The Enforcement Directorate (ED) carried out search and seizure operations against foreign registered online gaming companies operating in India.
The probe agency raided 25 premises in five different states – 11 in Delhi, 7 in Gujarat, 4 in Maharashtra, 2 in Madhya Pradesh and 1 in Andhra Pradesh – for alleged violations of the provisions of the Foreign Exchange Management Act, 1999.
While these online gaming companies are registered in small island countries like Curacao, Malta and Cyprus, 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 ED says in a statement.
The amount collected from the general 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 imports of services or goods, the probe agency says.
Remittances out of the income from racing, riding, etc., or any other hobby are not allowed under the provisions of FEMA, 1999, according to ED.
"In this connection, searches were conducted at premises linked to several Hawala operators including that of Ashish Kakkar, Neeraj Bedi, Arjun Ashwinbhai Adhikari, Abhijeet Khot and the persons/entities associated with them. Searches have resulted in seizure of several incriminating documents / electronic evidences related to case and revealing of interesting modus adopted by them to evade investigative agencies," the ED says.
Hundreds of companies have been opened by key persons in the name of their employees for layering and sending remittances to the tune of around ₹4,000 crore in the guise of payments for the import of goods and services, the investigating agency says.
Several PAN cards, Aadhaar 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 ED says.
"To escape themselves from investigating agencies, they are using remote-based server/laptops which are being used through remote access apps like Anydesk, Team Viewer etc. In the instant case two such remotely accessed laptops have also been recovered and seized from the premises of entity providing server services located far away from the actual operational places," it says.
Seizures made during searches include incriminating documents and electronic devices establishing foreign outward remittances of thousands of crores collected from the public through gaming websites using accounts of dummy firms opened in the name of proxy persons who are not linked with the gaming activities, the ED says.
₹19.55 lacs in cash, $2,695, and 55 bank accounts of firms being used for layering and remitting income generated from online gaming in the guise of remittances against imports of goods and services have also been frozen, the agency says.