18th August 2023, Mumbai: The Economic Offence Wing (EOW) of Odisha Police arrested the India head of a Chinese earning App involved in an online ponzi scam, an official statement said.
S Chitravel, 21 was arrested from Aviyur near Madurai, Tamil Nadu, the EOW said in a statement. He was brought to Odisha and produced before OPID Court, Cuttack on August 16 which remanded him to five days police remand.
Cyber Financial Scams
The EOW said that the mastermind of this scam is Guanhua Wang, 40, of Hangzhou, China. He along with two other Chinese nationals (one male and one female) came to India in 2019 and stayed in Bangalore for a few months. They created at least 3 shell companies based in Bangalore to run different Cyber-financial scams.
Chitravel was made director in one such company, namely ‘Bettec Technologies Private Limited’. During Covid time the trio went back to China but continued running the scam through Chitravel and some other such hired directors and facilitators. Chitravel used to run the illegal scam in India, the EOW said.
Illegal digital loan Apps.
Earlier, these Chinese people were running illegal digital loan Apps. However, after many people committed suicides after being trapped in loans, law enforcement agencies started a crackdown against Chinese loan Apps and the government banned many such loan apps.
On the modus operandi of fraudsters, the EOW said Chitravel used to supervise the gang that used to threaten and send morphed porn pictures of loan victims and their family members.
Developed in China and launched in India
After the loan apps were banned, they started running earning Apps (a kind of online Ponzi scheme with a promise of doubling/ tripling money in a very short time), online betting and other Apps.
The EOW during the investigation came to know that they were using the morphed photos of celebrities in their online advertisements to lure new investors.
To avoid action, they developed a software in China but got it uploaded from India so that it can be masked as an Indian app.
“Money is being siphoned out of India… to China through these scams. They generally use multiple layers of mule bank accounts at lower level, followed by current bank accounts of shell companies and finally, crypto traders and some dubious export-import firms to siphon money out of India.” In some cases, small amounts have also been withdrawn in cash in Dubai.
How to protect yourself from Fake loan websites, loan App frauds
RBI has listed out the following options that one must exercise before opting for any loan from any website or mobile app.
- Verify if the lender is registered with the Government / Regulator /authorised agencies.
- Check whether the lender has provided a physical address or contact information to ensure it is not difficult to contact them later.
- Beware if the lender appears more interested in obtaining personal details rather than in checking credit scores.
- Remember that any reputed NBFC / bank will never ask for payment before processing the loan application.
Genuine loan providers never offer money without verifying documents and other credentials of the borrowers. Verify if these NBFC-backed loan apps are genuine.
By ASC Priya