ED arrests UP-based agent for duping numerous investors through 'QFX' Ponzi fraud

New Delhi, Sep 26 (PTI) The ED on Friday said it has arrested a Uttar Pradesh-based agent who allegedly duped numerous investors through 'QFX', a Ponzi fraud.

A special Prevention of Money Laundering Act (PMLA) court sent Navab Hassan, who was taken into custody on Thursday, to Enforcement Directorate (ED) custody for nine days, the federal probe agency said.

Hassan was arrested for his "pivotal role" in "misleading" innocent people and "mobilising" public deposits to launder proceeds of crime through the QFX scam, also known as the YFX, BotBro, BotAlpha, Crossalpha and Minecrypto scam, the ED said in a statement.

This was the second arrest the ED made in this case over the past week. Harinder Pal Singh, a "top agent", was arrested by ED on September 17.

Singh "identified" Hasaan as the "leading" agent currently active in the western Uttar Pradesh region, the ED said.

The money laundering case stems from multiple FIRs registered by police in Himachal Pradesh, Madhya Pradesh, Haryana, Uttar Pradesh and Assam, indicating that this "pyramid scam" (Ponzi or multi-level marketing fraud) was perpetrated by promising high monthly returns of 5-6 per cent through robot/AI-bot based forex trading.

The accused allegedly "used" payment aggregators and virtual currencies like USDT to collect funds.

Once invested, the IDs were deleted, payouts were halted after a few months and the proceeds of crime generated from the investment was diverted to the UAE for purchasing properties or luxury spending in the names of close associates of the main accused, the ED said.

The agency said Hassan operated as a "senior field leader in the rank of 'Blue Diamond Executive' and built a base of more than 10,000 investors under him".

"He had been collecting cash and funnelling investments via payment aggregators and later through USDT, while coordinating with Dubai-based masterminds -- Lavish Chaudhary, also known as Nawab, and his associates.

"He has said that no real forex trading ever took place on the platform and that investor dashboards reflected notional balances while new collections were used to service pending payouts," the ED said, describing the modus operandi of the alleged fraud.

It claimed Hassan frequently travelled to the UAE to meet the "absconding" mastermind Lavish Chaudhary, and was planning to travel to Dubai again.

He used to join Zoom call meetings with Chaudhary to inspire confidence and trust among new investors.

The ED conducted multiple searches in this case early this year and froze funds worth Rs 391 crore kept in 185 bank accounts of some shell or dummy companies linked to the accused. PTI NES ARI