Chinese loan apps scam raids: ED seizes Rs 17 crore

NEW DELHI: The Enforcement Directorate on Saturday said it has seized Rs 17 crore held with several payment gateways during a search operation in a money laundering case. The initial probe revealed that these loan apps were registered with fake addresses and indulged in fraudulent activities, extortion and intimidation of people.
"During search operation, it is noticed that the said entities were generating proceeds of crime through various merchant accounts held with payment gateways. They were also not operating from the addresses given to the registrar of companies," the ED said.

Explaining the modus operandi, the ED claimed that these entities used forged documents of Indians and made them dummy directors in these firms, thus escaping the regulatory mechanism. It is obligatory on the payment gateways to check and verify their customers, including the addresses they had provided before allowing financial transactions on a large scale.
The ED's money laundering probe is based on 18 FIRs registered by the Cyber Police of Bengaluru that had booked several companies and people associated with them. These entities are accused of "extortion and harassment of the public," who had availed of small loans through mobile apps. "During enquiries, it has emerged that these entities are controlled and operated by Chinese nationals," the ED said.
Razorpay, in a statement, said, "With an intent to support authorities in gathering more evidence against the cybercrime, we have been extending our cooperation to authorities over the last 1.5 years and we will continue to do so. For further probe, the enforcement authorities reached out to us again requesting additional information on a few set of Chinese lenders, to which we promptly responded. We have cooperated and shared KYC and other details necessary for probe. The authorities were satisfied by our due diligence process."
The Paytm spokesperson said, "We are supporting law enforcement agencies, who are investigating a specific set of merchants. The authorities reached out to us with directions to provide certain information, these merchants under scrutiny, to which we responded. We continue to cooperate with the authorities and remain compliant."