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Rs 903 Crore Investment Fraud Running From China Busted By Hyderabad Police: Here Is All You Need To Know

HYDERABAD: The Hyderabad city police on Wednesday busted a Rs 903 crore Chinese investment scam and arrested 10 people, including a Chinese and a Taiwanese scammer.

The gang used RBI-approved money changers to turn illegal funds from investment apps into dollars, according to the police.

“The cyber crime wing of the Hyderabad city police has found a Chinese investment fraud case. The scheme is to use authorised money changers, who are authorised by the RBI, to convert illegally collected funds through investment apps into dollars and then send them abroad,” Hyderabad Police Commissioner C V Anand told reporters.

Who Are Behind The Scam

The accused con artists ran the Hawala scam out of Bombay and Delhi. Those arrested have been identified as Sahil Bajaj, Sunny aka Pankaj, Virender Singh, Sanjay Yadav, Navneeth Kaushik, Mohammad Parvez (from Hyderabad), Syed Sultan (from Hyderabad), Mirza Nadeem Baig (from Hyderabad), Chinese national Lec aka Li Zhongjun, and Chu Chun-Yu (Taiwan national).

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FIR Against Loxam

In July, a person from Hyderabad filed a complaint in the case. He said he lost 1.6 lakh because he put the money in an app called LOXAM. He was tricked into putting the money in an investment app. The investigation showed that there was a long chain of illegal transactions. The police found that his money was in an account at IndusInd Bank with the name “Xindai Technologies Pvt Ltd.”

International Scammers Involved

The two major suspects, arrested Chinese national Li Zhongjun and Taiwanese national Chu Chun-Yu, are suspected of coming to India in 2019-20 to recruit operatives but then returning to China as the epidemic broke out. As soon as the fraud started up again, they told their bosses in China and Taiwan everything they knew.

How The Scam Operated

According to the investigators, online investment apps were used to trick people into giving money. The money was put into virtual accounts and moved out of the country illegally through authorised money exchange and forex firms. This was done by taking advantage of holes in the regulatory framework.

The complainant’s money was found to be in the bank account of a private company at a private bank. During questioning, the account holder said that he opened the account at the request of a Chinese man and gave the Chinese man the account’s username and password for online banking, according to a police release.

At the same time, it was discovered that another private company’s bank account, which was opened by a man from Delhi, had the same phone number as the first company. It was also found that the Delhi man had opened several bank accounts. The two people who opened bank accounts got Rs 1.2 lakh per account as a commission.

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A lot of money from the private company’s 38 virtual bank accounts went to two companies that change money. The rupees that are given are changed into US dollars in cash. RBI found that money changers and forex exchanges broke the rules that they were supposed to follow when changing money.

It said that the people who got money in US dollars worked with other scammers to send it abroad through the hawala route.

“During the investigation, it was found that Rs 903 crore worth of fraud was done through hawala,” the press release said.

Police said that the investigation showed that two key players in the fraud are in China. Anand said that the city police would work together with ED and DRI because the fraud was so serious.

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