The Enforcement Directorate raided some payment gateways and others in connection with its ongoing money laundering investigation. The investigation involves alleged financial irregularities in instant app-based loans “controlled” by Chinese people.
Searches are being conducted in three states for buildings connected to certain payment gateway operators, companies involved in loan apps, and operators.
In a statement, Paytm said the searches were linked to the same case earlier this month.
The ED wants information about certain merchants from various payment service providers, so we’ve shared what they need”, Paytm said.
As part of its investigation, the federal agency raided Bengaluru-based payment gateways like Paytm, Razorpay, and Cashfree on September 2.
During the raids, they said, money worth Rs 17 crores was seized from merchant IDs and bank accounts.
Nirmala Sitharaman discussed illegal loan apps with top ministry and RBI officers on September 8 and decided to take measures to stop them.
Ever since the COVID-19 pandemic broke in the country in 2020, these payment gateways have been in the crosshairs of the ED.
An investigation was initiated by the ED under the PMLA’s criminal sections after a couple of gullible debtors ended up dying from all over the country, and the police said the loan app companies harassed them by publicizing their phone numbers and taking high-handed methods to coerce and harass them.
These companies allegedly obtained all personal details of the loan-taker when these apps were downloaded on their phones even as their interest rates were “usurious”.
These payment gateways were used to route alleged proceeds of crime in the case. According to the ED, their “modus operandi” is to make dummy directors and use forged documents to generate “proceeds of crime”.
“These entities are controlled/operated by Chinese people.” “We have noticed that these entities are doing their suspected/illegal business through various merchant IDs/accounts held with payment gateways/banks,” the ED said.
It said, “premises of Razorpay Pvt Ltd, Cashfree Payments, Paytm Payment Services Ltd, and entities controlled/operated by Chinese people are included in the search operation.”
Those under investigation generated proceeds of crime using several merchant IDs/accounts with banks/payment gateways, and they don’t operate from the MCA (ministry of corporate affairs) website/registered addresses, the agency said.
ED found these companies had fake addresses. In this case, the ED logged 18 FIRs filed by Bengaluru Police cyber crime station against numerous entities/persons who have been involved in extorting people and harassing people who have used their mobile apps to get small loans.