Warning Against Illegal Payment Gateways: I4C

04-11-2024

On October 28, 2024, the Indian Cybercrime Coordination Center (I4C), under the Ministry of Home Affairs (MHA), issued an alert regarding illegal payment gateways created using mule bank accounts.
These operations are linked to transnational organized cybercriminals engaged in facilitating money laundering as a service.
1. Transnational organized cybercriminals are groups that operate across borders, leveraging technology to commit crimes and evade law enforcement.
2. They engage in a range of cybercrimes, including financial fraud, data breaches, and the facilitation of illegal money transfers.
Recent raids by law enforcement agencies in Gujarat and Andhra Pradesh have found these illicit activities, which exploit vulnerable financial systems for criminal gain.

Key Findings from Recent Raids:

The Gujarat Police and Andhra Pradesh Police have conducted significant operations, leading to the filing of FIRs (First Information Reports) related to these illegal activities.

Gujarat FIR: 0113/2024
Andhra Pradesh FIR: 310/2024

Operation Mechanism:

These mule account accounts facilitate illegal transactions and money laundering by using Illegal Payment Gateways:
1. A mule account is a bank account used to move money around for criminals, often as part of money laundering:
2. How it works : Criminals deposit funds into a mule account, and then instruct the mule to move or withdraw the money.
3. The mule might move the money to another account or withdraw it as cash to deposit elsewhere
Creation of Illegal Payment Gateways:
1. Illegal payment gateways are established using these mule accounts.
2. These gateways are provided to criminal syndicates for receiving funds from various illegal platforms, including:
  1. Fake investment scams
  2. Offshore betting and gambling sites
  3. Fake stock trading platforms
They play a major role in online financial scams.
Around 50% of cybercrime complaints in India link back to entities in China.
Other significant sources include Cambodia and Myanmar.

Identified Payment Gateways:

PeacePay
RTX Pay
PoccoPay
RPPay

These gateways are reportedly operated by foreign nationals and serve as conduits for money laundering.

Economic Impact:

Cyber scams represent a serious risk to the economy.
They can lead to significant capital outflows and contribute to threats like terrorism financing and money laundering.
A notable case involved ₹5.5 crore in cryptocurrency being laundered through an international crypto exchange via over 350 transactions.

Financial Fraud Statistics:

From January to June 2023, reported losses from financial fraud reached ₹11,269 crore.
The MHA’s cybercrime portal and helpline work with state police and over 200 financial intermediaries, indicating that many fraud cases go unreported.

Global Context:

The I4C has identified 18 ATM hotspots in India where fraudulent cash withdrawals have taken place.
Some of these withdrawals have links to international ATMs in locations like Dubai, Hong Kong, Bangkok, and Russia.
Areas in Southeast Asia, especially Cambodia, Myanmar, and Laos, are known hubs for investment scams.
These scams often resemble call centers where fraudsters operate using Indian mobile numbers.

Government Response and Solutions:

The MHA plans to hold discussions with the Union Finance Ministry and the Reserve Bank of India to devise strategies against mule accounts.
Banks are urged to keep a close eye on unusual transactions, especially in accounts with low balances or those belonging to salaried individuals.
Banking systems should be enhanced to detect multiple logins from a single IP address, especially if that IP is from outside India, and alert the authorities.
It is essential to implement alert systems for sudden changes in transaction volume and frequency to identify potential fraud early.

Advisory from I4C:

Citizens are strongly advised not to sell or rent their bank accounts or business registration certificates, including:
1. Company registration certificates
2. Udhyam Aadhaar Registration certificates
Allowing illicit funds to be deposited in personal accounts can lead to severe legal consequences, including arrest and prosecution.
Immediate Reporting: Citizens must report any suspicious activities or cybercrimes using:
1. Helpline number: 1930
2. Website: www.cybercrime.gov.in
Follow CyberDost on social media for updates and guidance on cyber safety.
Banks are encouraged to implement checks to identify any misuse of bank accounts associated with illegal payment gateways.

About I4C: Indian Cybercrime Coordination Centre

The Indian Cybercrime Coordination Centre (I4C) is an initiative launched by the Ministry of Home Affairs (MHA), Government of India.
Its primary goal is to address cybercrime in a coordinated and comprehensive manner.

Key Focus Areas

I4C aims to improve collaboration between various law enforcement agencies and other stakeholders involved in combating cybercrime.
The centre works on enhancing India's overall ability to tackle cybercrime effectively.
It seeks to improve the satisfaction levels of citizens in dealing with cybercrime issues.

Establishment

The I4C scheme was approved on October 5, 2018.
It was officially dedicated to the nation on January 10, 2020, by the Honorable Home Minister.
Since its rollout, I4C has focused on boosting the nation’s collective capabilities against cybercrimes and promoting effective coordination among law enforcement agencies.

Background

Global Challenge: Cybercrime transcends national borders, requiring collaboration among various stakeholders across jurisdictions.
Rapid Growth: It is one of the fastest-growing forms of transnational crime, fueled by increasing internet usage and rapidly evolving technologies.
To address this complex issue, the MHA formed an Expert Group to analyze the gaps and challenges in tackling cybercrime, prepare a strategic roadmap, and provide recommendations.

Objectives of I4C

Serve as the central hub for curbing cybercrime in India.
Strengthen efforts against cybercrime targeting women and children.
Make it easier for citizens to file cybercrime-related complaints.
Identify trends and patterns in cybercrime incidents.
Act as an early warning system for law enforcement agencies to prevent and detect cybercrime proactively.
Create awareness among the public about preventing cybercrime.
Assist states and union territories (UTs) in training police officers, public prosecutors, and judicial officers in areas like cyber forensics, investigation, and cyber hygiene.