Chinese loan app racket: Gurgaon cops say scam linked to fake companies
Gurugram police said the four suspects arrested in connection with a Chinese phone app lending racket were hired and trained by a man who was on board several illegal companies involved in the deception, and added that illegal call centers had also been set up following his example.
At a press conference on Saturday, the Serious Fraud Investigation Bureau (SFIO) said that after search and seizure operations by the Ministry of Union Affairs on September 8, the agency had arrested a person by the name of Dorste (first name only) from Gaya.
Police said searches were carried out at the offices of Jillian Consultants India Private Ltd, a wholly owned subsidiary of Jilian Hong Kong Ltd., in Gurugram, Bangalore and Hyderabad.
Dortse was on the board of directors of Jillian India Ltd and has now become the mastermind behind the whole racket of incorporating a large number of shell companies with Chinese ties in India and supplying shell directors to their boards of directors. administration, police said.
Police recovered boxes filled with corporate seals and digital signatures of bogus directors during the raids.
Investigators said the investigation so far revealed that the racketeering was primarily aimed at those who had low financial literacy and were unaware of the prospects of identity and data theft during their digital transactions.
READ | Investigation into loan collectors takes cops to Delhi, China and Kerala
Jasvir Singh, a police station officer at Cyber West Police Station, said they broke up the gang in coordination with other cybercrime units in the city. He said the suspects used to extort money from people in the name of granting a small loan through China-based/funded loan applications. “All the victims who were tricked did not verify the credentials of the company and why it was not listed on playstore. It is very important to verify the review of any app listed on social media before doing any transactions with her,” he said.
Police say the suspects set up an illegal call center to call victims and extort money from them, threatening to reveal their responsibilities to friends, family and colleagues – all the usual traps of a fraud typical mobile phone application loan. This is one of many scams and illegal call centers that Gurugram Police have busted in the recent past.
In March, 38 people were arrested in Udyog Vihar after police received more than 50 complaints against them.
In April, the Reserve Bank of India (RBI) task force found 600 illegal loan applications, 27 of which were banned. With the rise in digital fraud cases, the central bank is reviewing know-your-customer (KYC) standards to identify shortcomings and close gaps. In 2020, about 60.2% of recorded cybercrime cases were related to fraud, or 30,142 cases out of 50,035, according to the latest data from the National Crime Records Bureau (NCRB).
Police said the four suspects were arrested under sections 384 (extortion), 420 (cheating), 120 B (conspiracy) and 465 (false) of the Indian Penal Code and sections 66, 66B, 67 and 67A of information technology law. The case was registered at Cyber East Police Station and an investigation was ongoing to track the scam’s links to other such operations across India.
The Indian employees were in contact with their Chinese counterparts through a Chinese instant messaging application and acted on their behalf to extort money from the victims.
A senior police officer from Gurugram said investigations so far have revealed the possible involvement of these front companies in serious financial crimes detrimental to the financial security of the country.
Four of those arrested suspects are shareholders, fictitious directors and executives of the company. They used to make dummy administrators to register a business and under the shadow of a business they ran call centers to extort money from people by harassing them.
According to the complaint, the modus operandi of the said directors is that they facilitate the assistance of directors of foreign nationals to incorporate companies in India. For this, they collude and partner with the Indian directors to open the company on behalf of the foreign directors. The submitted company provides all the logistics for the opening of the company, including the certification of documents required for filing by the company. Apart from the incorporation of the company, he also appoints the directors of Indian origin and then takes their resignation by appointing the directors of foreign nationals who are ultimately the sole beneficiaries of the channeling of the money which is done with the help of Indian accountants and administrators.
“Indian Administrators are paid a certain sum for holding the position of Administrator and therefore Indian Administrators so appointed are fictitious administrators. The submitted documents being uploaded by this company and these administrators were either wrong or forged or based on the forged address. During the search, hundreds of seals and stamps of businesses and customers were found. Employees found in the office have admitted in their statements that the duo directors are the sole decision-makers and are actively involved in soliciting these agreements for the formation of shell companies and the recruitment of unsuspecting individuals as shell directors,” a Singh said.