Loan app scam: Chinese national, aide held for extorting money from people across India

New Delhi, Nov 9 The Intelligence Fusion & Strategic Operations (IFSO) Unit of Delhi Police's Special Cell has arrested two persons including a Chinese national for extorting money from people through instant loan applications, an official said on Wednesday.

The accused have been identified as Chinese national Yu Zhang, the mastermind behind the extortion racket and Vineet Jhaver, a resident of Haryana.

The police said that so far more than Rs 150 crore have been siphoned off through accounts provided by Vineet and Zhang.

In August this year, the IFSO unit had busted various modules of instant loan applications having a Chinese connection, and arrested 22 people for allegedly siphoning off Rs 500 crore to China by the hawala route or by investing in crypto-currency.

The police said that multiple complaints were being received at the NCRP portal that instant loan applications are disbursing loans at higher rates and even after repayment of the loan, they are extorting money using morphed nude pictures.

"IFSO took cognizance of the same and started analyzing the complaints at NCRP. During the analysis of the complaints, it was found that more than 100 such apps are involved in the loan and extortion racket," said Prashant Gautam, Deputy Commissioner of Police (IFSO).

"It was also found that all the apps were seeking access to personal data from the user. After obtaining access to personal data like contacts, chats, messages and images of the user, the same were being uploaded to the servers in India and abroad," said the DCP.

"Applications were developed in the garb of loan providing apps. These applications were malicious in nature and sought all permissions from the user. Applications were hosted on Google Play and websites. Users in need of a loan downloaded the applications by granting all the permissions. Soon after this, the application started uploading the contact lists, chats, images of the user to the servers hosted in China and other areas," said the DCP.

"This data was also sold to different private firms. The customers were receiving calls from different numbers (procured on fake IDs) forcing them to pay more and more by threatening them using the morphed pictures. Due to fear and stigma, the users began paying them money in different bank accounts opened against fake IDs," said the official.

"The money collected was diverted to specific bank accounts and then sent out of the country through Hawala or after purchasing cryptocurrencies. People who were in dire need of a small loan ranging from Rs 5,000 to Rs 10,000 were being forced to pay even in lakhs," said the official.

"Many incidents of citizens committing suicide were reported from various parts of country. The financial trail revealed that multiple mule accounts were being used for getting the amount. In each of the accounts, huge transactions were found to be credited everyday," said the DCP.

"It was found that the network is spread across Delhi, Karnataka, Maharashtra, Uttar Pradesh, Gujarat and other parts of the country. Earlier, in similar cases, 22 persons have been arrested and with further investigation the mastermind in the present case, a Chinese national, along with an Indian accomplice has been arrested," said the DCP.

"On interrogation, it has been revealed that they were operating at the behest of other Chinese nationals. The application analysis has also revealed that some of the applications were uploaded from China. Identities of other Chinese nationals in these cases are being established and efforts are being made to trace and arrest them," he said.