The Enforcement Directorate (ED) on Wednesday said it detected illegal foreign remittances of about Rs 4,000 crore after it carried out multi-state raids against foreign-registered online gaming websites and companies operating in the country in alleged violation of the foreign exchange law.
In a statement, it said that Rs 19.55 lakh and more than USD 22,600 in cash were seized apart from freezing 55 bank accounts during this operation carried out under the provisions of the Foreign Exchange Management Act (FEMA).
The searches were carried out on May 22-23 at 25 premises in Delhi, Gujarat, Maharashtra, Madhya Pradesh and Andhra Pradesh.
The federal probe agency said the raids led to the finding that these online gaming companies and websites were 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 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 import of services and goods.”
“Remittances out of the income from racing/riding etc., or any other hobby are not allowed under the provisions of FEMA, 1999,” it said.
The ED 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 Rs 4,000 crore in the guise of payments for import of goods and services”.
Several PAN (permanent account number issued by the income-tax department) cards, Aadhaar cards used for creating such firms, mobiles used for operating bank accounts of these firms and office stamps have been seized, it said.
Some 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, it said.
To escape from investigating agencies, they are using remote-based server/laptops which are being used through remote-access apps like Anydesk, Team viewer etc, the ED found.
The agency seized two such remotely accessed laptops from the premises of an entity providing server services located far away from the actual operational places.
It said “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, Rs 19.55 lakh cash, USD 2,695 (about Rs 2.2 lakh as per current exchange rate) and 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 have been freezed.
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