The Enforcement Directorate has arrested a person in connection to a money laundering and fake cryptocurrency case from Kerala where around 900 investors were cheated to the tune of Rs 1,200 crores.
In a press release, the ED said that it arrested Abdul Gafoor on March 24, for operating as a stockist in a multi-level marketing scam and getting victims to invest in a fake cryptocurrency called Morris Coin. This arrest comes after the attachment of properties of Nishad K, considered to be the main accused in the Morris Coin cryptocurrency case. The ED said that Gafoor was appointed by Nishad as a ‘pin stockist’ after the former invested Rs 10 lakhs of his own money in the MLM scam. Gafoor was also promised a commission of 5% on investments.
“They made aggressive enrolment of new member into an illegal money circulation scheme under the garb of multi-level marketing, resorted to the fraudulent practice of investing the money received from the investors in the Morris Coin Cryptocurrency plan run by Nishad and others,” the ED said.
There has been an increasing number of cryptocurrency scams being reported in the country. For instance, a parallel investigation of another cryptocurrency scam in Pune is ongoing, the two accused in this scam siphoned off over 200 Bitcoins, according to an Indian Express report.
Siphoned-off money was used to buy properties: ED
According to an IE report, Kerala’s Mallapuram-based Gafoor was allegedly, actively involved in siphoning money from people who were lured with fake crypto investment offers and then, diverting their investments into shell companies.
After accruing the money, the IE report added that the money was illegally invested in immovable properties in Kerala, Tamil Nadu, and Karnataka, without showing any source of income. “The money obtained was used for the purchase of immovable properties, for the purchase of various other Crypto currencies, for the purchase of luxury cars and for spending in luxury hotels and resorts,” the ED added.
Gafoor was arrested because he facilitated the “placement and layering of the proceeds of crime” and also because he was one of the directors of M/S Stoxglobal Brokers Pvt Ltd – a shell company, the agency said.
On March 25, Gafoor was produced before a Prevention of Money Laundering Special Court which sent him to judicial custody with a directive to file a remand application on March 26, ED said. The Court also granted ED custody of the accused till March 31. MediaNama reached out to the ED with additional queries regarding the matter, but we are yet to receive a response.
Main accused wooed victims with promotional events
“The money laundering investigation carried out so far revealed that Nishad K through his various companies such as M/s Long Rich Global, M/s Long Rich Technologies and M/s Morris Trading Solutions collected deposit money from the investors in the guise of Initial Coin Offer for the launch of Morris Coin Crypto Currency,” said a press release by the ED from January.
The agency said the Nishad impressed investors by conducting promotional events with celebrities. Investors were also introduced to “flashy websites” with the provision of e-wallets to each investor via web-based applications, the release added. The collected money was siphoned through shell companies.
In January, ED attached Nishad’s assets worth Rs 36,72,27,752, which include multiple bank accounts, immovable property including land, and the INR equivalent of cryptocurrencies purchased out of the proceeds of the crime. These were the cryptocurrencies (total valued at Rs 25.82 lakhs) that were found to be in his possession —
- Ethereum – 5.92387265
- BTC – 0.08267646
- BNB – 5.51232875
- YFI – 0.023062
- VET – 4284.4
- ADA – 226.479601
- USDT – 35.88576551
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