ED freezes Rs 110 cr worth bank funds; seizes 1,200 credit cards in illegal betting app case

New Delhi: Funds worth Rs 110 crore kept in mule bank accounts have been frozen and 1,200 mule credit cards were seized following recent searches against the Indian operations of a Cyprus-based "illegal" online betting platform named Parimatch, the Enforcement Directorate said on Thursday. Parimatch app, as per the federal probe agency, gained visibility in the country through "aggressive" marketing, including sponsorship of sports tournaments and partnerships with well-known celebrities. It is alleged to have cheated investors luring them with high returns and generating more than Rs 3,000 crore in a year. "They also set up Indian entities to run surrogate advertisements under the names 'Parimatch Sports' and 'Parimatch News'. Payments to these agencies were made via foreign inward remittances," the Enforcement Directorate (ED) said in a statement.

The agency had conducted searches at 17 locations in Mumbai, Noida, Jaipur, Surat, Madurai, Kanpur and Hyderabad on August 12 as part of a case registered under the Prevention of Money Laundering Act (PMLA) against the operations of Parimatch. The ED case stems from an FIR filed by the cyber police station of Mumbai Police against parimatch.com for "duping" users through online betting. The agency said funds worth about Rs 110 crore kept in various bank accounts belonging to persons/entities used as mule accounts (bank accounts used for money laundering and similar criminal activities) and/or for "layering" purposes were frozen. More than 1,200 mule credit cards, found in a single premises during the searches, have also been seized, it said. Describing the alleged modus operandi deployed by the betting platform, the ED said it routed users' fund through mule accounts using different strategies across the country.

In one case, it said, funds deposited by users into mule accounts were withdrawn in cash in a specific locality in Tamil Nadu. This cash was handed over to hawala operators, who used it to recharge virtual wallets of a UK-based company. These wallets were used to buy cryptocurrency in the name of mule crypto accounts, which were actually operated by Parimatch agents, it alleged. In western India, the ED said, Parimatch engaged services of domestic money transfer (DMT) agents. Funds collected in mule accounts controlled by these DMT agents were sent to Parimatch agents through payments made by mule credit cards. The ED said it found that payment companies whose application for payment aggregator licences were rejected by the RBI offered their services to Parimatch in garb of technology service providers (TSPs) and offered their API (application programming interface) to facilitate user fund collections. "These TSPs offered the API to Parimatch agents who onboarded mule accounts opened in the name of e-commerce companies and payment solution provider companies for collection of funds from users," the ED probe found. The money so collected through UPI transfers was "layered" and transferred out in the garb of e-commerce refunds, chargebacks, vendor payments etc. effectively "concealing" the actual flow and purpose of funds, it said.