Two Noida residents were duped of around Rs 1.4 crore by cybercriminals who promised them huge returns on their investments in the stock market. Deputy Commissioner of Police (Cyber Crime) Preeti Yadav said the victims included a woman and a man who filed separate complaints.
Yadav said Trishala, who lives in Golf Avenue Society in Sector 75, lodged a complaint at the Cyber Crime Police Station on Sunday evening. She claimed she had been added to a WhatsApp group, BlackRock Stock Club, a few months ago. A woman in the group shared information about stock market investments and made her download an app on her phone, Trishala claimed.
According to the agent, Trishala initially made some profits from her investments and when she started to trust the system, she decided to invest Rs 10 crore. But when Trishala wanted to withdraw her money, the accused allegedly refused to let her do so and expelled her from the group.
In a similar case, Rohit Chawla, a resident of Sector 16, lodged a report with the cyber crime police station on Sunday evening, alleging that he had been defrauded of Rs 40.70 lakh.
Earlier this month, the Enforcement Directorate (ED) launched a money laundering probe into an alleged multi-crore online fraudulent scam in which a large number of gullible investors across India were duped and lost their hard-earned money by inducing them to invest in the stock markets through fake mobile apps. The agency’s inter-state probe revealed that the accused employed a maze of over 200 shell companies to acquire and then siphon off the proceeds of crime (PoC). Some of the shell companies are located abroad. The ED has arrested four Bengaluru residents who have been accused of siphoning off around Rs 25 crore from people after they were duped into investing in the stock market through fake and fraudulent apps.
The four were involved in setting up companies and opening bank accounts through which proceeds of crime generated by cyber scams were laundered, the Department of Education said.
The ED investigation is based on several FIRs registered by police stations across India.
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Faridabad: A resident lost Rs 7.59 crore through fake apps like “IC ORGAN MAX” and “Techstars.shop” after being duped through a Facebook link. -
Noida: A businessman was scammed of Rs 9.09 crore after he was told to download a fake app through a manipulated WhatsApp group called “GFSL Securities official Stock C 80”. -
Bathroom:A doctor in Punjab lost Rs 5.93 crore after he was persuaded to download a fake app called ‘GFSL Securities’ on Facebook.
“The fraudsters have adopted a similar modus operandi in several other FIRs to dupe innocent people by luring them into transferring their hard-earned money on the pretext of investing it in high-yielding financial products through fraudulent apps,” the ED said in a statement.
Modus operandi of cyber fraud in investment matters
Investigation conducted under PMLA 2002 has revealed that victims of the above cyber scams are being duped through fraudulent investment options in the stock market as follows:
a) Attract victims: The first step of the scam involves luring victims through various social media platforms including Facebook, Instagram, WhatsApp and Telegram by giving them false promises of high return on their investment, IPO allocation through special quota, etc.
b) False groups: Once the victims appear interested, these scammers add them to WhatsApp/Telegram groups, which also have fake members placed by these scammers in these groups to share fake and fabricated success stories in these WhatsApp groups. These WhatsApp groups have names similar to well-known financial apps/institutions e.g. ICICI Securities, GFSL Securities, SMG Global Securities, Blackrock Capital, JP Morgan, to create the impression that these groups are genuine.
e) Misappropriation of funds:To build more trust, the victim may initially get good returns on their investment as displayed on the app’s dashboard, which gives them confidence and encourages them to invest more amounts. These returns are completely fictitious and do not exist in reality. They are just numbers displayed on these fake apps. As the victim invests more funds, they eventually realize that they are unable to withdraw their funds. When victims try to withdraw their money from these apps, the scammer asks them to pay legal taxes, brokerage fees, etc., which are nothing but ways to extract even more money from them. Once the scammer believes that they have extracted so much money,
as much money as possible, cut off all communication and disappear, leaving the victim helpless and without resources. A screenshot of the app showing the message “Please contact customer support to complete the refund first” when the victim tried to withdraw their money is below:
Cyber Scam: Behind the Scenes
a) SIM card layout
Scammers are contacting several people in India through Telegram groups to purchase hundreds of SIM cards illegally. There are several Telegram groups where scammers offer SIM cards.
b) Creation of Shell Companies:
The fraudsters incorporate hundreds of shell companies specifically to acquire and siphon off the proceeds of crime generated from these cyber scams. They use the addresses of coworking spaces to provide a physical/virtual address for incorporation of these shell companies. It is further revealed that during the filing of Form INC-20A (which is required to be filed on the MCA portal for commencement of business activity), the fraudsters have submitted forged bank statements as proof of subscription of shares by the shareholders. The DoE investigation has further revealed that the fraudsters operate through a network of mule bank accounts which are rented out through channels such as Telegram. The investigation has revealed that the proceeds of crime are eventually converted into cryptocurrencies and siphoned off overseas to avoid detection and recovery.
c) Movement of money through shell companies:Funds are transferred from the victim’s account through several intermediary accounts, including Mule accounts (rented by scammers) to cover the proof of concept. This involves numerous transactions between accounts to create a convoluted network that hides the original source of funds. Small transaction amounts (less than Rs 500,000) are used to avoid triggering alerts for suspicious activity. The illicit funds are routed through these shell companies.
d) Cryptocurrency: A key finding of the DoE investigation is that the proceeds from these fraudulent activities were mostly converted into cryptocurrencies. This conversion was a deliberate strategy employed by the accused to further conceal the source of the illicit funds and facilitate their transfer outside India. By converting the proceeds into cryptocurrencies and transferring them abroad, the perpetrators aimed to avoid detection, tracing, and recovery by law enforcement agencies.
e) Trafficking in Persons and Use of Foreign Jurisdiction:
The Golden Triangle, located at the intersection of Thailand, Laos and Myanmar, has long been known for illicit activities, including drug trafficking and human trafficking. Indian nationals are lured under the pretext of job offers and trafficked into this Golden Triangle, where they are exploited in cyber fraud operations, including this cyber investment scam. Criminal networks force victims to work in call centers or participate in online scams, under harsh and coercive conditions.
First published: September 9, 2024 | 1:13 PM IS
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