The Enforcement Directorate (ED) on Friday said it has detected and freezed Rs 46.67 crore kept in various bank accounts and virtual accounts of Easebuzz, Razorpay, Cashfree and Paytm following raids in connection with the Chinese loan app case. The ED conducted the raids on Wednesday.
The ED has carried out search operations under the Prevention of Money Laundering Act (PMLA), 2002, (on September 14, 2022) at six business/ residential premises in Delhi, Ghaziabad, Mumbai, Lucknow, Gaya and 16 other premises of Banks/Payment Gateways branches/offices in Delhi, Gurgaon, Mumbai, Pune, Chennai, Hyderabad, Jaipur, Jodhpur and Bangalore in respect of an investigation related to the app-based token named HPZ and related entities.
The agency initiated the money laundering investigation on the basis of an FIR bearing dated October 8, 2021, filed under various sections of IPC by Cyber Crime Police Station, Kohima, Nagaland.
A Razorpay spokesperson said, “With regards to the ongoing investigation against a few suspicious entities who conducted illegal business through multiple payment gateways/banks about 1.5 years ago, we proactively blocked all those suspicious entities and funds associated with them, and have shared their details with authorities. None of the funds which have been directed to be frozen by the authorities belong to Razorpay.”
The spokesperson added that as mentioned earlier, Razorpay will continue to provide necessary information to authorities to assist in this investigation. “We would like to reiterate that all our operations and on-boarding processes adhere to the highest standards of governance & regulatory guidelines.”
The ED said, “The HPZ Token was an app-based token that promised users of large gains against investment by investing in mining machines for Bitcoin and other cryptocurrencies. The modus operandi of the fraudsters was to first lure the victims to invest in the company on the pretext of doubling their investment through the app HPZ Token.”
It added that payments were received from users through UPIs and other various payment gateways/nodal accounts/individuals. Part amount was paid back to the investors and the remaining amount was diverted to various individual and company accounts through various Payment gateways/ banks from where partly it was siphoned off in digital/virtual currencies. After that, the fraudsters stopped the payments and the website became inaccessible.
A Cashfree Payments’ spokesperson said in a statement, “We continue to extend our diligent co-operation to the ED operations. We were able to provide the required and necessary information within a few hours on the day of enquiry. The operations and on-boarding processes of Cashfree Payments are fully compliant with existing regulations.”
An EaseBuzz spokesperson said, “We, at Easebuzz, would like to clarify that none of the parties mentioned in the ED’s statement belonged to our merchant base. The mentioned entities by authorities were only the counterparties of the merchant, who was using our payment gateway and this merchant had been proactively identified and blocked by us much before the investigation had started, as per our internal risk and compliance process. We intend to fully co-operate with the investigation authorities, as we are committed to ensure that our business operations comply with the existing regulations.”
Investigation revealed that the HPZ token was operated by Lillion Technocab Private Ltd and Shigoo Technology Private Limited. Shigoo Technology Private Limited was also found linked to various Chinese-controlled companies. It was also revealed that various other companies were indulged in receiving funds from public on pretext of operating various Apps/Websites for gaming/loan/others. ED suspected involvement of Jilian Consultants India Pvt Ltd, Gurugram behind various companies involved in these frauds.
One such entity, Mad-Elephant Network Technology Private Limited, in agreement with X10 Financial Services Limited was operating various loan apps (Yo-Yo cash, Tufan Rupees, Coco cash etc.). Similarly, Su Hui Technology Private Limited, in agreement with Nimisha Finance India Private Limited had operated loan apps.
During the search, various incriminating documents have been recovered and seized. Huge balances were found to be maintained in the virtual accounts of the involved entities with payment aggregators. A total of Rs 33.36 crore was found with Easebuzz Private Limited, Pune; Rs 8.21 crore with Razorpay Software Private Limited, Bangalore; Rs 1.28 crore with Cashfree Payments India Private Limited, Bangalore; and Rs 1.11 crore with Paytm Payments Services Limited, New Delhi. The total amount of around Rs 46.67 crore was detected and freezed in various bank accounts and virtual accounts.
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