NEW DELHI: The Enforcement Directorate (ED) on Wednesday arrested WinZO Games Pvt. Ltd. directors Saumya Singh Rathore and Paavan Nanda from Bengaluru in connection with an online betting case.
The accused were produced before the home office of a judge, who granted their custody to the agency and directed that they be presented again today for detailed arguments on the ED’s remand application.
The agency had conducted search operations at four locations in Delhi and Gurgaon between November 18 and November 22 in the case against the WinZO gaming app, seizing assets worth around Rs 505 crore.
The searches were carried out under provisions of the Prevention of Money Laundering Act (PMLA), 2002. WinZO is engaged in providing online real-money gaming services through its mobile application.
“During the search, proceeds of crime possessed by WinZO Games Pvt. Ltd. worth around Rs 505 crore have been frozen in the form of bank balances, bonds, FDRs, and mutual funds under Section 17(1A) of the PMLA,” the agency said in a statement.
The ED initiated its investigation on the basis of FIRs filed against WinZO Games Pvt. Ltd. and others on charges of cheating, blocking of accounts, impersonation, misuse of PAN details, and related offences. It is alleged that the complainants’ KYC details were misused, causing substantial financial losses due to fraudulent activities.
During the probe, the agency found that the company was operating real money games in foreign countries such as Brazil, the U.S., and Germany from India using the same platform as the domestic entity.
Even after the government banned online betting on August 22, the company allegedly retained about Rs 43 crore without refunding the amount to users.
Investigators also found that WinZO engaged in “unscrupulous practices,” including allowing customers to play against algorithms/software instead of real players without disclosing this to users. The company allegedly restricted or delayed customer withdrawals and generated proceeds of crime through bets lost by users.
The ED further found that global operations, including online betting, were being run from a single platform in India. Funds from the Indian entity were allegedly diverted to the U.S. and Singapore under the guise of overseas investments.
About USD 55 million (Rs 489.90 crore) was found parked in U.S. bank accounts in the name of WinZO US Inc., which the agency described as a shell company, as all operations and account management were handled from India.