very proximate connections with the Chinese hawala operators, which has come to light during the course of the investigation.
"He had opened shell companies in the name of Bull Finch Technologies, H&S ventures and Clifford ventures to route the fraud money. Anas Ahamed is married to a Chinese national and incidentally he had studied in China," the police said in the release.

Online applications hosted by him were later camouflaged and converted into different apps including Power Bank application, seeking investment from the public and promising good returns, they said.

An unusual spike was seen in investments on the day Anees Ahmed announced much higher returns. Subsequently, such apps were removed from Google Playstore and other websites and he fled with the money.

Investigation showed ₹ 290 crore inflow into his bank accounts and the police were successful in freezing a significant portion of it. There was a huge spike in opening of shell companies since November 2020.

"We have also observed that the Chinese handlers are in possession of a huge number of shell companies and bank accounts. Lured by the offer of the Chinese nationals, many innocent Indians and Tibetans have fallen in their trap to open shell companies and open bank accounts for them," they said.