MUMBAI: The Enforcement Directorate’s (ED) Mumbai zonal unit on Tuesday conducted searches at nine fintech firms in Delhi, Gurugram, and Haryana as part of its money-laundering investigation into mobile applications, including the Fairplay app, for the illegal streaming of cricket, including a few Indian Premier League (IPL) matches in 2023 and online betting on 2024 Lok Sabha election results. The fintech firms, acting as financial service providers for certain mobile applications, came under the scanner of ED due to their alleged involvement in monetary transactions related to the disbursement of betting proceeds to the players, agency sources said. The Fairplay app is allegedly linked as a subsidiary app to the Mahadev Online Book (MOB) platform, whose illegal online betting activities have been probed in a separate investigation by the ED since 2022.
ED’s probe against Fairplay Sports LLC and others is based on an FIR registered by the Mumbai police’s Nodal Cyber Police on the complaint of Viacom18 Media Pvt Limited under sections of the Indian Penal Code, the Information Technology Act for allegedly causing loss of revenue of over ₹ 100 crore, which is the proceeds of crime in ED’s case. The complainant had alleged that the matches were illegally streamed on Fairplay, and many celebrities had endorsed and promoted the betting application. The complainant had alleged that the accused online apps had shown Viacom 18’s content without acquiring legal rights for monetary gains thereby causing a loss to the company of over ₹ 100 crore.
ED’s probe has revealed that certain organisers of betting activities over the past six to 12 months have been allegedly employing an “improvised” modus operandi in conduct of involved monetary transactions, wherein a betting player’s money gets routed via mule bank accounts, which are acquired irregularly or on rental basis, but the proceeds or returns from such activities reach him via payment gateway - like cyber systems devised by financial services providers, to evade detection by/attention of financial regulators, agency sources said. Transactions related to betting proceeds delivered to players are allegedly inconvenient when done via mule bank accounts as they can get noticed as “suspicious transactions” and such accounts therefore are dynamic and keep changing, the sources said. Many such mule bank accounts had been detected during ED’s and Chhattisgarh police’s probes related to the MOB network’s alleged betting activities, the sources added.
In June this year, ED carried out searches at 19 locations across Mumbai and Pune and seized movable assets, including cash, bank funds, Demat account holdings and luxury watches, estimated to be worth around ₹ 8 crore in the case. ED’s probe had revealed that Fairplay had allegedly made pacts through foreign-based entities located in Dubai, United Arab Emirates, and Curacao, with Indian agencies representing celebrities. The probe found that no due diligence had been performed by Indian agencies concerning Fairplay before executing the agreements for its promotion, the sources said.
Further, it was revealed that Fairplay had allegedly collected funds through various bogus/shell bank accounts, which in turn were layered through a complex web of bank accounts of shell entities and were then accumulated in pharmaceutical firms involved in bogus billing, the sources said. Funds from such firms were then allegedly diverted to overseas shell entities located in the Hong Kong Special Administrative Region, China and Dubai. “More than 400 bank accounts of shell entities were found to have been used for these purposes, which are under examination, along with the trail of and utilisation of funds gathered from the lay public by Fairplay,” an agency source said.
.
