Chinese loan app fraud case: Delhi police arrest three more persons

The IFSO Unit, Delhi Police Special Cell, has further arrested three more persons on Monday in the Chinese loan app fraud case. On Sunday they arrested eight people for allegedly extorting money from people using their morphed pictures obtained through a bugged loan app, officials said.

Here’s what we know about it:

The scam

The app ‘Cash Advance’ (Danakredit), available for download on Play Store, offered loans to users. But what it really did was install a malware in the users’ phone to access their private data.

Police said that the app was used to install malware into the users’ phone to get their details, contacts, and pictures, all of which would then be sent to a third party for extortion.

According to a Times of India report, during technical probe, police found that the syndicate provided easy loans through their Android app without KYC verification. They promised that the loans would be available in a very short span, sometimes immediately. The interest skyrocketed accordingly.

Moreover, they didn’t provide the full loan amount and charged the victims exorbitantly on different pretexts. “If the loan amount was Rs 6,000, then they deducted around Rs 2,300 as service and other charges. The victim received only Rs 3,700,” DCP (Special Cell) KPS Malhotra explained.

“The Cash Advance app was also connected to a China-based server by creating a proxy in the Android device. The owner didn’t give legitimate information regarding the developer organisation or company on Google Play Store,” Malhotra added.

How was it unearthed

The scam was exposed when a Delhi-based woman, a victim of the app, filed a complaint with the police alleging that she was being harassed by a few people for money.

The woman in her complaint said that she had taken a loan from Cash Advance app and had paid the money back.

But afterwards, she began getting calls for money from some people, who used abusive language with her and even sent her morphed pictures to her family and friends.

According to police, the woman alleged that one of the accused used picture of a senior IPS officer for his WhatsApp profile.

On the basis of the woman’s complaint, a case was registered and the money trail of alleged transaction was figured out.

What police found out

The Intelligence Fusion and Strategic Operations (IFSO) unit of the Delhi Police busted the racket. According to the police, the extorted money was routed to accounts in China, Hong Long, and Dubai by way of cryptocurrencies.

They said the eight accused were arrested from Delhi, Jodhpur, Gurugram, and other parts of the country.

It was found that the money was being transferred to a current account opened in the name Balaji Technology’, a motorcycle repair shop, which was owned by one Rohit Kumar, a senior police officer said.

Police found that the account was used to funnel approximately Rs 8.45 crore in just 15 days to other accounts.

In all, police identified 25 more such accounts and froze them, he said.

Subsequently, raids were conducted on 13 March in Pitampura and Rohini from where police arrested four people involved in the scam, Deputy Commissioner of Police (IFSO) KPS Malhotra said.

The accused were identified as Rohit Kumar, Vividh Kumar, Puneet, and Manish. Their mobiles and other devices used in the crime were also recovered from them. Later, two more accused, a man named Puneet Kumar and a woman, who remains unidentified, were arrested, along with one Krishna, who was identified as the mastermind of the whole operation, he said.

Krishna was arrested from Jodhpur in Rajasthan on 14 March, police said. Krishna, the mastermind in India, provided all the bank accounts to one Chinese national. It was revealed that all extortion money was being sent to China through cryptocurrency by him.

Crypto accounts of three Chinese nationals have been identified,” the officer said. Later, police arrested another accused, Sumit, from Gurugram.

Sumit ran the operation to make WhatsApp calls through a number obtained using fake documents. When interrogated, he led the police to another accused, Kartik Panchal, whom he identified as the team leader of the operation. Panchal too was arrested, police said.

“We found that Panchal was running a team of callers who used to make calls to the loan seekers. It was also found that the accused morphed and edited pictures of women and sent them to their contacts to extort money from them,” Malhotra said.

The loan app brandished a fake NBFC agreement and privacy policy and attracted clients with special offers, he said.

“Eight accused have been arrested so far. More victims are being identified and the remaining members of the syndicate are being traced,” the DCP said.

The officer said that the police have frozen about Rs 11 lakh across accounts , and have seized Rs 4 lakh in cash found on the accused.

Past examples

Last year in January Google removed more than 30 money-lending apps that did not comply with the country’s banking regulations from its Android Play Store following directions from the Reserve Bank of India (RBI) to monitor the glut of fintech applications hosted on the search giant’s platform.

With input from agencies