The Enforcement Directorate (ED) and Director General of GST Intelligence (DGGI) are investigating operations of many betting and gambling companies according to a report on Times of India.

Investigators are said to be struck at identifying the actual culprits as the entities operate through a maze of shell companies and the key employees operate only through emails without establishing full identities. Even the India based employees are not aware of full identities of their reporting managers located outside India.

PariMatch, an Ukranian based betting platform which advertises in many local leagues for example communicates with local personnel, media agencies only through emails and telephone. It is often the case that PariMatch officials don’t disclose full identities. In April, we reported of crackdown on PariMatch by GST department and arrest of one of the directors.

Further, the transactions are undertaken in cryptocurrencies to launder money out of the country. DGGI investigating into the operations froze nearly 400 bank accounts mainly belonging to shell companies.  Reports also indicate that a director of a payment aggregator firm has been recently arrested by DGGI.

Almost all the bank accounts belong to drivers, peons, daily wage labourers, road side vendors whose identity details are used for a nominal fee. The individuals concerned are not aware of transactions in huge volumes in their name. The shell firms also have dummy directors who actually do menial jobs.

Only last month, the Financial Intelligence Unit (FIU) has informed the Parliamentary Standing Committee on Finance that reporting entities have flagged suspicious transactions linked to several offshore gaming entities.

A Kolkata-based person handing these shell companies is suspected to have fled the country before DGGI could establish his identity. Officials suspect he had converted the money into crypto and sent it abroad said the TOI report.

The investigating agencies nabbed a crypto exchange operator in Mumbai handling one set of shell companies promoted by dummy directors. According to the crypto operator, Rs 96 crore money collected from users of apps had been converted into crypto currency and moved out of the country.