KOCHI: An Enforcement Directorate (ED) investigation into money laundering by Chinese loan apps has revealed that two individuals from Kerala arranged 479 mule bank accounts, facilitating transactions worth Rs 718 crore until 2023. A significant portion of these funds was transferred to China via cryptocurrency.
The arrested individuals, Sayid Muhammed M M, 36, from Ayancheri, Kozhikode, and Varghese T G, 35, from Fort Kochi, Ernakulam, were produced before the ED Special Court in Kochi on Friday. The court granted ED custody of the duo for four days.
Earlier, the ED had arrested four individuals from Tamil Nadu in connection with the case, following a probe into shell companies operated by them for Chinese-based fraudulent loan apps.
According to ED officials, Sayid arranged 289 mule bank accounts for Chinese online loan operators, which saw transactions worth Rs 377 crore. He received Rs 2 crore as remuneration. Similarly, Varghese facilitated 190 mule bank accounts with transactions amounting to Rs 341 crore until 2023. He was paid Rs 70 lakh for his role.
“The mule bank account details, including the account holder’s name, ATM card number, and ATM PIN, were sent to two individuals named Leema and Angel via WhatsApp. Sayid, who received Rs 2 crore for arranging mule bank accounts, distributed Rs 30 lakh to people who provided their accounts for fraudulent activities,” sources said.
The ED investigation found that the proceeds of the crime were layered through bank accounts arranged by Sayid and Varghese.
“A portion of these funds was routed to accounts linked to Zanmai Labs Pvt Ltd, also known as WazirX, a cryptocurrency platform, for purchasing virtual digital assets and cryptocurrencies for cross-border remittance. USDT, a cryptocurrency representing the US dollar, was purchased on the WazirX platform and later converted into ether cryptocurrency before being transferred to four foreign wallets. Using this modus operandi, the fraudsters, in active connivance with Sayid and Varghese, remitted proceeds of crime amounting to Rs 115.68 crore through 26 bank accounts linked to the mule accounts they provided,” the ED stated in its court filing.
The agency also found that a portion of the laundered money was routed through shell entities, including Xoduz Solutions, Vicky Venkat Technology, and Vikrah Trading Enterprise. Funds were sent abroad through normal banking channels under the guise of importing software and digital goods, using fake invoices.
Earlier, the ED had arrested Daniel Shivakumar, 37, director of Xoduz Solutions, Jawahar Nagar, Chennai; Kathiravan Ravi, 42, director of Future Vision Media Solutions, Mudichur, Kancheepuram; Anto Paul Prakash, 32, proprietor of Global Exposition and Infomedia Solution, Alandur, Kancheepuram; and Allen Samuel, 29, director of Aprikiwi Solutions, Alandur, Kancheepuram.
According to ED officials, several Chinese loan apps in APK format are being circulated on social media platforms, where advertisements for easy loans lure people into installing the apps. Once installed, these apps gain control over sensitive mobile phone data.
The probe also revealed links between mule bank accounts and bogus gambling and investment apps, further exposing the scale of financial fraud facilitated through these illicit transactions.
