Q-Fon app fraud case probe reaches Gujarat, ED raids 13 places

The Enforcement Directorate ED has initiated a money laundering investigation into an alleged Rs 9163 crore digital investment scheme linked to the QFon app based on an FIR registered by the Thane Policersquos Economic Offences Wing EOWAccording to officials the ED conducted searches at 10 premises in Ahmedabad and three in Surat allegedly linked to directors of QFon entities and certain individuals or firms suspected of receiving investor fundsThe searches were carried out under the Prevention of Money Laundering Act PMLA and are aimed at recovering financial documents digital records and other material to help trace the movement of fundsThe case pertains to a digital investment plan that allegedly promised returns between 2 per cent and 105 per cent per month claiming to generate revenue through online advertisements on mobile applications As per the EOWrsquos findings multiple mobile apps were reportedly floated between May 2020 and January 2024 and a large number of investors were drawn in through promotional messages and referral schemesPreliminary findings suggest that at least 124 investors collectively invested more than Rs 91 crore through both online transfers and cash deposits The company later ceased operations leaving investors unable to recover their moneyInvestigators have stated that the socalled ldquoreturnsrdquo were allegedly paid out using fresh investments from new participants resembling the structure of a Ponzistyle scheme When the inflow of new investors slowed down the operators are suspected to have diverted the remaining funds through multiple linked accounts and associated entitiesFollowing the registration of the FIR by the EOW Thane the EDrsquos Mumbai unit has recorded an Enforcement Case Information Report ECIR under PMLA to examine the suspected layering and movement of funds Sources said that initial scrutiny indicates a network of interlinked accounts and shell companies that may have been used to circulate or conceal the proceedsA senior ED official said that the ongoing searches are intended to gather evidence and verify the nature of transactions adding that the investigation remains at a preliminary stageThe case was initially identified by the Vartak Nagar Police and later transferred to the EOW which is probing it under relevant sections of the Indian Penal Code Sections 406 409 420 and 34 and provisions of the Maharashtra Protection of Interest of Depositors MPID Act The EDrsquos probe focuses on the financial trail and potential laundering aspects arising from the same complaintOfficials said further examination of digital data and financial statements is underway and appropriate action will be taken based on the findings of the investigation