BHUBANESWAR: The Economic Offences Wing (EOW) of the Crime Branch has cracked a new financial fraud and arrested the director of a Noida-based digital services firm for allegedly manipulating the quick response (QR) codes generated by a fintech company in Bhubaneswar and cheating customers to the tune of over `14 crore across the country.
The EOW said, accused Karan Kumar Singh is director of M/s Payone Digital Services Pvt Ltd that had entered into a technology integration agreement with the Bhubaneswar-based fintech firm iServeU with Payone in April.
The fintech firm iServeU which develops software for financial services such as dynamic QR codes provides such solutions to banks and merchants across the country. It received feedback through analytics that there have been problems with the balance of payments and made a deep dive into it through it anti-fraud systems.
On verification of UPI logs, iServeU officials realised that the QR codes were manipulated by Karan and his brother Lallu Singh who happens to be the other director of Payone. The duo allegedly issued QR codes and collected money from various proxy customers before realising higher sums from banks. This way, the EOW said, they embezzled an extra credit of Rs 14.33 crore and diverted the amount to 125 different bank accounts through the payout wallet of iServeU.
iServeU had shared a user ID and the password of its payout wallet and the accused misused it to carry out the fraud. Karan was arrested from Noida on Thursday, produced before CJM Court in Gautam Buddha Nagar and brought to Odisha on transit remand.
EOW said iServeU had extended its unified payments interface-application programming interface (UPI-API) to Payone to provide digital payment services.
On June 19, iServeU officials came to know that there was a significant difference in the balance of payments in their account maintained at Fino Bank. EOW suspects there may be other agencies involved in this complex and highly technical scam. “This is a rare fraud detected by EOW for which experts will be roped in to assist in the investigation of the case,” said EOW IG Jai Narayan Pankaj.
The agency suspects that Payone directors may have links with cyber frauds based out of China and verification for the same is continuing. A complaint in this connection was lodged by iServeU’s Sanjib Kumar Parida following which EOW registered a case under various Sections of Indian Penal Code (IPC) and Information Technology (IT) Act.