On Thursday, one of the main suspects in the Rs 1,200 crore fake crypto scam busted by the Enforcement Directorate in January was arrested in Kerala by the bureau.
As per reports, the accused has been identified as Abdul Gafoor. Abdul, a native of Malappuram(Kerala) has been kept in detention by the PMLA (Prevention of Money Laundering Act ) court in Kozhikode.
It is revealed that the central agency would approach the court seeking his custody for interrogation on Monday, the sources added.
Reportedly, Gafoor is the director of an inactive company (shell entity) Stox Global Brokers Private Limited, based in Malappuram. They said he had been actively involved in allegedly drawing money illegally from people who were coaxed with fake crypto investment offers. Eventually, their money was put in the shell company.
“Around Rs 39 crores were transferred through Stox Global Brokers Pvt Limited. The accused was remanded in judicial custody by the special court for considering PMLA cases. ED has filed a custody application before the court and it will be heard on Monday,” said an official source.
In a press statement, ED disclosed that it had traced assets amounting to approx Rs 37 crore from Nishad and his associates. The assets included balances in Nishad’s multiple bank accounts, and his companies. It also included immovable property including the land of an associate close to Nishad and money(in rupees) equal to cryptocurrencies purchased out of the gains of crime.
Earlier, the ED had also identified Nishad k as the kingpost of this racket that allegedly cheated around 900 investors amounting to Rs 1,200 crore.
However, Nishad has managed to sneak off from the country after the ring was busted. Eventually, the ED traced his properties in Malappuram.
The scam came to the agency’s notice last year after the cops in Kannur and Malappuram districts registered several cases against Nishad and others under Section 420 (Cheating) of IPC, the Prize Chits and Money Circulation Schemes (Banning) Act.
ED sources said that the fraud allegedly took place in 2020, during the Covid lockdown period. Apparently, the victims were made to purchase a non-existent crypto currency called “Morris Coin”, which was listed with a Coimbatore-based cryptocurrency exchange called ‘Franc Exchange’. This was done in an initial public offering purchase-like manner.
Further, ED sources also revealed that initially, 10 Morris coins were valued at Rs 15,000 with a lock-in period of 300 days. The investors were, later, given an e-wallet and were informed the coin value would shoot up when traded in the exchange.
But, the accused then siphoned the money from investors and illegally invested them in properties in Kerala, Tamil Nadu and Karnataka, particularly in real-estate by hiding any source of income.
Crypto has increasingly become the gateway for crimes like money laundering and also tax evasion, something that remains the subject of concerns for Banks and Judiciary bodies alike. Recently, the Indian IT department revealed that the huge crypto transactions of about 700 investors who have evaded tax, have come to their notice.
