Police Unearths INR 903 Cr Money Laundering Fraud Involving Chinese Investment App

The Hyderabad Police has reportedly busted an INR 903 Cr money laundering fraud involving a China-based illegal investment app.

The Police has arrested 10 people in the case so far, including a Chinese and a Taiwanese national, for duping users of hundreds of crores on the pretext of offering high returns. Law enforcement officials have also frozen proceeds worth INR 1.91 Cr lying in various bank accounts in connection with the probe. 

The crackdown came after a Hyderabad resident complained that he was defrauded of INR 1.6 Lakh by the same app. 

Describing the modus operandi of the hawala scheme, police officials told Deccan Herald that users were lured into investing in an investment app called LOXAM, promising high returns. Once the users invested their money, the app would become defunct, leaving many in the lurch. 

Money collected from gullible users was then funnelled to multiple Indian bank accounts, before being routed overseas through the hawala route. 

The scam largely operated out of Delhi and Mumbai, with some accused also operating out of Hyderabad. 

The case also brought to light the role of Indian nationals in enabling the foreign nationals flout local norms for a hefty cut. 

Many local residents also allegedly helped the foreign nationals in setting up multiple bank accounts and even handed out confidential banking details such as internet banking usernames and passwords to enable the fraudsters to transfer money into several dozen bank accounts. Some of the accused were paid as high as INR 1.2 Lakh per account. 

This way, reportedly, crores of rupees were wired out of the country by duping Indian customers.

Scamsters On The Prowl

This adds to a long line of money laundering frauds involving Chinese nationals. In the recent past, the government, the Reserve Bank of India (RBI) and enforcement agencies have launched a mega crackdown on illegal Chinese loan and investment apps.

While unauthorised Chinese loans apps have largely hogged the headlines for laundering money, the sheer size of the Hyderabad case has raised eyebrows. Earlier, the RBI specifically warned users against illegal loan sharks, asking them to do due diligence before availing loans online. 

The central bank has also taken a host of steps to ensure that only white-listed loan apps are available on major app marketplaces such as Google Play and Apple Store. 

The RBI has also gone after unauthorised forex exchanges, warning citizens against undertaking forex transactions on illegal electronic trading platforms. Earlier this month, it also issued an ‘Alert List’ highlighting entities not authorised to deal in forex exchanges. 

The country has witnessed a major spurt in digital frauds in recent times. With the increasing proliferation of the internet and emergence of new modes of finance online, these scamsters are on the prowl for users looking to make a quick buck. 

Many of these too-good-to-be-true schemes have duped users of crores of rupees. On Wednesday, a cloud mining crypto scam was unearthed in Maharashtra’s Solapur which defrauded 31 people. There is no dearth of incidents involving illegal Chinese lending apps that have resulted in suicides and harrasment.

From crypto to forex, a host of fraudsters have cropped up in different parts of the country. Despite successive crackdowns, these malicious players continue to operate, taking advantage of lax regulations and loopholes.

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