It seemed like a regular case of cheating when two persons approached the cyber crime wing of the Hyderabad police earlier this month, complaining of losing Rs 97,000 and Rs 1.64 lakh respectively to a website dealing with online gaming — which is banned in Telangana. But investigations into the complaints have unearthed a larger conspiracy involving Chinese nationals and resulted in the recovery of Rs 30 crore from two bank accounts in Gurugram.
Now, Cyber Crime officials are terming this an unprecedented case, for multiple reasons.
On August 14, Hyderabad City Police Commissioner Anjani Kumar announced that the total value of the inward transaction on the two accounts traced so far was nearly Rs 1100 crore, most of it in 2020, transferred to different other accounts that are now being traced. The total overseas remittances add up to nearly Rs 110 crore, he said, adding that the group was planning to register a company in the Cayman Islands.
Both the HSBC Bank accounts have been operational since 2019. When cybercrime officials initiated the process to freeze these bank accounts, the first one had a balance of around Rs 14 crore and showed around Rs 500 crore inward transactions in its statements. The second had a balance of Rs 16 crore with around Rs 600 crore inward transactions. “This was huge and does not usually happen in cybercrime cases,” an official said.
Investigations have now unearthed over 15 such bank accounts, from which another Rs 20 crore was recovered, as of August 19, said the police. The electronic devices seized from them, which has provided the police with certain conversations, are also being examined. With police suspecting money laundering activities, the Enforcement Directorate has stepped in, even as the criminal investigation continues.
Four people have been arrested in the case. Yah Hao, a Chinese national, was apprehended from IGI Airport in Delhi when he was scheduled to board a plane to Europe. Three others — Dheeraj Sarkar of Gurugram, and Ankit Kapoor and Neeraj Tuli of Delhi — have also been arrested.
The Colour Prediction Game
According to the police, the people are lured into online gaming via Telegram. New players could join only with a reference and referring a certain number of players into the group entitles a certain commission, too. According to the police commissioner, the group admins usually indicate the websites the registered members can play games and place bets at. These websites would be changed daily. In the specific case, the police said, players were required to place their bets on colours and their combinations — a Colour Prediction Game.
An official told indianexpress.com they stumbled upon over 500 such websites as of August 17 — most have domain names registered in China. “These websites masquerade as e-commerce websites selling shoes, clothes, etc. All of them have a similar interface and are operated out of China, Taiwan, etc. These websites will have a link in one corner which takes one to the actual betting site. While betting continues to remain banned, these sites were not banned.”
The illegal gambling activity using websites, police suspect, picked pace during the months of COVID-19 induced lockdown. The initial chances of winning the bets are around 7:3, and the punter wins in multiples of Rs 10. As the game progresses, the win probability reverses to 3:7, the two complainants had informed the police. The officials have found that the money generated from the betting operations via these websites are transferred to the bank accounts which have now been frozen.
The bank accounts and payment gateways were found linked to companies named Linkyun Technology Pvt Ltd, Dokypay Technology Pvt Ltd, and SpotPay Technology India Pvt Ltd. Police also found other companies with the same set of directors, shareholders, etc. These companies are Growing Infotech Pvt Ltd, Sily Consulting Services Pvt Ltd, Pan Yun Technology Services, Daisylink Financial Pvt Ltd, and Huahuo Financial Pvt Ltd, all registered with the Registrar of Companies since 2019 and claiming to deal in computer technology and services. Police suspect a pool of dummy companies helped them move operations around to evade the attention of law enforcement agencies.
According to the police commissioner, “The entire technical operation is run by the China-based directors and partners of these companies. The payments were being routed through India-based payment service providers and gateways. In this case, it was presently PayTM and Cash Free. It is understood from the investigation so far that the companies are controlled through a firm called Beijing T Power Company.”
A young English-speaking Chinese man
Yah Hao, in his late-20s, has traveled to India two to three times in the last two years. Since January 2020, he has been stationed in Delhi and was overseeing the online gambling activities, the probe found. Hao speaks fluent English and graduated college in 2017-18. He holds a valid passport and VISA, and there is no record of his involvement in any offence in the past, so far, said the police.
From him, Police learned that China-based Beijing T Power company has operations in Pakistan, Saudi Arabia, apart from south-east Asian countries like Malaysia, Singapore, Vietnam, Indonesia, etc. Hao is the head of operations for South-East Asia and claims his employer is a mere payment aggregator.
But to one straight question on who his clients are, investigators point out, Hao has no answer. He claims he was sent to India in January as a substitute to the then head of India operations of the company. Hao is learned to have told the police to visit China along with him to proceed with their investigation if they cared.
“He had been trying to leave the country but could not because of the suspension of international travel owing to COVID-19 lockdown. Three or four Chinese nationals were set to return during this period. They, too, could not return due to the same reason. Now, there is no way they are going to return,” a senior official said.
When the team of officials camped in Delhi for a week, following the leads to the accused directors of these companies, one of them turned out to be a grocery store owner. “He claims no knowledge of the company he is linked to. He says he just signed some documents which his neighbour who is a chartered accountant asked him to.”
The police could not find the CA at his residence and are examining the details provided by the grocer who has been asked to join investigations. The grocer’s statement has also opened possibilities of illegal use of people’s identities for registering companies. The police have also filed for the custody of all accused persons for further questioning.
According to the police, the arrested persons have not yet opened up regarding who their clients are or what the nature of their business is. “It is all in loops and loops. There is an element of their involvement in renaming recently banned Chinese apps, for example, ‘SHAREit’, and putting it out for people to use,” a police official involved said, adding that they are also looking at if the accounts were used for routing money from phishing scams. The Ministry of External Affairs and the Foreigners Regional Registration Office(FRRO) has also been informed of the arrests.
The police commissioner, during the press conference, had said that there were nearly 28 similar complaints from different states regarding the gambling activity. Several more have reached out to the Police after the bust of the racket and arrest of four persons including a Chinese national. Police are also trying to get details of how many people have participated in online betting via these websites.
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