Tue Nov 19 18:41:09 UTC 2024: ## Chennai: ED Arrests Two Chinese Nationals in Digital Loan App Scam
**CHENNAI, November 20, 2024** – The Enforcement Directorate (ED) has arrested two Chinese nationals, Xiao Ya Mao and Wu Yuanlun, in Tiruchi, in connection with a major digital loan app scam. The individuals were remanded to judicial custody until November 29th by a Chennai court.
The ED’s investigation stems from numerous complaints alleging predatory lending practices by several digital loan applications. Borrowers, who took out small loans ranging from ₹5,000 to ₹10,000, reported exorbitant interest rates, excessive processing fees, and harassment tactics employed by the app operators to recover the funds. Victims reported being threatened and abused, often forced into taking out further loans to cover outstanding debts, creating a debt trap.
The investigation revealed that Mao and Yuanlun, operating behind the scenes, used shell companies – M/s Toucolor Technologies Private Limited and M/s Truekindle Technology Private Limited – established in 2020 with dummy Indian directors. These companies used mobile apps to distribute loans. Upon loan default, borrowers’ personal data, including contact lists and photos, was used to harass them and their contacts.
The ED discovered that the Chinese nationals used cryptocurrency to launder the proceeds of the scam. Approximately ₹3.54 crore was received in cryptocurrency wallets between August and December 2020, subsequently used to disburse further loans. A total of ₹5.02 crore collected from borrowers in Indian bank accounts was then transferred to cryptocurrency wallets and siphoned off, with IP logs tracing the transactions to Hong Kong.
Earlier ED raids in the Delhi NCR, Chandigarh, Haryana, Punjab, and Gujarat resulted in the freezing of 96 bank accounts containing ₹19.43 crore. The investigation is ongoing.
First Piper 