The Enforcement Directorate has frozen about ₹123 crore, kept in the bank accounts of NIUM India Private Limited allegedly on behalf of Singapore-based shell entities, in connection with a case involving illegal online loans, gambling, and betting apps.
The action has been taken following searches at 10 locations in Mumbai, Chennai, and Cochin last week. The agency suspects that the frozen amount is part of the proceeds of alleged crime.
The premises of NIUM India Private Limited and its Mumbai-based directors; Xoduz Solution Private Limited, Vikrah Trading Enterprises, Tyrannus Technology, Future Vision Media Solutions, and Aprikiwi Solution in Chennai; and one Raphael James Rozario in Cochin were covered during the searches, said the agency on Wednesday.
The ED’s probe under the Prevention of Money Laundering Act is based on the criminal cases registered by the police in Haryana and Kerala based on complaints alleging that they were harassed and cheated through online (loan/gambling/betting) platforms being controlled by “Chinese entities”.
“The ED investigation revealed that proceeds of crime generated from the above apps/other platforms, are aggregated and laundered through mule accounts opened in various banks in Kerala using payment aggregators,” said the agency. It said the funds collected and layered through multiple shell companies in Chennai, Bengaluru, Delhi, Mumbai and other places were finally being remitted outside India via different channels such as cryptocurrency, against fake imports of software from Singapore, forex currency purchases, etc.
According to the ED, the accused had floated many shell entities in India and used them to divert the funds to the shell companies floated in Singapore. “These Singapore shell entities would raise fake invoices for supply of software/other services in the name of the shell Indian entities in India where the PoC [proceeds of crime] would have already been aggregated,” it said.
The agency alleged that the invoices were shared by the global forex settlement platform named NIUM Singapore Pte Limited (Singapore), which has NIUM India as local subsidiary for money collection from Indian entities and transfer to NIUM Singapore on the pretext of payment for technical services. Such funds would be credited in the virtual wallet of Singapore shell entities, it said.
Except for the fake invoice, no other documentation was allegedly collected by NIUM India from the remitters. “In this manner, the shell remitter, the shell remittee and the sham import transactions were concealed from the bank and monitoring agencies, and the proceeds of crime thereby laundered out of India,” the ED said, adding that about Rs.123 crore as suspected proceeds of crime had been frozen.
