ED Investigating Transactions Worth Rs.4,000 Crore in Online Gaming Fraud Cases

The Enforcement Directorate (ED) is probing several cases of online gaming fraud involving transactions with an estimated worth of ?4,000 crores. The cases include those against companies run by China-based entities through dummy Indian directors.

The agency is investigating the money trail of 1,815 suspect accounts in the case involving Chinese firms. ED alleges that the two organizations named Linkyun Technology Private Limited and Dokypay Technology Private Limited, are engaged in duping users of a total sum of ?1,146 crores.

According to the ED, the starting capital in these organizations was brought in the form of foreign direct investment (FDI) from Chinese parent firms. The Indian firms acted as a front and payment collectors for multiple apps that were banned from the Google Play Store for indulging in malpractices.

The agency alleged that the responsible parties behind the scam carried out international “hawala” transactions by using various payment gateways for receiving domestic revenues. Following a trail of ?263 crores, the ED found out that ?106 crores were delivered to Singapore and ?100 crores were sent to accounts in Hong Kong.

The transactions were conducted using multiple shell companies on the pretext of fabricated invoices showing cloud CCTV storage rental services import and ‘bogus’ airway bills. An estimated ?57 crores were also routed through a cryptocurrency exchange.

Based on the findings during the investigation, the ED has made many arrests, including a Chinese national Yan Hao, crypto trader Naisar Shailesh Kothari, and Indians Dhiraj Sarkar and Deepak Nayyar.

The ED has also frozen ?68.53 crores worth of assets in a probe against Coda Payments India Private Limited (CPIPL) and “Garena Free Fire” mobile game. The agency has alleged that the accused made unauthorized payment deductions against the sale of digital tokens.

The bureau has alleged that CPIPL had collected about ?2,850 crores and transferred ?2,265 crores abroad. The company facilitated collections from players of games like Garena Free Fire, Teen Patti Gold, Call of Duty, etc., for generating revenue for the web or the game developers.

The ED has seized or frozen assets worth more than ?51 crores, including Bitcoins, in another case involving E-nuggets gaming app.

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