The Delhi Police has busted a nationwide fraud syndicate, operated by Chinese nationals with Indian fraudsters, which cheated more than half a million citizens of over Rs 150 crore. 11 people, including a Tibetan woman and two chartered accountants (CAs) based in Delhi and Gurugram were arrested following multiple raids in Delhi-NCR and West Bengal since June 2.
Anyesh Roy, Deputy Commissioner of Police (Cyber Crime Cell, CyPAD), said the fraudsters were offering lucrative returns on an online multi-level marketing (MLM) campaign through two “malicious mobile applications” – Power Bank and EZPlan. Roy revealed that about Rs 11 crore of cheated money was blocked in various bank accounts and online payment gateways that were being operated by the members of the syndicate based in India and China. “Around Rs 97 lakh was recovered from one of the arrested CAs, Avik Kedia, who formed over 110 shell companies for Chinese fraudsters to route the money through multiple bank accounts.”
DCP Roy said the CyPAD officials came across several social media posts made by people across the country regarding the two mobile apps – Power Bank and EZPlan. It claimed to offer double the invested amount in 24-35 days. “The apps also offered returns on an hourly and daily basis, and had investment options starting from Rs 300 to several lakhs. The Power Bank app was available on Google Play Store and trending at No. 4. The EZPlan app was available on the website.” The DCP added that since the messages were inducing the recipient to download an app through a short encrypted URL. The activity was identified as suspicious.
“The CyPAD officials found that to deceive people, the Power Bank app projected itself as a product of Bengaluru-based technology start-up,” the police said. “However, the server on which the app was hosted was found to be based in China. The app is associated with several dangerous permissions such as access to camera, read and write to external storage and to read contact details of the cellphone.”
The investigators found that to entice investors, the fraudsters initially gave a small payout amounting to 5-10% of the invested money. Taking the scheme to be true, people started investing more money and even circulated and shared the app with their friends and relatives. The police said that if someone invested a large amount, their account was blocked by the app.
The fraudsters contacted each other through encrypted mobile apps like Telegram, Dingtalk and WeChat. They also used sophisticated software and financial tools for automated fund transfer to manage the enormous scale of the fraud.