New Delhi: The Enforcement Directorate (ED) has raided 25 locations across five states and Union territories over two days in connection with a forex violation probe against foreign-registered online gaming companies and websites operating from India, the agency said on Wednesday.
The agency said that as part of a Foreign Exchange Management Act (FEMA) investigation, it found that several companies registered in small island countries, opened by proxy individuals with no link to online gaming activities, were collecting funds and routing it out of India in the name of import of services or goods.
“These online gaming companies or websites are registered in small island countries like Curacao, Malta and Cyprus. However, all of them are linked to Indian bank accounts opened in the name of proxy persons who have no links with online gaming activity. The amount collected from the public through gaming websites is then routed through multiple bank accounts and finally remitted out of India by mis-declaring the purpose of remittances against import of services and goods,” ED said in a statement.
The agency said it found that “hundreds of companies were opened by the key persons in the name of their employees for layering and sending remittances to the tune of about ₹4,000 crore in the guise of payments for import of goods and services”.
The search and seizure operations on hawala operators and online gaming companies were carried out on Monday and Tuesday at 11 places in Delhi, seven in Gujarat, four in Maharashtra, two in Madhya Pradesh and one place in Andhra Pradesh, ED said and added that hawala operators Ashish Kakkar, Neeraj Bedi, Arjun Ashwinbhai Adhikari, Abhijeet Khot and their associates were among those searched.
The probe suggested that income from horse racing and other games were also being routed, which is not allowed under the provisions of FEMA, 1999.
“Several PAN cards, Aadhar cards used for creating such firms, mobiles used for operating bank accounts of these firms and office stamps were also found and seized. Key persons were found using international virtual mobile numbers for instant messaging apps like WhatsApp, Telegram, Signal etc. and using pseudo-names such as Pablo, John, Watson etc. for masking their actual identity,” the agency added.
To avoid being intercepted by the investigating agencies, ED said, the accused persons used remote based servers and laptops through remote access apps like Anydesk, Team viewer etc.
During the searches, the agency recovered incriminating documents and electronic devices establishing foreign outward remittances of thousands of crores collected from public through gaming websites using accounts of dummy firms opened in the name of proxy persons who are not linked with the gaming activities, ₹19.55 lakhs in cash, US$ 2,695 while 55 bank accounts of firms being used for layering and remitting income generated from online gaming in the guise of remittances against import of goods and services were frozen, ED said.