Cyber Crime
From India to China via Dubai: Rs 712 Crore Investment Fraud Busted By Hyderabad Police
HYDERABAD: In a significant breakthrough, the Hyderabad police uncovered a massive investment fraud amounting to Rs 712 crore, orchestrated by Dubai-based Chinese operators, and arrested nine individuals associated with the scam.
The Cyber Crimes Unit led the operation, seizing incriminating evidence and disrupting the fraudulent network.
Task-Based Investment Fraud and Crypto Currency Racket
The fraudulent gang targeted unsuspecting investors in India through a task-based investment fraud system, utilizing messaging applications like Telegram to lure victims into their scheme.
The criminals approached their targets with seemingly attractive part-time job offers, enticing them to participate in a “Rate and Review” assignment.
The first complainant, a Hyderabad resident, was initially drawn in by the offer and registered on a website called “https://www.traveling-boost-99.com”. He was instructed to invest a smaller sum of Rs 1,000, allowing him to rate a set of tasks and win money in return. This initial success encouraged him to invest larger amounts.
However, the victim soon found himself caught in a web of deception. After loading the wallet with Rs 25,000, he managed to earn a profit of Rs 20,000 on the website. But when he attempted to withdraw his earnings, he was asked to complete all four sets of tasks and pay a hefty withdrawal fee of 17 lakh. Eventually, the victim lost a staggering Rs 28 lakh to the scam.
READ MORE ABOUT THE SCAM: Rs 3,000 Crore Part Time Job Scam Busted: UP Cyber Police Unearth Network Of Crypto Wallets & Shell Companies, Know The Chinese Connection
Discovery of Terror Links and Cross-Border Operation
During the investigation, the Hyderabad Police made a startling revelation. A portion of the defrauded money was found to have been transferred to a crypto wallet connected to a terror outfit.
This raised concerns regarding the potential misuse of funds for illegal activities.
Further probing into the case unveiled a sophisticated cross-border operation. The scamsters, allegedly linked to scammers from Dubai and China, used Indian bank accounts to channel the defrauded funds to Dubai. From there, the money was converted into cryptocurrency and transferred to Chinese handlers, including individuals named Lee Lou Guangzhou, Nan Ye, and Kevin Jun.
Investment fraud by dubai-chinese operators of 712 crores detected by #cybercrimes unit of hyderabad city police. https://t.co/mOqu9KjS9E pic.twitter.com/nsossq2udH
— Hyderabad City Police (@hydcitypolice) July 22, 2023
Arrests and Involvement of Fictitious Shell Companies
Nine individuals were arrested in connection with the investment fraud. Among the detainees were Prakash Mulchandbhai Prajapati, Kumar Prajapati, Naimuddin Wahiduddin Shaik, Gagan Kumar Soni, Parveez alias Guddu, Shameer Khan, Mohammed Munawar, Shah Sumair, and Arul Dass. These suspects hail from different cities in India, such as Mumbai, Lucknow, Gujarat, and Hyderabad.
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The investigation also uncovered the involvement of fictitious shell companies. Four individuals—Munawar, Arul Dass, Shah Sumair, and Shamir Khan—were sent to Lucknow to open bank accounts in the names of these fake businesses. A total of 33 shell companies and 61 bank accounts were established, which were later sold to Kumar Prajapati, an associate of Prakash Prajapati.
Connection to Chinese Handlers and Terror Financing Module
Prakash Prajapathi, a resident of Ahmedabad, played a pivotal role in the operation, liaising with the Chinese handlers. He provided Indian bank accounts to the Chinese scammers and facilitated remote access to these accounts from Dubai and China. The police identified that he received commissions in USDT or TRON through a Tron coin wallet address.
Hyderabad police sought assistance from the Indian Cybercrime Coordination Centre (I4C), a division under the Ministry of Home Affairs, to scrutinize the crypto wallet transactions of Prakash Prajapati. During their investigation, they discovered that a certain amount of funds had been transferred to the account of the terrorist organization Hizbullah.
The investigation revealed disturbing links to terror financing. Some of the crypto wallet transactions were found to be connected to a wallet associated with the Hizbullah, a designated terror organization. The investigation has thus taken on a national significance, and Hyderabad Police Commissioner CV Anand has announced that the case will be brought to the attention of the Union government for further coordination.
The Hyderabad police have successfully cracked down on a multi-crore investment fraud, shedding light on the sinister nexus between Dubai-based Chinese operators and their Indian accomplices.
The use of cryptocurrency as a means to launder money across borders, coupled with links to terror financing, has raised serious concerns about the need for enhanced cybersecurity measures and international cooperation to combat such sophisticated financial crimes.
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Modus Operandi of the Investment Fraud Gang:
The investment fraud gang operated a sophisticated and deceptive modus operandi, preying on gullible investors and using technology to facilitate their fraudulent activities. Here’s a breakdown of their modus operandi:
Step 1: Identifying Potential Victims
The gang identified potential victims through various means, such as online platforms, social media, and messaging apps like Telegram. They approached individuals with offers of part-time jobs or investment opportunities that seemed legitimate at first glance.
Step 2: Luring Victims with False Promises
To gain the trust of their victims, the scammers offered attractive deals promising high returns on investments or easy ways to make money. In the case mentioned, they used a “Rate and Review” job offer on their website, promising profits for simple tasks.
Step 3: Initial Small Investments to Gain Trust
To build confidence and appear authentic, the gang allowed victims to start with small investments. This initial investment gave the victim a taste of success, leading them to believe that the opportunity was genuine.
Step 4: Coercing Larger Investments
Once the victim was hooked, the scammers employed tactics to make them invest larger sums of money. They enticed the victim with promises of even higher returns and used psychological manipulation to create a sense of urgency or fear of missing out on lucrative opportunities.
Step 5: Fake Task-Based Activities
To maintain the illusion of legitimacy, the gang introduced task-based activities that seemed genuine but were designed to manipulate the victim. These tasks were designed to ensure that the victim continued to invest more money.
Step 6: Restricting Withdrawals
As the victim’s investments increased, the scammers imposed restrictions on withdrawals, claiming that certain conditions had to be met before they could access their profits. This tactic was used to trap the victims and prevent them from realizing the scam until it was too late.
Step 7: Layering and Money Laundering
To conceal the origins of the fraudulently obtained funds, the gang employed a layered approach to money transfers. They used shell companies and fictitious bank accounts to move the money through various channels, making it difficult for authorities to trace the trail back to them.
Step 8: Crypto Currency Transactions
To further complicate the investigation and launder the money internationally, the gang converted the defrauded funds into cryptocurrency, using digital wallets and crypto exchanges. This move allowed them to transfer the money across borders with relative ease, making it challenging for law enforcement to track and recover the funds.
Step 9: Involvement of Chinese Handlers
The gang had ties with Chinese handlers who played a crucial role in orchestrating the scam. These masterminds were based in Dubai and China, utilizing remote access apps to operate Indian bank accounts and execute transactions on their behalf.
Step 10: Connection to Terror Funding
Shockingly, the investigation revealed that a portion of the fraudulently obtained funds was funneled to a crypto wallet associated with a terrorist outfit. This raised concerns about potential links between the investment fraud gang and criminal elements involved in terror financing.
The sophisticated and multi-layered modus operandi employed by the investment fraud gang highlights the need for increased awareness and vigilance among potential investors. Authorities continue to investigate the case to apprehend all individuals involved and bring them to justice while also working to recover the defrauded funds for the victims.
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