SUMMARY
The agency has so far frozen around 80 bank accounts, belonging to various accused
Residential and official premises linked to fintech majors such as PhonePe, Paytm, Google Pay, Amazon Pay and banks such as HDFC Bank and ICICI Bank raided
So far, 50 persons have been named as accused in the chargesheet, including two Chinese nationals
As part of its ongoing crackdown, the Enforcement Directorate conducted searches at the residential premises and offices linked to fintech majors PhonePe, Google Pay and Paytm in connection with a digital part-time job scam involving Chinese nationals.
In total, the ED swooped on as many as 16 locations across Bengaluru and froze INR 1 Cr parked in 80 bank accounts belonging to various accused.
The search operations were conducted across two days (November 14 and November 15) under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The ED officials also landed at the residential and official premises linked to other fintech players such as Google Pay, Amazon Pay, among others.
Offices of banks such as HDFC Bank, ICICI Bank, Dhanalakshmi Bank, among others, were also searched as part of the crackdown.
Further probe into the matter is currently underway.
“As a part of ED’s investigation connected with some third party online applications, the ED conducted a routine search and were looking for information related to bank accounts linked with a few Virtual Payment Address (VPAs ) associated with the PhonePe app. Details of the bank accounts linked with these VPAs were duly provided to them promptly,” said a PhonePe spokesperson.
PhonePe also added, “Most of the VPAs linked to PhonePe were already in blocked / blacklisted status for the past year, thanks to PhonePe’s robust fraud prevention and real time tech enabled monitoring systems. Please note that these were customer peer-to-peer transactions directly between bank accounts of customers, and PhonePe was not in the path of the money transfer and no bank account of PhonePe was involved in the money transfers.”
Inc42 has reached out to Paytm for a comment. The story will be updated on receiving a response.
Describing the modus operandi of the ‘Super Like Online Earning App’, the ED said that many users were offered money in lieu of performing simple tasks such as liking and sharing the posts of celebrities.
Subsequently, many users invested their own money to access ‘VIP’ memberships which allowed users to fulfil more tasks and earn more. While many users received some profit at the outset, eventually, the payments failed to come through despite victims completing their tasks.
The users, who tried to withdraw the invested money back, would then lose access to the services on the app.
“Thus, by cheating the common public, the accused persons collected huge amounts of funds from the common public and didn’t return their money, criminal activities related to the scheduled offence were committed,” added the ED.
The ED probe was initiated on the basis of a first information report (FIR) filed in Bengaluru in 2021. Subsequently, a charge sheet was also filed before a local court, naming 50 persons as accused, including two Chinese nationals.
This is part of an overarching crackdown by the agency on digital scam operators, especially those involving Chinese nationals. These apps have largely been involved in alleged money laundering offering fraudulent products such as digital loans, high returns on crypto investments, among others.
Last month, the ED conducted fresh searches in connection with a fraudulent gaming app E-nuggets and froze INR 1.65 Cr in cash and INR 7.12 Cr worth of Bitcoins as part of the investigation.
In October, Hyderabad Police unearthed an alleged INR 903 Cr money laundering fraud involving a China-based illegal investment app. The menace of digital loan sharks continues to make headlines and has claimed the lives of many.
Meanwhile, authorities continue to warn the general public against such apps, urging them to do due diligence before subscribing to such apps. In addition, many Chinese entities have also been raided across the country on apprehensions of operating unauthorised businesses and laundering money.
Despite action, there appears to be no let down in such cases. While the government chalks out a stringent regulatory framework, unauthorised firms continue to operate unabated under the cover of lax enforcement.
