From mule accounts to cryptocurrency, ED tracks how Parimatch routed users’ funds, freezes Rs 110 crore
The Enforcement Directorate (ED) has frozen Rs 110 crore in various bank accounts as part of an ongoing probe into the Cyprus-based illegal online betting platform Parimatch, the central agency said on Thursday.
The development comes after the ED conducted search operations at 17 locations, including Mumbai, Delhi, Noida, Jaipur, Surat, Madurai, Kanpur and Hyderabad, on Tuesday under the Prevention of Money Laundering Act (PMLA), 2002. In addition to the Rs 110 crore, various incriminating documents and digital devices were seized during the search, officials said.
The ED initiated its investigation into Parimatch on the basis of a First Information Report registered at a cyber police station in Mumbai for allegedly duping users through its online betting platform. As per the agency, the platform defrauded investors by luring them with promises of high returns, generating over Rs 3,000 crore in a year, as revealed by the investigation to date.
According to the ED, the searches revealed that Parimatch routed users’ funds through mule accounts using different strategies across the country. In one case, funds deposited by users into mule accounts were allegedly withdrawn in cash in a specific locality in Tamil Nadu. This cash was allegedly handed over to hawala operators, who used it to recharge virtual wallets of a UK-based company. These wallets, as per the ED, were then used to buy USDT cryptocurrency in the name of mule crypto accounts, which were operated by Parimatch agents.
In western India, Parimatch engaged the services of domestic money transfer (DMT) agents, according to the ED. Funds collected in mule accounts controlled by these DMT agents were allegedly sent to Parimatch agents through payments made by mule credit cards.
More than 1,200 such credit cards were found and seized from a single location, an official said.
The ED investigation has also uncovered that payment companies, whose applications for payment aggregator licenses were rejected by the RBI, offered their services to Parimatch in the garb of technology service providers (TSPs) and offered their application programming interface (API) to facilitate user fund collections.
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These TSPs allegedly offered the APIs to Parimatch agents who onboarded mule accounts opened in the name of e-commerce companies and payment solution provider companies for the collection of funds from users.
This money was layered and transferred out in the garb of e-commerce refunds, chargebacks, vendor payments, etc., effectively concealing the actual flow and purpose of funds, the ED said.
According to the agency, Parimatch gained visibility through aggressive marketing, including sponsorship of sports tournaments and partnerships with celebrities. They allegedly also set up Indian entities to run surrogate advertisements under the names ‘ParimatchSports’ and ‘Parimatch News’. Payments to these agencies were made via foreign inward remittances, the ED said.