More than half a million Indians have been cheated of over ₹150 crore in two months by a nationwide fraud syndicate operated by Chinese nationals in connivance with Indian fraudsters, who were offering lucrative returns on an online multi-level marketing (MLM) campaign through their two “malicious mobile applications” Power Bank and EZPlan , the Delhi Police said on Wednesday.
Eleven people, including a Tibetan woman and two chartered accountants (CAs) based in Delhi and Gurugram, were arrested following multiple raids in Delhi-NCR and West Bengal since June 2. The footprints of the syndicate were confirmed in West Bengal, Delhi-NCR, Bengaluru, Odisha, Assam, and Surat, the police said.
Nearly ₹11 crore of cheated money was blocked in various bank accounts and online payment gateways that were being operated by the members of the syndicate based in India as well as China. Around ₹97 lakh was recovered from one of the arrested CAs, Avik Kedia, who formed over 110 “shell companies” for Chinese fraudsters to route the money through multiple bank accounts, deputy commissioner of police (cyber crime cell, CyPAD) Anyesh Roy said.
DCP Roy said CyPAD officials recently came across several social media posts made by people across the country regarding two mobile apps – “Power Bank and ExPlan” – that offered to double the invested amount in 24-35 days. The apps also offered returns on an hourly and daily basis and had investment options starting from ₹300 to several lakhs.
The Power Bank app was available on Google Play Store and trending at No 4. The EZPlan app was available on the website www.ezplan.in. DCP Roy said that since the messages were inducing the recipient to download an app through a short (encrypted) URL, the activity was identified as suspicious and the malware forensic lab of CyPAD-NCFL was asked to examine both the apps.
“When analysed, CyPAD officials found that to deceive people, the Power Bank app projected itself as a product of a Bengaluru-based technology start-up. However, the server on which the app was hosted was found to be based in China. The app is associated with several dangerous permissions such as access to camera, read and write to external storage and to read contact details of the cellphone,” said DCP Roy.
Investigators analysed the modus operandi of the two apps and found that to entice investors, initially the fraudsters gave a small payout amounting to 5-10% of the invested money. People, believing the scheme to be genuine, started investing more money as well as circulating and sharing the apps with their friends and relatives. Once someone had invested a large amount, their account was blocked by the app, thus causing severe financial loss, said the police.
To identify and nab the people behind the scam, a CyPAd officer became a decoy customer, invested a token amount using the app and followed the money trail. The linked payment gateways, UPI IDs, transaction IDs, bank accounts that were used for routing the money were identified and analysed. A web of nearly 25 shell companies for routing the fraud money was traced across the country and it pointed to the involvement of professional accountants. Several mobile phone numbers connected with the bank accounts and involved in the scam were found to have Chinese origins, said DCP Roy.
“Further analysis of mobile numbers active in India led to the arrest of Sheikh Robin in West Bengal’s Uluberia on June 2. The same day, nine other suspects were arrested, while a Tibetan woman, Pema Wangmo, was arrested later from Delhi’s IGI Airport, following inputs from the Bengaluru Police that is also probing a similar cheating module. She was acting on behest of the Chinese and creating shell companies with Indian directors,” added Roy.
The other arrested persons were identified as Avik Kedia and Ronak Bansal, both CAs, Umakant Akash Joys, Ved Chandra, Hari Om, Abhishek Mansaramani, Arvind , Shashi Bansal and Mithlesh Sharma. At the time of his arrest, Robin had 29 bank accounts and 30 active cellphones. His disclosure revealed a startlingly well-planned conspiracy of cheating and fraud being organized by Chinese nationals through a labyrinth of shell companies, bank accounts, and dummy mobile numbers, the DCP said.
“The Chinese fraudsters contacted Robin and others through encrypted mobile apps such as Telegram, Dingtalk and WeChat. The Chinese fraudsters and their local operatives also used sophisticated software and financial tools for automated fund transfer to manage the enormous scale of the fraud. Names of several Chinese nationals have been revealed so far. Investigation in respect of their whereabouts, specific roles and their large fraud network is underway,” added DCP Roy.