HPZ Token Scam Case: ED Dimapur attaches assets worth Rs 41.83 Cr

August 13, 2024 9 Views No Comment

Rs 497.20 Cr frozen under the case so far

Morung Express News
Dimapur | August 13

The Directorate of Enforcement (ED), Dimapur Sub Zonal Office has attached movable and immovable assets worth Rs. 41.83 crore belonging to various persons and shell entities.

The concerned persons and shell entities were found to be involved in duping investors of hundreds of crores in the money laundering case against “HPZ Token & others,” stated an official release.

The ED initiated an investigation based on a First Information Report (FIR) registered by Cyber Crime Police Station, Kohima under various sections of the Indian Penal Code (IPC), 1860 and the Information Technology Act, 2000.

The FIR was filed in relation to “duping gullible investors, in the guise of promising astronomical returns on investing money for ‘mining of Bitcoin and other cryptocurrencies,’ for which an app-based token by the name of ‘HPZ Token’ was used,” the ED said.

Investigations revealed that in a similar manner thousands of investors have been duped, it added.

Modus Operandi
As per the ED, the modus operandi of the fraudsters was to first lure the victims to invest in the company under the pretext of doubling their investment through the app HPZ Token and also through online gaming and betting websites.

In order to receive investments, various bank accounts and Merchant IDs were opened in the name of various shell entities with dummy directors or proprietors, it said.

These mechanisms were used for the sole purpose of rotation or layering of proceeds of crime representing funds fraudulently received for investment in Crypto Mining and illegal online gaming and betting platforms, it added.

For instance, for an investment of Rs 57,000, the fraudsters would promise returns of Rs 4000 per day for 3 months, the ED explained.

Initially, returns were paid to gain the confidence of investors and simultaneously lucrative offers of fresh investments were proposed leading to more investments by gullible investors, it noted. Thereafter, the funds collected were siphoned off.

According to the ED, the scam started in June 2021 and by August 15, 2021 the “HPZ App” and related websites became inaccessible.

The present action of attachment of proceeds of crime is in continuation of earlier action when the ED Dimapur Office had conducted searches at 44 locations throughout the country and frozen balances totalling Rs 176.67 Crore maintained by shell entities in various banks/virtual accounts and attached assets worth Rs 278.70 Crore, it added.

So far, the total proceeds of crime frozen and attached by the ED in this case is Rs 497.20 Crore.

Further investigation is under progress, the ED added.

Earlier on March 6, 2024, the ED had informed that it filed a Prosecution Complaint before the Special Court, Prevention of Money Laundering Act, 2002 (PMLA), Dimapur against 299 accused persons and entities.

The accused included 76 Chinese-controlled entities (in which 10 Directors are of Chinese origin) and 2 other entities controlled by other foreign nationals, it said.

The PMLA Special Courtthen took cognisance of the offence of money laundering noting that a prima facie case has been made out under PMLA, 2002 against the said 299 accused persons, it added.