Kohima, April 30 (IANS) The Enforcement Directorate (ED) on Thursday said it has filed a second supplementary prosecution complaint before the Special Court for PMLA cases in Dimapur, Nagaland, in connection with the HPZ Token cryptocurrency investment scam.
The case has its genesis in three FIRs registered by the Cyber Crime Police Station, Kohima, Nagaland; the CID PS, Ulubari, Guwahati; and the CBI, Delhi. Accordingly, an ECIR was registered on April 12, 2022.
The Main Prosecution Complaint, dated March 4, 2024, was the first complaint filed in this case, followed by the first Supplementary Prosecution Complaint, filed on January 12, 2026.
The present Second Supplementary Prosecution Complaint has been filed in continuation of the ongoing investigations in the case.
HPZ Token was an app-based cryptocurrency investment scheme that lured gullible investors across India with false promises of exponential returns through investment in Bitcoin mining machines.
The scam commenced in June 2021, and the perpetrators shut down the platform in August 2021, leaving thousands of investors without access to their funds.
As per earlier investigations, Bhupesh Arora and his associates were alleged to be the key conspirators behind the HPZ Token Scam, who used a network of shell entities, mule accounts, hawala operators, and foreign currency exchangers to launder the Proceeds of Crime collected from a large number of gullible investors.
The Second Supplementary Prosecution Complaint has brought on record 87 new accused, in addition to the 350 already named in the Main PC and the first Supplementary PC, bringing the cumulative total to 437 accused.
The newly added accused include payment gateway companies, fintech intermediaries, e-commerce entities, and their directors spread across multiple states.
A notable pattern emerging from the Second Supplementary Prosecution Complaint is the continued trail of Chinese-linked entities that have been used to collect and layer Proceeds of Crime. The web of interconnected entities, many sharing common addresses, email IDs, and directors, points to an organised, pre-planned money-laundering operation.
During investigations, it has been found that one such Chinese-linked entity, M/s Zhudao Infotech Private Limited, run by Ming Lou, General Manager, and Jian Li, Director, was acting as a payment aggregator which was facilitating the routing of the Proceeds of crime that were collected through online gaming/betting/ponzi investment scams, not limited to the HPZ Token scam.
M/s Zhudao Infotech Private Limited was found to be running illegally without the license of the RBI. It onboarded several bogus/paper entities on its platform through which the Proceeds of Crime were laundered. Several of these concerns were not operating at their registered addresses.
The investigations also revealed that the Directors in these onboarded merchants (bogus concerns) were dummy directors who had been paid meagre amounts for lending their names as Directors.
Multiple Chinese nationals have been named across the three Prosecution Complaints, including Linlei Yuan (M/s Magic Data Technology), Zhou Jie (M/s Larting Pvt. Ltd.), Ms. Wan Jun (M/s Jilian Consultants), Ming Lou, Jian Li (M/s Zhudao Infotech), Yanpeng QU (M/s Mad-Elephant Network Technology), Yi Liu (M/s Omelette Technology), Kevin Huang (M/s Adexter Concepts), among others.
On similar lines, M/s Paygate India Pvt. Ltd, M/s Safexpay Technology Private Limited, M/s Virtous Payment Solutions LLP, M/s Intrapay Product Solutions, M/s IECS Consultancy Ltd., through its KMPs Ravi Shankar Gupta, Aditya Oberoi, Pankaj Tripathi, Joy Oberoi, have allegedly helped in the laundering of the Proceeds of Crime through the misuse of the payment gateway infrastructure and floating dummy entities.
As per the investigations, these entities acted as payment gateway companies whose infrastructure was allegedly misused to layer Proceeds of Crime generated through the HPZ Token scam and other illegal online gaming/betting/ponzi investment schemes.
The investigations have revealed the use of sophisticated layering techniques through a multi-tiered web of fintech companies, payment gateways, e-commerce entities, gaming companies, and cryptocurrency assets to obscure the origin of illicit funds.
The Proceeds of Crime in the matter have been identified to be Rs 2200 crore (approx.). During the course of the investigation, ED has attached/frozen more than Rs 662 crore of POC till date.
Further investigation is now underway.
–IANS
sc/dan