Hyderabad city police on October 12 said they have busted a Chinese investment fraud to the tune of Rs 903 crore and arrested 10 people, including a Chinese national.
According to the police, the accused used RBI authorised money changers and converted illegal funds collected via investment apps into dollars. "Hyderabad city police cyber crime wing has detected a Chinese investment fraud case where the modus operandi is to use authorised money changers, who are authorised by the RBI, to convert illegally gathered funds through investment apps, and transfer them into dollars and then send them abroad," Hyderabad Police Commissioner C V Anand told reporters.
The police began investigation after a Hyderabad resident complained of being duped after he invested Rs 1.6 lakh in an investment app. The investigation revealed a complex chain of transactions and violations of law.
It was found that the money of the complainant was deposited in the bank account of a private company with a private bank. During interrogation, the holder of the said account revealed that he opened the bank account on the orders of a Chinese man and that he gave the internet banking user name and password of the bank account to him (Chinese man), according to a police release.
Parallelly, it came to light that the bank account (opened by a Delhi man) of another private company shared the phone number with the previous firm. It was also found that several bank accounts were opened by the Delhi man. The two persons who opened bank accounts received a commission of Rs 1.2 lakh per account.
A large amount of money from 38 virtual bank accounts of the private company went to two money changing companies. The money received in rupees is converted to US dollars in cash. The money changers and forex exchanges are found to have repeatedly flouted guidelines laid down by RBI regarding money changing activities.
Those who received money in US dollars joined hands with other fraudsters and transferred it abroad through the hawala route, it said. "It has come to light during the investigation that fraud has been committed through hawala to the extent of Rs 903 crore," the release said.
The investigation showed that two persons who played major role in the fraud are in China, police said. Anand said the city police would coordinate with agencies like ED and DRI in view of the serious nature of the fraud.
(With inputs from PTI)
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