Enforcement Directorate Cracks Down on Chinese Loan Apps, Arrests Two in Kerala
In its ongoing crackdown against Chinese loan applications, the Enforcement Directorate (ED) has arrested two suspects from Kerala, claiming that they arranged approximately 500 mule bank accounts to launder about ₹719 crore of victims’ money. The individuals, identified as Sayid Muhammad and Varghese TG, have been booked under the stringent Prevention of Money Laundering Act (PMLA), 2002, and are also accused of opening 26 cryptocurrency accounts on WazirX, which were reportedly used to transfer ₹115.67 crore offshore.
The arrests are a result of multiple FIRs filed by victims in Kerala and Haryana, who allege that the loan app operators extorted money by employing various tactics, including soliciting advance EMIs and blackmailing victims using private data stolen from their mobile phones.
According to ED officials, the arrested suspects received substantial remuneration for their involvement, reportedly about ₹2 crore and ₹70 lakh, respectively, for creating these illicit accounts. The investigation revealed that a portion of the proceeds of crime (POC) was funneled to Singapore through normal banking channels and via Nium India Pvt. Ltd., disguised as fictitious software imports.
In February 2024, the ED conducted extensive searches at over 10 locations across Mumbai, Chennai, and Kochi, seizing multiple electronic devices containing incriminating evidence. During these operations, funds totaling ₹123.58 crore in various accounts linked to the scheme were frozen, with authorities pledging to continue the investigation to dismantle this extensive international fraud network.
In a separate case, the ED apprehended four individuals from Tamil Nadu last month, also linked to fraudulent Chinese loan applications. This revelation uncovered shell companies associated with them that transferred over ₹170 crore to Chinese operators via Singapore in 2023. This case, registered in February 2024, followed multiple FIRs filed at various police stations in Kerala against these bogus loan applications.
Among the arrested is Raphael James Rozario, a resident of Vypeen, who allegedly facilitated the creation of mule bank accounts for individuals in financial distress in exchange for commissions. ED officials noted that various Chinese loan apps are being aggressively promoted on social media, often advertising “easy loans.” Users who install these applications unwittingly grant access to sensitive information on their mobile devices. Investigations have also uncovered numerous fraudulent gambling and investment applications linked to mule accounts established in India with the assistance of Rozario.
The ED’s efforts illustrate a concerted action against the illegal operations of Chinese loan apps and the broader fraudulent networks they may be connected to. The investigation continues as authorities aim to bring further accountability to such schemes, protecting potential victims from future exploitation.