Delhi Police register FIR on ED’s complaint, launch probe into money laundering by foreign online gaming firms

NEW DELHI — The Economic Offences Wing (EOW) of the Delhi Police has registered a case and initiated a probe after a complaint was filed by the Enforcement Directorate that a money laundering racket involving foreign-based online gaming companies has been allegedly exploiting Indian residents.

These schemes, orchestrated through VPNs (Virtual Private Networks) and masked identities, have also raised serious concerns about financial fraud and illegal remittance practices among security agencies.

According to the FIR, accessed by IANS, the Special Task Force of ED had received inputs that various foreign registered online gaming companies are illegally providing access to their gaming websites to the Indian residents through VPN or masking their actual identity as foreign based online gaming websites.

“While these gaming websites are registered in foreign countries, all of them are linked to Indian bank accounts. By using the said modus-operandi, they are collecting money (in hundreds of crores) from the general public through gaming websites and sending the said money out of India using illegal means such as Foreign Outward Remittances against import of services/goods without actual business activities,” read the FIR.

Naming the accused in the FIR, the ED complaint stated that the inputs were analysed and further developed and the investigation conducted by the Directorate so far has revealed that one Ashish Kakkar, a resident of Greater Kailash -II and his other associates identified as Punit Kumar, a resident of Karampura, Keshav Sood, a resident of Anand Niketan, Chanakyapuri, and Shiv Dargar, who resides in Saket and others in connivance with other unknown persons were/ are engaged large scale money-laundering as well as international Hawala / unlawful money transfer.

The ED had alleged that the accused were indulged in Hawala transactions to various parts of the world, including United Arab Emirates (UAE), Singapore, Hong Kong, China, Malaysia, Mauritius, Thailand, among others.

The ED during their searches at Kakkar’s properties on May 22 and 23, 2023, carried out under Foreign Exchange Management Act (FEMA) resulted into recovery and seizure of large number of incriminating documents, forged/ fake IDs such as Aadhaar, PAN card, etc., digital devices for online transactions in foreign banks, laptops, computer hard discs, pen drives containing electronic record pertaining to huge number of Foreign Outward Remittances, stamps of number of Indian as well as foreign registered firms, blank letter heads of several such Indian as well as foreign firms.

The ED also alleged that Kakkar had formed and operated a number of shell trading firms/bogus companies in PAN India as well as abroad, mainly in China, Singapore, Hong Kong. Dubai, etc.

“These firms/companies were in the name of his various employees/ hired persons by using fabricated/forged documents. These dummy firms were opened / incorporated for collection/routing / outward foreign remittances of proceeds of crime from online gaming by the foreign registered gaming websites,” read the FIR.

“Kakkar and his associates had devised a unique modus operandi i.c. creation of dummy firms – by using forged /fabricated documents then used the same for import/export in Special Economic Zones and outward foreign remittances against these imports made by these entities to circumvent the restrictions imposed under the provisions of FEMA. The same forged documents have also been used in the operations of bank accounts opened in the name of dummy companies/ firms,” the FIR stated.

The FIR also said that it came to knowledge that by adopting the said modus operandi, alleged persons had operated 188 bank accounts in respect of 167 domestic firms/companies and 110 bank accounts in respect of 105 foreign firms/companies.

“Out of 105 foreign companies, 46 are based in China, 30 in Singapore, 18 in Hong Kong, seven in UAE, two in Malaysia, one in Thailand and one in Mauritius. Alleged persons retained the blank cheque books of the dummy firms/companies after obtaining/forging signatures on blank leaves,” read the ED complaint.

The extent of the operation is staggering, with the ED complaint revealing the existence of 188 bank accounts linked to 167 domestic firms and 110 accounts associated with 105 foreign companies.

Among the foreign entities implicated, 46 are reportedly based in China, 30 in Singapore, 18 in Hong Kong, and others spread across the UAE, Malaysia, Thailand, and Mauritius.

The ED further alleged that the perpetrators are accused of retaining blank cheque books from dummy firms, obtained through fraudulent means, to facilitate their illicit activities.

Additionally, they allegedly employ false and forged identities to procure mobile connections, further obscuring their true identities.

“We have registered a case under various sections of the IPC,” said Deputy Commissioner of Police (EOW) Vikram Porwal.

“A probe has been initiated into the matter,” the DCP added.