How India’s Loan Money Reaches China

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Recent arrests in harassment cases have helped police better understand the racketeering, including how big sharks pull strings in Nepal and how the recovered money is converted into crypto and sent to China.


Mahagram Payments had an office at Sarita A, Dahisar East






Four recent arrests in the instant loans racket have exposed the workings of companies that run mobile apps and found a suspected trail of money extorted from victims. According to Navghar Police in Bhayandar East, the callers operating in Mumbai and Thane are small fish and the sharks controlling the fraud are in Nepal. The money obtained through threats and blackmail is converted into cryptocurrencies and routed to China, suspects the Economic Crimes Wing which has been investigating the scam for two months.

Cracking the whip on instant loan sharks, Odisha police on Thursday arrested Mumbai-based Ram Narayan Pathade, the director of Mahagram Payments Pvt Ltd which ran two loan apps. Earlier, the Economic Offenses Wing (EOW) arrested two people and preliminary investigation showed that money extorted from customers was converted into cryptocurrencies and routed to China.

Police raided Baba Nanak's call center in Thane this month and found 10 staff in the office.  Representation photo
Police raided Baba Nanak’s call center in Thane this month and found 10 staff in the office. Representation photo

The EOW, which has been investigating the loan racket for two months, has arrested Tarun Dudeja, owner of six shell companies, and Mohd Javed Saifi, owner of a fake company called IWT India. He also froze R6.57 crore in different IWT India accounts.

Pathade, who was arrested at Delhi airport, and Dudeja and Saifi are partners, police said.

Mahagram Payments operated from Sarita, Dahisar East until two days ago  Mahagram Payments operated from Sarita, Dahisar East until two days ago

The trio operated two lending apps – Koko and Jojo, which are not registered as Non-Banking Financial Companies (NBFCs) under the Reserve Bank of India Act.

Police blocked 1,058 virtual accounts created by Mahagram Payments for illegal transactions.

“Mahagram is not registered with the RBI as an NBFC, and he had hired the Gurgaon-based company, IWT India, to forcibly collect the money at high interest from the customers. Initial investigation suggests that the two apps were not created in India and that the illegally acquired money was used in hawala transactions and invested in cryptocurrencies,” said JN Pankaj, Deputy Inspector General of the police, EOW.

Explaining the route of the money, DIG Pankaj said, “There are always three to four layers through which the money reaches the borrowers. From companies like Mahagram, it is sent to virtual accounts, through which a payment gateway is used to park money into an account, and is paid. But while getting money back, it takes a different path.

Run two apps

“The two applications, Koko and Jojo, used the bank accounts of the Pathade company to carry out its illegal loan activity. Mahagram had opened 1,058 virtual accounts, which were blocked by us,” he added. “We found suspicious transactions between the bank accounts of Pathade and Koko.”

During the investigation, the EOW discovered that the apps directly credited a small loan amount of between Rs 3,000 and Rs 10,000 to a customer’s bank account. Over 1.5 lakh people had downloaded the two loan apps.

“Although we are at the beginning of the investigation, we strongly suspect that the loaned and recovered money is traveling out of the country via hawala as well as cryptocurrencies. We are in the process of obtaining evidence for the same. Pathade’s arrest will help us uncover the ugly face of these loan apps,” said DIG Pankaj.

‘Printed QR Codes’

After Pathade’s arrest, a mid-day team visited her company’s office in Dahisar East, but learned that she had moved to Goregaon about two days ago. A Mahagram employee said at midday that the company had not processed any loan applications, but was busy printing QR codes.

“Our company creates QR codes for other companies, and they don’t deal with any loan applications. We have no knowledge of our doctor’s arrest at Delhi airport,” the employee said.

The office was located at 319, Sarita A, Prabhat Industrial Estate in Dahisar East. According to security guards at the industrial zone, Mahagram was evacuated two days ago. They said only two or three employees were seen in the office. “The company only had one computer and a few files in the office,” they added.

A security guard said, “Two or three days ago the office was evacuated and the goods were transferred somewhere in Goregaon. They seemed in a hurry to move.

100
Number of people each agent calls from Thane call centers

1.5 million
Number of people who downloaded two apps

1,058
Number of virtual a/c used for illegal transactions






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