ED freezes funds worth over Rs 51 cr in mobile apps money laundering case

ED frozen funds worth Rs 51.11 crore under anti-money laundering law after raiding premises linked to a mobile app company that allegedly duped investors on pretext of providing "very high" returns

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The Enforcement Directorate on Wednesday said it has frozen funds worth Rs 51.11 crore under the anti-money laundering law after raiding premises linked to a mobile app company that allegedly duped investors on the pretext of providing "very high" returns.

The searches were carried out on December 9 at locations in Noida, Pune and Bengaluru in the case of "misuse" of Matrix Partners Fund (MPF) app and some other apps related to it.

The money laundering case stems from a November 2021 FIR filed by the Meghalaya Police against entities/persons behind the MPF app.

The MPF app was a "scam investment application which promised very high returns, thereby luring gullible investors throughout the country to invest their hard-earned money in false expectation of high returns", the ED said in a statement.

"During investigations, it has emerged that a large number of companies were connected to this app, which ran many other apps related to investment scams, loans, games, betting, rummy etc.

"The modus operandi of these entities is to register companies by using forged documents and making dummy directors of these entities, creating mobile apps and then generating proceeds of crime by collecting money through various payment gateways by faking/mis-declaring the nature of business related to the apps," the agency said.

These entities, after creating the apps and opening bank accounts, used to register themselves on various payment gateways as merchants. Then they collected and disbursed money to the public using the payin and payout features of the payment gateways, it said.

Initially, people used to get good returns or rewards and they invested more money. After a period, when a huge amount of money was collected, the people behind these apps deactivated them and disappeared with the ill-gotten money, the ED probe found.

"These companies were also found not to be operating from the addresses given on the MCA (Ministry of Corporate Affairs) website/registered address and had fake addresses, just like the dummy directors," it said.

An amount of Rs 51.11 crore kept in merchant IDs and bank accounts of these entities who were behind the MPF app and others has been frozen during the searches, the ED said.