Hyderabad police bust Rs 900 crore online fraud through Chinese app, could run into thousands of crores

The Hyderabad police has busted a Rs 900 crore online Chinese investment fraud across India, China, Taiwan, Cambodia and UAE. As many as 10 people including a Chinese and a Taiwanese national have been arrested in the case.

Police suspect that this could merely be the tip of the iceberg and the fraud could run into thousands of crores with investors in Delhi and Mumbai also having been cheated.

The complaint in the case was filed by a Hyderabad resident in July who said he was cheated of Rs 1.6 lakh after he put his money in an investment app called LOXAM. The police traced his money to the account of Xindai Technologies Pvt Ltd in IndusInd Bank.

The modus operandi involved online investment apps to lure investors. The money was put into virtual accounts and passed through authorised money change and foreign exchange companies.

Hyderabad Police Commissioner CV Anand said that money changers licensed by the RBI to deal in foreign exchange were involved in the scam as well.

“We suspect there would be lakhs of investors across the country who may have been defrauded. Just in Delhi, Rs 10,000 crore fraud may have happened. The amount could run into thousands of crores. What we have found is evidence of Rs  903 crore moved out illegally,” Hyderabad police commissioner CV Anand said.

Chinese national Lec alias Li Zhongjun and Taiwanese national Chu Chun-yu have been arrested along with eight others for running the hawala scam from Delhi and Mumbai.

The man who opened the Xindai account was Virender Singh, who was arrested from Pune. He claimed that he had opened the account on the orders of a Chinese national whom he identified as Jack, for a 1.2 lakh commission, the police said.

Another account, in the name of Betench Networks Pvt Ltd, was found linked to Xindai. It was  opened by Delhi resident Sanjay Kumar, on the instruction of the Chinese national. Altogether, he opened 15 accounts — each for a  Rs 1.2 lakh commission — and shared their details with Taiwanese national Chu Chun-Yu.

From Xindai Technologies, money was transferred to 38 bank accounts and finally landed with authorised money change firms Ranjan Money Corp and KDS Forex Pvt Ltd, owned by Naveen Kaushik. He sent the money to forex exchanges, converted rupees to dollars and had the money spent abroad through hawala operators.

The Hyderabad police said they would write to the Enforcement Directorate and other Central agencies to take the investigation forward.