The Hyderabad police on Saturday, July 22, busted a Rs 712 crore investment fraud by Dubai-based Chinese operators and arrested nine people in the case. The Cyber Crimes Unit that busted the racket also seized 17 mobile phones, two laptops, 22 sim cards, four debit cards, documents pertaining to 33 companies, passports, and a few currency notes. The police believe that the gang cheated gullible investors in the country to the tune of Rs 712 crore and routed this money to China through Dubai in the form of crypto currency.
According to Hyderabad Police Commissioner CV Anand, it was found during the investigation that a portion of the amount also got transferred to a crypto wallet used by a terror outfit. The police chief said since there was a need for a thorough probe with coordination at the national level, the case would be brought to the notice of the Union government.
The arrested persons are Prakash Mulchandbhai Prajapati, Kumar Prajapati, Naimuddin Wahiduddin Shaik, Gagan Kumar Soni, Parveez alias Guddu, Shameer Khan, Mohammed Munawar, Shah Sumair, and Arul Dass. The Commissioner said the accused — who are from Mumbai, Lucknow, Gujarat, and Hyderabad — are suspected to have links with scammers from Dubai and China. He also said some Chinese nationals were the masterminds who were running this system of task-based investment frauds by sending messages over Telegram.
During the press meet on Saturday, the Commissioner said the investigation was launched after a Hyderabad resident lodged a complaint with the Cyber Crime Police alleging that he had lost Rs 28 lakh to the fraudsters. The scammers pulled this off by approaching the complainant via the Telegram app and offering him a part-time “Rate and Review” job. Assuming the offer was legitimate, he registered on their website https://www.traveling-boost-99.com. At first, he was given straightforward instructions. He had to load/invest a smaller sum of Rs 1,000, which allowed him to rate one set of five tasks and win money back. He made a profit of Rs 866 by doing this.
Every time the victim loads/invests money in this manner, the amount invested would be shown in a window similar to an online wallet. This wallet will have options to invest, withdraw, perform tasks, etc. Next time he was given four sets of 30 tasks each to be rated, for which the victim needed to load the wallet with money first.
While dealing with the first of these four sets, he loaded the wallet with Rs 25,000 and earned a profit of Rs 20,000 on the website. However, he was not allowed to withdraw the profit. When questioned, he was told that he has to complete all four sets of tasks to get the money. For the subsequent sets, the victim loaded more money into the wallet. When he later requested to withdraw his profits, he was asked to pay 17 lakh as a withdrawal fee. The victim lost Rs 28 lakh in total.
The police discovered that this money had been transferred to six accounts, one of which was maintained under the name of Radhika Marketing and managed by Munawar from Hyderabad. From there, it was moved to several other Indian bank accounts, and finally to Dubai, where the fraudulent funds were used to buy cryptocurrency.
In a significant breakthrough,the cyber crime wing of @hydcitypolice busted a transnational gang which cheated 15,000 people to the tune of Rs 712 crore. Fraudsters lured gullible investors through fake investment apps, schemes & laundered money to China via Dubai after… pic.twitter.com/FuA3hA0Xl3
— CV Anand IPS (@CVAnandIPS) July 22, 2023
33 shell companies, several bank accounts
It was revealed during the investigation that Munawar along with Arul Dass, Shah Sumair, and Shamir Khan went to Lucknow on the instructions of Manish, Vikas, and Rajesh — all of whom reside in Lucknow — to open bank accounts in the names of fictitious businesses in exchange for an offer of Rs 2 lakh per account. They opened 33 shell companies and 61 accounts in the name of companies and handed over the same to Manish.
Manish had hired Gagan for the web designing of the companies and Nayeem to coordinate with the account holders. After opening the accounts, he sold them to Kumar Prajapati, an associate of Prakash Prajapati.
According to the police, Prakash Prajapathi is a resident of Ahmedabad and is associated with Chinese handlers Lee Lou Guangzhou, Nan Ye, and Kevin Jun. He was coordinating with the Chinese to supply Indian bank accounts and providing them with the one-time passwords for operating these accounts from Dubai/China through remote access apps.
“We found that Prakash Prajapathi is using a Tron coin wallet address so he can get his commissions in USDT or TRON. These crypto wallet transactions in his wallet have crypto transfers to another wallet address, which in turn has been found to have transaction linkages with two other crypto wallets including the Hezbollah wallet (labelled as a wallet belonging to Terror Financing Module),” said the police officer.
The defrauded money was credited to Primary Shell/Mule bank accounts being supplied by Prakash Prajapati, layered to some secondary bank accounts to hide the proceeds of crime. Finally it was sent to the Chinese. For every fraudulent transaction in these accounts, Prakash Prajapati was paid 2-3 percent commission.