Since 2018, Indian authorities have arrested more than 10 Chinese men linked to the PLA Army.
Disturbingly, all of these men were operating online loan businessess through online apps in India. They pretended to be people of North-East origin. They even possessed Aadhar, PAN cards in their Indian identity. And they were running legitimate businesses in India registered under the Indian company laws.
During the unfortunate COVID-19 lockdown period, many people in India due to their own poor financial resources turned to easy online loans app to make it through their crisis period. Getting a loan from an online app was easier than going online or offline to a bank. People did not stop to think for a moment about the credibility of the loan company that they took the money from. It was only when the loan sharks started to come back for their money, charge high interest rates for delay of payments and resort to constant harassment that people realised about the hell they opted for.
People caught and interrogated by the Enforcement Directorate and other investigative authorities over the last four years throws a dark shadow on the real quantum of the Chinese online loan app scam. The arrests over the last four-years has unearthed a scam of over Rs 1000 crore but many in the ED and other investigation authorities believe that they scam could be over Rs 10000 crore. More will come to light as investigations move ahead.
Earlier this year a complaint was lodged at the IFSO unit of the Special Cell in New Delhi by a woman alleging that she was being abused and threatened by some unknown persons who were sending her morphed and vulgar photographs to her family, friends and relatives through social media.
The complainant had taken a loan from one Loan App, namely Cash Advance (Danakredit), she repaid the same in time. But after repaying the said amount she started getting threat calls and messages on WhatsApp from Cash Advance employees. It was further observed by the complainant that the alleged scamsters were using the profile picture of a highly ‘senior police officer’.
During the course of the investigations money trails of alleged transactions were established and it was found that the money was being transferred in a current account which had been opened in the name of Balaji Technology. Further it was found that the name of Balaji technology was used at a shop of motorcycle repair. The proprietor of the account was found in the name of Rohit Kumar, a resident of Rajeev Nagar, Delhi. It was further found that in the alleged account approximately Rs 8.45 crore were credited in just 15 days and the same was transferred to other accounts simultaneously.
During the interrogation of all the accused, it was found that if a needed person wanted to take some loan through the Apps available online, he had to download the said App first. At the time of downloading, the App asks for permission to capture, contact list, photo gallery and other personal data of the phone of the loan seeker.
As soon as the permission was granted by the loan seeker, all their data got transferred to the Chinese servers. Once this process was completed, the fraudsters immediately got the loan amount transferred in the account of the loan seeker. One team used to track such loan seekers and another would call the loan seekers and their associates like relative friends, etc., through different mobile numbers to refund the money from the loan seeker. Even after refunding of the money, the alleged accused used to extort more money from the loan seeker and also started sharing the morphed vulgar photos of the loan seeker to his family, relatives and friends to pressurise the victims to pay more money.
Last year, the Karnataka Cyber Crime Division of CID had busted Rs 290 crore Hawala racket and arrested 11 people including two Chinese, two Tibetan Nationals, and five people who were acting as Directors of the Shell companies.
Investigating police told GoaChronicle at that time that a criminal case was registered to vide CCPS Cr No 08/2021 u/s 66 (D) IT Act & 420 IPC. During the course of the investigation, it was found that Anas Ahmed, a Kerala-based businessman is the main person involved in this hawala & money laundering racket. We have also identified that he has very close connections with the Chinese hawala operators which have come to light during the course of the investigation. He had opened shell companies in the name of Bullfinch Technologies, H & S Ventures, and Clifford Ventures to route the money.
Anas Ahmed is married to a Chinese national Hu Xiolin and incidentally, he did his studies in China. Hu Xiolin holds a Chinese passport.
Police said that Online Rummy applications hosted by him were later camouflaged and converted into different applications like Power Bank Application, Sun Factory Application seeking investment from the public promising good returns. An unusual spike was seen in user investments on the day Anas Ahmed announced much higher returns. As per his plan, the apps from Google Playstore and other websites were removed and he absconded with the money.
During the investigation, it was found that a total of Rs 290 Crore inflow to his bank accounts. The Cyber Crime Division was successful in freezing a significant portion of money from the account.
It is also noted during the investigation that there is a huge spike in the opening of shell companies since November 2020.
Investigating officers state that they had also observed that the Chinese handlers are in possession of a huge number of shell companies and bank accounts. Lured by the offer of the Chinese nationals, many innocent Indians and Tibetans have fallen in their trap to open shell companies and open bank accounts for them.
In August 2020, Luo Sang was a suspect in a Rs 1000 crore hawala racket by the Enforcement Directorate (ED). He had assumed an Indian identity and ran five companies in India as director. He controlled most of the companies as a majority stockholder. He claimed to be an Indian citizen from Manipur named Charlie Peng. Sang, as Indian national Peng had submitted an Aadhaar Card and PAN Card as identity proof in company formation.
