China-related financial fraud and money laundering in India


June 28, 2022 3:44 p.m IS

Beijing [China], June 28 (ANI): India has recently witnessed a wave of financial fraud through instant loan applications for microcredit and cryptocurrency transactions. The use of proxies to deceive Indian nationals and money laundering is widespread. According to the investigating authorities, most of these frauds and misconduct involved Chinese citizens or companies.
App-based instant microcredit lending fraud: The crackdown on the illegal app-based instant microcredit lending companies started in India in late 2020. The Intelligence Fusion & Strategic Operations (IFSO of Delhi Police), Enforcement Directorate (ED) and Hyderabad Police, through various successful operations, revealed the modus operandi of groups involved in these scams. In such cases, they arrested at least half a dozen Chinese nationals. To the dismay of authorities, many such scammers fled to China and continued their businesses with impunity.
With the arrest of eight perpetrators, IFSO learned that they were extorting people under the pretext of granting loans through Chinese applications. They used to blackmail the borrowers with the information collected in these apps. After that, they sent the defrauded amount to China via cryptocurrency. The IFSO also identified the crypto accounts of the three Chinese nationals involved in the case.
The Enforcement Directorate attached Rs.6.17 crore held in bank accounts linked to fraudulent fintech firms and Chinese nationals. ED’s investigation revealed that the defendant had set up fintech firms to conduct illicit transactions, originate loans and make investments through mobile apps such as Cash Master, Krazy Rupee, Cashin and Rupee Menu. The accused provided short-term loans to the public using the accounts opened on Indian citizens’ KYC (Know Your Customer) documents. They used to act in unethical ways, charging high processing fees and exorbitant interest to get the money back.
Hyderabad police also arrested two suspects who defrauded people with loan applications such as Ocean Rupee, Life Wallet, Maloo Wallet, Elephant Cash, Box Cash and Dutta Rupee. The main actor in this operation was Chinese international Chen Chaoping, who is currently suspected of being in China.
Fraud in pig slaughter
Pig slaughter is a type of fraud that originated in China (sha zhu pan in Chinese). In this scam, an individual/group invests for weeks or months to form a fake relationship with the victim before convincing the target to invest money in a scam operation that resembles slaughtering the pig after it is fattened. The National Cyber ​​Crime Portal said an Indian man was recently scammed out of Rs81 lakh by pig slaughter scams. Defendant Anna Li from China befriended the complainant and lured him into investing in cryptocurrency for much higher returns and transferring it to a MetaTrader5 application. She later blocked his access to his funds of Rs81 lakhs as the portal was already compromised.

Economic crimes by proxies
Chinese scammers also used Nepalese citizens as proxies and Nepal as proxy country to deceive Indians. Nepalese police arrested two Chinese, namely Wang Zinao and Chang Hubao, along with 115 Nepalese in two separate raids for making illegal loan applications for Indians from Nepal. Similarly, Rachakonda Police, Telangana arrested three West Bengal Nepalese in connection with an investment scam totaling about Rs 86,000. The finances acquired through the scam were funneled to China for cryptocurrency exchanges.
money laundering offences
Money laundering by Chinese individuals through shell companies is also widespread in India. Many cases of money laundering in India involving Chinese nationals have come to light. For example, the Ahmedabad Police, Detection of Crime Branch (DCB) recently arrested Ping Huang, a Chinese national, and two others for using a shell company to transfer Rs 1 crore to China.
Other economic crimes
China has also been implicated in various other economic crimes. It has been notoriously involved in the dumping of commodities such as N,N’-dicyclohexylcarbodiimide (DCC) in India. Chinese smartphone maker OPPO hurt the domestic market by forming a cartel with e-commerce platforms. Chinese companies have also been involved in damaging established players like “HTC” with deceptively similar brands. China has also recently disrupted the supply chain to hurt India’s electric vehicle (EV) and solar panel manufacturing sectors, which depend on Chinese imports.
India’s answer
India is taking concrete steps to prevent financial fraud. The Ministry of Corporate Affairs (MCA) has asked the Registrar of Companies of Delhi and Haryana to file a complaint against auditors and company secretaries linked to Chinese nationals who have indulged in the financial scams. It has registered over 700 cases across the country against companies with Chinese nationals as promoters and directors who recorded “suspicious transactions” or “dubious credentials”. The move followed intelligence finding that the companies had been “abused” for various purposes, including “tax evasion” and “money laundering.”
The Government of India has imposed anti-dumping duties to prevent dumping of goods on various products dumped by China in India. It is aiming to become self-employed or Atma Nirbhar in the manufacturing sector to lessen the impact of supply chain disruptions from China. (ANI)


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