ED raids 25 locations against foreign-registered online gaming portals

The Enforcement Directorate (ED) on Wednesday said it detected illegal foreign remittances of about Rs 4,000 crore after it carried out multi-state raids against foreign-registered online gaming websites companies operating in the country in alleged violation of the foreign exchange law.
 

In a statement, it said that Rs 19.55 lakh more than $ 22,600 in cash were seized apart from freezing 55 bank accounts during this operation carried out under the provisions of the Foreign Exchange Management Act (FEMA).

 

The searches were carried out on May 22-23 at 25 premises in Delhi, Gujarat, Maharashtra, Madhya Pradesh Andhra Pradesh.
 

The federal probe agency said the raids led to the finding that these online gaming companies websites were registered in small islcountries like Curacao, Malta Cyprus.

 

“However, all of them are linked to Indian bank accounts opened in the name of proxy persons who have no links with online gaming activity. The amount collected from the general public through gaming websites is then routed through multiple bank accounts finally remitted out of India by mis-declaring the purpose of remittances against import of services goods.”
“Remittances out of the income from racing/riding etc., or any other hobby are not allowed under the provisions of FEMA, 1999,” it said.
 

The ED said it found that “hundreds of companies were opened by the key persons in the name of their employees for layering sending remittances to the tune of about Rs 4,000 crore in the guise of payments for import of goods services”.

 

Several PAN (permanent account number issued by the income-tax department) cards, Aadhaar cards used for creating such firms, mobiles used for operating bank accounts of these firms office stamps have been seized, it said.
 

Some key persons were found using international virtual mobile numbers for instant messaging apps like WhatsApp, Telegram, Signal etc. using pseudo-names such as Pablo, John, Watson etc. for “masking” their actual identity, it said.

 

To escape from investigating agencies, they are using remote-based server/laptops which are being used through remote-access apps like Anydesk, Team viewer etc, the ED found.
 

The agency seized two such remotely accessed laptops from the premises of an entity providing server services located far away from the actual operational places.