The Enforcement Directorate (ED) has conducted searches against foreign-registered online gaming companies and websites at 25 locations in Delhi, Gujarat, Maharashtra, Madhya Pradesh and Andhra Pradesh for suspected violations under the Foreign Exchange Management Act (FEMA), involving about ₹4,000 crore.
The agency has frozen 55 bank accounts of firms allegedly being used for layering and remitting overseas the income generated from online gaming in the guise of remittances against import of goods and services.
While 11 premises have been searched in Delhi, seven are situated in Gujarat, four in Maharashtra, two in Madhya Pradesh and one in Andhra Pradesh.
“These online gaming companies/websites are registered in small island countries like Curacao, Malta and Cyprus. However, all of them are linked to the Indian bank accounts opened in the name of proxy persons who have no links with online gaming activity,” said the agency on Wednesday.
As alleged, the amount collected from the people through the gaming websites was allegedly being routed via multiple bank accounts and finally remitted out of India by mis-declaring the purpose of remittances against so-called import of services or goods. “Remittances out of the income from racing/riding, etc., or any other hobby are not allowed under the provisions of FEMA,” the ED said.
In this connection, the agency searched the premises linked to several “hawala operators”, including that of Ashish Kakkar, Neeraj Bedi, Arjun Ashwinbhai Adhikari, Abhijeet Khot and their associates. The searches have resulted in the seizure of incriminating documents and electronic evidence related to the case, revealing the modus operandi adopted by the suspects to evade detection by the investigative agencies, the agency alleged.
According to the ED, hundreds of companies have been floated by the key persons in the name of their employees for layering and sending remittances to the tune of ₹4,000 crore in the guise of payments for import of goods and services.
“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,” said the agency.
The suspects were using remote based servers and laptops with the help of applications such as Anydesk and Team viewer to conceal their location. “In the instant case, two such remotely accessed laptops have also been recovered and seized from the premises of an entity providing server services located far away from the actual operational places,” it said.
The seized evidence has also established foreign outward remittances running into thousands of crores collected from the users through gaming websites using the accounts of dummy firms opened in the name of proxy persons. Following the searches, ₹19.55 lakh in cash and $2,695 have also been seized.