In a mega crackdown by the Enforcement Directorate, six premises of instant loan apps in Bengaluru including Cashfree Payments, Paytm Payments Services Ltd, and Razorpay Pvt Ltd were raided after more than 18 FIRs were filed at the Cyber Crime Police Station in the city citing money laundering cases. The police have nabbed persons involved in these entities that apparently used dummy accounts of Chinese disguised as Indians to provide small amounts as loans to the loan availers and generate huge proceeds of the crime.
ED cracks down on instant loan apps in Bengaluru
After the FIRs were filed, the ED swung into action against multiple entities and persons who were reported to be involved in extortion and harassment of users who took small amounts as loans. Apparently, the ED found out that these entities were controlled by Chinese nationals who faked their documents and used dummy directors to further con the act.
The ED raided six premises spread in Bengaluru that were running illegal businesses by using several merchant IDs from banks and payment gateways. Some of the offices that were raided are Cashfree Payments, Razorpay Pvt Ltd, Paytm Payment Services Ltd, and others headed by Chinese nationals. Moreover, the information fed to the Ministry of Current Affairs (MCA) was fake as well.
According to the modus operandi, these entities used several merchant IDs linked to banks in order to swindle huge amounts that they would release as loans to the loan availers. The proceeds of the business would then go towards these Chinese nationals. In fact, the ED seized Rs 17 crore from these merchant Ids and bank accounts which have been frozen as well.
A similar modus operandi was spotted with Xiaomi which allegedly involved itself in extortion thereby using fake Indian directors as a cover for their Chinese directors who eventually left the country and were caught. ZTE was involved in similar tricks where it agreed that the books were cooked to show losses, however, the smartphone maker reportedly got profits of 30% on the important products.
The ED has been following such instances for a few years now. It was only recently that the Delhi Police closed 100 such loan apps that were leaked to Chinese nationals and 22 people were arrested and involved in the extortion business.