Chinese loan app racket: Gurgaon cops say scam linked to fake firms

Gurugram Police has said that the four suspects arrested in connection with a Chinese phone app loan racket were hired and trained by a man who was on board of several illegal companies involved in duping people, and added that illegal call centres were also set up at his instance.

In a press conference on Saturday, the Serious Fraud Investigation Office (SFIO) said that after search and seizure operations conducted by the Union ministry of corporate affairs on September 8, the agency had arrested a person named Dorste (first name only) from Gaya.

Police said raids were conducted on the offices of Jillian Consultants India Private Ltd, a wholly owned subsidiary of Jilian Hong Kong Ltd., at Gurugram, Bangalore and Hyderabad.

Dortse was on the Board of Jillian India Ltd and has now emerged as the mastermind of the whole racket of incorporating large number of shell companies with Chinese links in India and providing dummy directors on their Boards, said police.

Police has recovered boxes filled with company seals and digital signatures of dummy directors during the raids.

The investigators said that the probe so far has revealed that the racket targeted mostly those who had low financial literacy and were not alert to the prospects of identity and data theft from their digital transactions.

READ | Probe into loan recovery agents takes cops to Delhi, China and Kerala

Jasvir Singh, station house officer of Cyber police station West, said that they busted the gang in coordination with other cyber crime units of the city. He said the suspects used to extort money from people in the name of providing small loan through China based/funded Loan applications. “All the victims that have been duped did not check the credentials of the company and why it was not listed on playstore. It is very important to check review of any app listed on the social media before going ahead with doing any transactions with it,” he said.

Police said the suspects had set up an illegal call centre to call victims and extort money from them, threatening to reveal their liabilities to their friends, family and colleagues -- all the usual trappings of a typical mobile phone app loan fraud. It is one of the many such scams and illegal call centres that the Gurugram police have busted in the recent past.

In March, 38 persons were arrested from Udyog Vihar after police received more than 50 complaints against them.

In April, the Reserve Bank of India’s (RBI’s) working group found 600 illegal lending apps, which included 27, which were banned. With rising instances of digital fraud, the central bank is taking a relook at the ‘know your customer’ (KYC) norms to identify inadequacies and fill the gaps. In 2020, about 60.2 per cent of the cybercrime cases registered were related to fraud—30,142 out of 50,035 cases, according to the latest data from National Crime Records Bureau (NCRB).

Police said the four suspects have been booked under sections 384 (extortion), 420 (cheating), 120 B (conspiracy) and 465 (forgery) of Indian Penal Code and sections 66, 66B, 67 and 67A of Information Technology Act. The case has been registered in Cyber East police station and investigation was on to track the linkages of the scam with other such operations being carried out from across India.

The Indian employees were in touch with their Chinese counterparts through a Chinese instant messaging app and were found to be acting on behalf of them to extort money from victims.

A senior police officer of Gurugram said that investigations so far have revealed the possible involvement of these shell companies in serious financial crimes detrimental to the financial security of the country.

Four of these arrested suspects are shareholders, dummy directors and management staff in the company. They used to make dummy directors to register a company and under the shadow of a company, they were running call centres to extort money from the people by harassing them.

According to the complaint, the modus operandi of said directors is that they are facilitating helping directors of foreign nationals in incorporating companies in India. For that they are conniving and joining hands with the Indian directors to open the company on behalf of foreign directors. The subject company is providing all logistics for opening the company including certifying the documents which are required for filing by company. Besides incorporating the company, it is also appointing the directors of Indian origin and subsequently taking their resignations appointing the directors of foreign nationals who ultimately are the sole beneficiary of the money routing which is being done with the help of chartered accountants and Indian directors.

“The Indian directors are receiving some amount for holding the post of directorship and therefore the Indian directors so appointed are dummy directors. The documents submitted being uploaded by this company and these directors were either wrong or forged or based upon the falsified address. During the search hundreds of seals and stamps of companies and clients were found. The employees found at office have admitted in their statements that duo directors are the sole decision makers and are actively involved in soliciting these deals for incorporation of shell companies and recruitment of unsuspecting individuals as dummy directors”, said Singh