China wolves loan | Paying Workers Cash, Crypto Route, Foreign Servers: Sneaky Ways To Loan Application Kingpins
Predatory lending by instant loan apps has led to a wave of suicides in several states. Many of these apps have been traced to China and Hong Kong, and money laundering channels using cryptocurrencies have been discovered. Despite the arrest of several actors, including Chinese nationals and Indian accomplices, these applications continue to flood the market. They lure desperate individuals into a debt trap and abuse access to their smartphone data to extort exorbitant sums.
In this series, News18 will shed light on the human cost of fraud and investigate the national security implications of Chinese Indian data.
When the world was battling the Covid pandemic, some Chinese nationals were busy using this as an opportunity to make unwarranted gains, News18 has learned.
A major expansion of troubled loan apps in India began after the first lockdown. The scammers were looking for Indians who were in dire need of money.
The entire architecture of these predatory apps is designed so that the Chinese nationals who started it all can easily escape without leaving a footprint, officials said.
In some cases, they added, Chinese nationals did not even meet anyone in India and were in contact with them through apps.
In one case, Delhi police arrested nearly 150 people, including bogus directors of such an operation this year, and found the Chinese behind them had kept in touch through an app. The app has a server in Singapore and admins are used to getting instructions through this route.
In some cases, it has been found that the parent companies are registered in China: Guangzhou, Shenzhen, Beijing, etc.
Investigators in 90% of cases failed to arrest Chinese nationals due to a complex system and lack of information, sources said.
The first case to be investigated in India related to these loan apps was investigated by Telangana police, officials said. Then-co-commissioner Avinash Mohanty told News18 it all started while looking into a betting case.
“We discovered these lending apps while surveying betting apps. When we conducted a thorough investigation, we discovered that a loan application threat had been orchestrated by Chinese nationals. In a few cases, we found that people who used to make threatening calls received instructions from their boss in Indonesia. The entire operation of these loan apps appears to be handled by Chinese nationals at the helm. This was also stated during an investigation into the multi-crore color prediction game app scam where crores of rupees were transferred to front companies registered as NBFC,” it said. he declares.
Since everything is operated from outside India, the agencies rely on circular notices which only have an impact if the foreign nationals are in India. If they have already left, officials should contact Interpol.
“We issued a lookout for a Chinese Liu Yi who floated various businesses through fake admins in 2019. The apps he was using in the business had almost 1.5 lakh downloads. Its parent company was Jianbing Technology in Hangzhou, China. He is the Director of Omelette Technology Private Limited but indirectly controls or owns various other companies that run dozens of loan applications,” JN Pankaj, Deputy Inspector General (DIG) of Police, Economic Offenses Wing (EOW) and Special Task Force (STF), Odisha, told News18. The accused Chinese national remains at large.
Another case being investigated by Delhi police revealed that money was funneled into Dubai by converting it into cryptocurrency. These apps are also related to betting apps. The accused has so far told police that he was initially a victim who took out loans from these apps, but a few people who already worked for the company told him to work with them. He also got some money back after he started working for these predatory apps.
The main challenge facing the agencies which will have implications for the Indian financial system is the conversion of Indian money into cryptocurrency. The Chinese injected money directly but received money via cryptocurrency, which is almost impossible to intercept. The money, which could be in thousands of crores of rupees, is converted into cryptocurrency and no one knows who withdraws it, where and in what currency. These cryptocurrency servers are not accessible, and the companies that run them are also unwilling to share data, sources said.
Servers outside India
Investigators from different agencies have found that in all these cases, the servers of these apps are located outside India. Call center staff who threaten and extort money gain access to the system by logging in using credentials given by their superiors.
“They don’t have access to the data of the people who took the money. We arrested almost 150 people who worked in a call center and discovered that they used to log in to get data. Contacts that were hacked by these apps and gallery photos of victims’ phones have been uploaded and saved on servers outside India,” said a Delhi Police officer delegated in the Delhi district. ‘Outer North. CNN News18. Since the servers are located outside India, also in an unknown location, the agencies are powerless to act.
While these apps had everything online, their employees received their salaries in cash. In cases reported in Telangana, Odisha, Delhi and Maharashtra, it was found that arrested defendants who received only 12-15,000 rupees were paid in cash. In cases where cops have arrested a few Chinese, they have been found to provide cash to team leaders who then distribute salaries to others. Chinese nationals did not have a bank account as this would require various documents which they never provided. In fact, in most cases, detectives don’t even know the actual names of the Chinese nationals who faked the whole thing, because the fake directors had virtually no details about them.
Network in more than 6 countries
Investigations by police departments in several states like Delhi, Maharashtra, Telangana, Odisha, Gujarat, etc., revealed that these Chinese nationals started companies in various countries including Indonesia, Sri Lanka, Pakistan , Nepal and Bangladesh.
Detectives also discovered after arresting Chinese nationals that they intended to open networks in Africa and West Asian countries after extorting money from Asian countries.
“Evidence suggests they run similar scams in Indonesia, Sri Lanka, Pakistan, Nepal and Bangladesh, and also have ties in the US and Hong Kong. They are expanding their network financial criminal in African and West Asian countries,” says an internal report prepared by a specialized government agency.
Similarly, other investigations by the ED and the Income Tax Department also revealed that money was circulating in different countries after converting it into cryptocurrency.
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