The Enforcement Directorate (ED) on Friday said it carried out search operations under the Prevention of Money Laundering Act (PMLA) on two days at 22 premises in Delhi, Ghaziabad, Mumbai, Lucknow, Gaya, including 16 premises of banks/ payment gateway branches and offices, in connection with an investigation into the app-based token named HPZ and related entities. Funds totalling to Rs 46.67 crore were detected and frozen in various bank and virtual accounts, the agency said.
The ED’s searches of the 16 premises of banks, branches and offices of payment gateways were in Delhi, Gurgaon, Mumbai, Pune, Chennai, Hyderabad, Jaipur, Jodhpur and Bangalore. The ED had initiated a money laundering investigation on the basis of an FIR registered on October 8, 2021, by the cybercrime police station in Kohima, Nagaland.
As per the agency, the app-based HPZ token promised users double gains for investment in mining machines for Bitcoin and other crypto currencies. Payments were received from users through UPIs and various payment gateways/ nodal accounts/ individuals.
While a part of the amount was paid back to the investors, the remaining was diverted to various individual and company accounts through payment gateways and banks. From here, the amount was partly siphoned off for digital/ virtual currencies. Thereafter, the fraudsters would stop the payments and the website became inaccessible.
As per the ED, the HPZ token was operated by M/s Lillion Technocab Private Ltd and M/s Shigoo Technology Private Limited, which also found to be linked to various Chinese-controlled companies. It has also been revealed that various other companies received funds from the public on the pretext of operating various apps/ websites for gaming/ loans, among other purposes. The ED suspected the involvement of M/s Jilian Consultants India Pvt Ltd, Gurugram, in various firms involved in these frauds.
One such entity, M/s 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 Pvt Ltd, in agreement with M/s Nimisha Finance India Pvt Ltd, had operated loan apps, the agency claimed.
As per an ED statement, “During the search, various incriminating documents were recovered and seized. Huge balances were found to be maintained in the virtual accounts of the involved entities with payment aggregators. Rs 33.36 crore was found with Easebuzz Pvt Ltd, Pune; Rs 8.21 crore with Razorpay Software Pvt Ltd, Bangalore; Rs 1.28 crore with Cashfree Payments India Pvt Ltd, Bangalore; and Rs 1.11 crore with Paytm Payments Services Ltd, New Delhi.”
Responding to the ED action, Paytm tweeted, “As mentioned in our exchange filing, the ED instructed us to freeze a certain amount from MIDs (merchant IDs) of specific entities and none of these funds belong to Paytm or our group companies.”
While Cashfree Payments said it’s fully cooperating with the ED operations, Easebuzz clarified that none of the parties mentioned in the ED’s statement belonged to their merchant base.
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