One of India’s law enforcement agencies has uncovered a money laundering operation involving fake invoices issued by purported shell companies in Singapore for software and other services.
The Enforcement Directorate (ED), which comes under India’s Ministry of Finance, said in a Feb 28 release that shell companies in India had paid the firms in Singapore using monies received from loan, gambling and betting apps controlled by “Chinese entities”.
“ED investigation revealed that proceeds of crime generated from the apps are aggregated and laundered through mule accounts opened in various banks in Kerala state using payment aggregators,” said the directorate, adding that the funds were channelled through multiple shell companies operating in Indian cities like Chennai, Bangalore, Delhi and Mumbai.
The directorate alleged that the firms used NIUM India, a subsidiary of global foreign exchange settlement platform NIUM Singapore, to move the funds, which included cryptocurrencies.
It added that this was done to conceal the monies from monitoring agencies.
ED said 1.23 billion rupees (S$19.9 million), suspected to be proceeds of crime belonging to Singapore shell entities and parked in bank accounts of NIUM India, have been frozen.
This followed raids on Feb 23 and 24 at 10 locations in the cities of Mumbai, Chennai and Kochi, which led the authorities to uncover a cluster of mule accounts in Kerala that were allegedly used to receive the criminal proceeds.
ED officers raided the premises of NIUM India and its directors in Mumbai, and firms including Xoduz Solution, Vikrah Trading Enterprises, Tyrannus Technology and Future Vision Media Solutions.
The investigation was initiated after the police in the states of Kerala and Haryana received reports from victims who were said to be exploited or cheated through the online platforms.
The raids resulted in the recovery and seizure of several digital devices, various documents, and multiple bank accounts used for laundering.
In response to queries from The Straits Times, a spokesman for Nium said it took compliance and the prevention of money laundering very seriously. It said it was cooperating fully with the ED to address the points noted in the complaint and to clarify misunderstandings of how it operates in India.
He added that the probe is not related to its Niam entity in Singapore and described it as an investigation “into certain transactions facilitated through (the Indian subsidiary), by alleged bad actors in India”.
The spokesman said that the Indian subsidiary is not licensed by the Reserve Bank of India to collect funds in India and does it through a licensed bank.
He added: “While this investigation is ongoing, we continue to fulfill all of our contractual and regulatory obligations in India and in all other countries we operate.
“We look forward to a timely resolution to this matter.”
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