New Delhi, September 16:
The Enforcement Directorate (ED) has frozen funds totalling ₹46.67 crore belonging to merchant entities kept in four payment gateways — Paytm, Easebuzz, Razorpay and Cashfree — in its money laundering probe against a Chinese-controlled app-based investment token, people familiar with the development said.
The freezing of funds under the Prevention of Money Laundering Act (PMLA) followed raids on Wednesday at 22 locations linked to several businesses and branch offices of these payment gateways in Delhi, Ghaziabad, Lucknow, Gaya, Gurugram, Mumbai, Pune, Chennai, Hyderabad, Jaipur, Jodhpur and Bengaluru.
A statement issued by the ED said the probe against app-based token, HPZ, and its related entities was initiated based on a first information report (FIR) filed by Kohima police in October last year.
HPZ was an app-based token which promised users large gains from investments in mining machines for Bitcoin and other cryptocurrencies. The modus operandi of the fraudsters, according to ED, was to lure the victims to investing in the company on the pretext of doubling their investment through the HPZ token.
“Payments were received from users through UPIs and other various payment gateways/nodal accounts/individuals. Part amount was paid back to the investors and the remaining amount was diverted to various individual and company accounts through various payment gateways/banks from where partly it was siphoned off in digital/virtual currencies. After that, the fraudsters stopped the payments and the website became inaccessible,” an ED statement said.
The ED probe revealed that HPZ was operated by M/s Lillion Technocab Private Ltd and M/s Shigoo Technology Private Limited, which were found to have links with various Chinese-controlled companies.
The agency said it suspects the involvement of M/s Jilian Consultants India Pvt Ltd, Gurugram, behind various companies involved in these frauds. One such entity, Mad Elephant Network Technology Private Limited, ED said, in agreement with X10 Financial Services Limited, was operating various loan apps. “Similarly, Su Hui Technology Private Limited, in agreement with Nimisha Finance India Private Limited had operated loan apps,” ED added. The Serious Fraud Investigation Office (SFIO) had arrested Jilian’s director Dorste from Bihar last week for running a large number of shell companies.
During the raids on Wednesday, the ED found large amounts in virtual accounts of the involved entities with payment aggregators.
“ ₹33.36 crore was found with Easebuzz Private Limited (Pune), ₹8.21 crore with Razorpay Software Private Limited (Bengaluru), ₹1.28 crore with Cashfree Payments India Private Limited (Bengaluru) and ₹1.11 Crore with Paytm Payments Services Limited (Delhi). Total amount of around ₹46.67 crore was detected and frozen in various bank accounts and virtual accounts,” the ED statement said.
An Easebuzz spokesperson said: We, at Easebuzz, would like to clarify that none of the parties mentioned in the ED’s statement belonged to our merchant base. The mentioned entities by authorities were only the counterparties of the merchant, who was using our payment gateway and this merchant had been proactively identified and blocked by us much before the investigation started, as per our internal risk and compliance process.”
A Cashfree spokesperson said that the company continues to “extend our diligent co-operation to ED operations and that the operations and on-boarding processes of Cashfree Payments were “fully compliant with existing regulations”.
“With regards to the ongoing investigation against a few suspicious entities who conducted illegal business through multiple payment gateways/banks about 1.5 years ago, we proactively blocked all those suspicious entities and funds associated with them, and have shared their details with authorities,” said a Razorpay spokesperson.
In a statement before the Bombay Stock Exchange on September 4, Paytm said: “It is hereby clarified that these merchants are independent entities, and none of them are our group entities. We are, and will continue to, fully cooperate with the authorities.”
