India finds €500,000 in money laundering involving Malta iGaming companies

The Indian authorities this week cracked a remote gaming money laundering ring involving iGaming companies registered in Malta, India’s Enforcement Directorate has reported without divulging the names of the companies involved.

The bust came in relation to investigations being carried out across the country against foreign-registered online gaming companies and websites operating in India.

The Enforcement Directorate reports the companies in question are registered in Malta, Cyprus and Curacao and are linked to Indian bank accounts opened in the name of proxy persons who have no links with online gaming activity.

Funds collected through gaming websites are then routed through multiple bank accounts until they are finally remitted out of India by mis-declaring the purpose of remittances as being against the importation of services or goods.

The Enforcement Directorate did not say where the funds were being remitted to but Malta as a destination of at least some of the funds is not being excluded given that some of the unnamed companies involved are registered on the islands.

Remittances of income derived from betting on races or any other hobby are not allowed under the provisions of India’s Foreign Exchange Management Act of 1999.

India’s Enforcement Directorate reports that hundreds of companies were opened by the operation’s key players in the name of employees.

The companies were allegedly used for layering and sending remittances of around Rs. 4000 Crore [approximately €450,000] supposedly for payments for goods and services that were to be imported.

The operation was complex, with the Indian authorities confiscating income tax and identity cards for creating the firms and mobile phones for managing the bank accounts.

Suspects were found using international virtual mobile numbers for instant messaging apps like WhatsApp, Telegram and Signal. They were also using remote-based servers and laptops being used through remote access apps like AnyDesk and TeamViewer.

The seizures during the searches include incriminating documents and electronic devices showing foreign outward remittances collected through gaming websites using the accounts of dummy firms opened in the name of proxies who are not linked to gaming activities.

55 bank accounts of firms being used for layering and remitting income generated from online gaming have also been frozen. Further investigations are underway.

The raids were carried out at 25 premises in Delhi, Gujarat, Maharashtra, Madhya Pradesh and Andhra Pradesh.