Lou Sang’s first company under the name Sang was incorporated in March 2018 named Fin Block India Private Limited. In 2019, Sang joined the boards of three more companies – INWIN Logistics Private Limited, OTA New Delhi Private Limited, and Clean Harbours Private Limited. In 2020, he started another company OTA Logistic Private Limited – a transport and travel business company.
Sang as Peng was infusing cash of around Rs 3 crore through the hawala chain on a daily basis with the help of bank employees in Bandhan Bank and ICICI Bank. He held over 40 bank accounts.
In January 2021, Lou Sang (Charlie Peng) and Carter Lee another Chinese national were arrested by the ED in the Rs 1000 crore money-laundering case.
Sang was earlier arrested in 2018, by a joint team of central intelligence agencies and the Delhi Police special cell for impersonation and forgery. He had married an Indian national to expedite acquiring an Indian passport. The investigators alleged that he was working for Chinese intelligence agencies and running the business of hawala transactions through a currency exchange firm, but he was granted bail by a Delhi court in 2019.
Reportedly during the interrogations at the time, Sang admitted to various narratives including being a Tibetan fleeing Chinese persecution, a criminal who was forced into spying by the Chinese government as well as being a PLA soldier. “He was a hard nut to crack. A trained spy, he confused his interrogators. He repeatedly changed his Chinese background story several times to hoodwink us,” an official who questioned him in 2018 told GoaChronicle.
Sang told his interrogators that his mission was to enter the inner circle of Dalai Lama and also assist Chinese Embassy officials in transferring money and arranging logistics.
In 2020, the Central Crime Branch (CCB) Cyber Cell Special squad had nabbed three people who had indulged in giving loans and collecting huge money in the name of interest, compound interest, and broker charges on behalf of companies owned by Chinese people.
When CCB Cyber Crime cell launched raids on a comapny – Ace Pearl Services Pvt., Ltd at Koramangala Extension in the city. To their surprise, it unearthed four more firms also functioning there and all were giving loans online and collecting interest, compound interest, and charges. If loanees failed to give the money demanded they will be threatened with dire consequences.
Another surprise in store for the CCB was that other four firms were run by Chinese people that included Higelar Services Pvt., Ltd., Exceedwell Service Pvt., Ltd. Mascotstar Services Pvt Ltd. Aqua Stiller Pvt. Ltd., who were running apps like Loan App, Money day, Paise a Pan, Loan Time, Rupee Day, Rupee Kart in Cash. They were running Call Centers to collect loan amounts.
CCB sleuths have seized 35 Laptops, 200 basic mobiles of different companies, 8 Cheque Books of various banks, 30 sim cards of various companies.
Last year, the Enforcement Directorate (ED) had registered as case against seven companies out of which three are fintech (financial technology) companies namely Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited, and Cloud Atlas Future Technology Private Limited which are controlled by Chinese nationals and three NBFCs (non-banking financial companies) registered with RBI. The Chinese loan apps offered loans to individuals and levied usurious rates of interest and processing fees.
In 2020, the Telangana Police arrested Chinese nationals Zhu Wei, Yi Bai, Liang Tian Tian, and Yah Hao in an Rs 1100 crore Chinese Loan App money-laundering scam.
Yah Hao, a Chinese national, Dheeraj Sarka, Ankit Kapoor, and Neeraj Tuli were directors of Dookypay, an e-wallet company based in Delhi. The quartet was helping transfer the money from those participating in online gambling to the parent company – Beijing-based T Power Company.
In another incident last year, Pawan Kumar Pandey, accused of running a shadow company to transfer the cheated money to his alleged “handlers in China”, was arrested from Noida in Gautam Buddh Nagar district of Uttar Pradesh last year. 19 laptops, 592 SIM cards, 5 mobile phones, 4 ATM cards and one passport were also recovered from him.
Uttarakhand police had said that the racket came to light following a complaint by two Haridwar residents: Rohit Kumar and Rahul Kumar Goyal.
“The complianants claimed that one of their friends told them about a mobile app on Google Play Store named Power Bank, which doubled returns on investment within 15 days. Believing him, they downloaded the app and deposited ₹91,200 and ₹73000,” revealed Uttarakhand Police.
A probe was initiated by the special task force which found that the mobile app in question was available on Google Play Store between February 2021 and May 12, 2021, during which, it was downloaded by at least 50 lakh people. It also found that the money deposited through the app was then transferred to bank accounts of the arrested accused through payment gateways. Post the cyber forensic probe it was learned that the app was linked to China, where Pandey’s handlers are sitting. They used to en-cash the crypto currencies into their local currency to end the chain of money laundering, which started with duping Indians through the app.
Millions of people are being duped in India by the Chinese loan apps. Most Chinese owners of the loans apps are connected with the People Liberation Army or Chinese Intelligence. They lure greedy Indians to be the frontend to their shadowny designs and they lure the needy in their desperation for easy access to financial resources.
The real devil in the Chinese loan app game is that the money-laundering happens in the crypto currency world. India still needs to keep pace with new technologies used by the criminal minded.