The logo of the Enforcement Directorate.
Credit: PTI File Photo
New Delhi: Four persons have been arrested in connection with a Rs 400 crore "fraud" online betting and gaming app allegedly linked to some Chinese nationals, the Enforcement Directorate (ED) said on Friday.
Arun Sahu, Alok Sahu, Chetan Prakash and Joseph Stalin were taken into custody under the provisions of Prevention of Money Laundering Act (PMLA) in the case related to the app named 'Fiewin', the federal probe agency said in a statement.
The money laundering case stems from an FIR filed at the Cossipore police station in Kolkata against some unknown persons for "cheating" and "conspiracy" with a number of online gamers through the app.
"An amount of Rs 400 crore was generated from the Fiewin app fraud and thereafter was credited into eight Binance (global crypto exchange) wallets in the name of Chinese nationals. These wallets were operated from the Chinese mainland as revealed by the access IP logs.
"The Chinese nationals communicated with and instructed the four accused persons through digital communication especially groups on Telegram (social communication app)," the ED said.
Since these four persons played an "active role" in the Fiewin app-based scam and they are found to be involved in the offence of money laundering, they were arrested, the agency said.
The ED did not say when these persons were arrested but added that a special PMLA court in Kolkata sent them to 14 days of ED custody.
Probe found, the ED said, that Chinese nationals were operating the app with the help and support from Indian nationals.
The funds mobilised from "gullible" online gamers through the Fiewin app were deposited into the bank accounts of some persons -- called recharge persons -- who had allowed the use of their accounts by the app owners in lieu of certain commissions, as per the investigation conducted by the ED.
The agency found that Arun Sahu and Alok Sahu, based in Odisha's Rourkela, acted as "recharge persons" and the funds received in their bank accounts from the app were converted into cryptocurrency.
The duo deposited and "laundered" the cryptocurrency earned from Fiewin app and credited into the wallets of Chinese nationals on Binance, a foreign crypto exchange, it said.
Chetan Prakash, a Patna-based engineer, played a "key role" in the money laundering activities by helping the "recharge persons" in conversion of Indian rupee into cryptocurrency, the ED said.
Joseph Stalin, a software engineer based in Chennai, helped a Chinese national named Pie Pengyun from Gansu province to become co-director of Studio 21 Pvt Ltd, a company owned by him.
The ED said Pengyun used the account of Studio 21 Pvt Ltd for bulk payout services related to the app which helped them gain the confidence of gamers in the beginning and provoked larger bets from the app users.
"The funds used for payout services were received by Joseph Stalin as cryptocurrency in his Binance account from the wallets controlled by the Chinese handlers. He in turn converted cryptocurrency into INR (Indian Rupee) by selling the crypto through P2P mode on Binance," the agency claimed.