An online gambling scam of 1,100cr busted. Chinese national involved!

Online Gambling china scam 1100cr

In an alarming turn of events, Hyderabad police has busted an online gaming scam and has arrested four individuals including a Chinese national identified as Yah Hao.

This began with regular complaints of online fraud, when two individuals approached the cyber cell of Hyderabad police after losing Rs 97000 and Rs 1.67 lakh to an online gaming website. Upon investigation into the complaints, it turned out to be a huge gambling racket run by China based company and resulted in a recovery of Rs 30 crore from two bank accounts in Gurugram.

The arrested Chinese national Yah Hao, was allegedly the head of operations for south-east Asia. In a statement by Hyderabad City Police Commissioner Anjani Kumar, a total of 1100 crore has been traced as inward transaction on the two accounts, most of which, was in 2020. Other transactions are also being traced currently. The total overseas remittances add up to nearly Rs 110 crore, he said, adding that the group was planning to register a company in the Cayman Islands.

A Hyderabad Police officer explaining the modus operandi of Chinese online gaming racket (source:dnaindia.com)

The bank accounts used in the crime were of HSBC Bank and were operational since 2019. The first bank account had a balance of 14 crore and showed approx 500cr as inward transactions, while the second account had 16 crore as balance and approx 600 crore as inward transactions. Both the accounts were seized by the authorities and the total balance of 30 crore was recovered. Along with these two accounts, 15 other accounts were unearthed from which another Rs 20 crore were recovered as of August 19, said the police.

The Chinese national and his three associates were arrested from Delhi by the Hyderabad police. The Chinese national Yah Hao, was apprehended from the IGI Airport. The other three associates are – Dheeraj Sarkar of Gurugram, Ankit Kapoor and Neeraj Tuli of Delhi.

The four have been booked under IPC Sections 420 (cheating) and 120-B(conspiracy) and under the Telangana Gaming Act. Gambling is banned in Telangana and some other states.

The scam Game

As per the investigation, the victims were lured into the website via Telegram groups. New entry was only through referrals and the person referring a certain amount of players to the group earned a commission on the lines of MLM (multi-level-marketing ). On the groups, the admins will indicate a website where they can play games and place bets on it. The websites used to change on a daily basis. In a specific case, the players were required to place their bets on colors and their combinations – a Color Prediction Game, the police said.

The youth placed bets while playing online gambling games organized by Chinese firms. As of August 17, the police have found over 500 such domains, most of which were registered in China. All of them have a similar interface and are operated out of China and Taiwan. The organizers have also been accused of cheating the gamblers by manipulating the results. The initial chances of winning the bets are around 7:3, and the person wins in multiples of Rs 10. As the game progresses, the winning probability reverses to 3:7.

The seized accounts were found to be linked with the following companies : Linkyun Technology Pvt Ltd, Dokypay Technology Pvt Ltd, and SpotPay Technology India Pvt Ltd, Growing Infotech Pvt Ltd, Sily Consulting Services Pvt Ltd, Pan Yun Technology Services, Daisylink Financial Pvt Ltd, and Huahuo Financial Pvt Ltd. Police also found that these companies had the same set of directors and shareholders etc. The entire process is run by the China based directors and partners and the payments were routed through India based payment gateways and payment service providers. In this case, it was PayTm and Cash Free. All the companies are controlled by Beijing T Power Company.

Yah Hao oversaw the online gambling activities in India while he was stationed in Delhi. He claims he was sent to India in January as a substitute to the then head of India operations of the company. According to police, the arrested persons have not yet spoken about their clients or what is the exact nature of their business. “It is all in loops and loops. There is an element of their involvement in renaming recently banned Chinese apps, for example, ‘SHAREit’, and putting it out for people to use,” a police official involved said, adding that they are also looking at if the accounts were used for routing money from phishing scams.

The four are to be produced in a local court on Friday.

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