The Enforcement Directorate (ED) has claimed that Rs 4,500 crore were proceeds of crime of the online gaming and betting application Fairplay that has been alleged to be involved in money laundering.
The ED recently filed its prosecution complaint (chargesheet) in the case against Fairplay, detailing how it allegedly ran a sophisticated network of shell entities, offshore entities, financial intermediaries and complex money-laundering operations.
According to the chargesheet, money deposited by users of the app for online betting and gaming was parked into pharma shell companies before being transferred to overseas companies.
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The ED said this was done in the guise of bogus imports, fraudulent exports and overseas investments. Some of the money was also used to purchase movable and immovable properties in India and to invest in stock market.
The Fairplay case emerged following a complaint from Viacom 18 Media Pvt Ltd, which alleged that Fairplay was illegally streaming and broadcasting Indian Premier League (IPL) cricket matches from 2022, thereby causing commercial losses to Viacom which had the rights for the broadcast and streaming.
A request for signup by a user on the app would go through different agents in Dubai, with bogus accounts used eventually to transfer money.
The ED has named Fairplay Sport and two of its companies registered in Dubai, Krish Shah, its founder, Siddhant Iyer alias Joe Paul, who handled the companies’ finances, in the chargesheet.
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Both Shah and Paul are yet to be arrested and are believed to be in the UAE with lookout circulars issued against them.
It has also named brothers Chintan and Chirag Shah, who formed Wohlig Transformation Pvt Ltd for technical and software infrastructure for the app.
The chargesheet claims that apart from IPL and other cricket and sport tournaments, the app also had betting on the 2024 Lok Sabha elections in India.
It claimed that the net profits of the companies during peak season like IPL or the cricket World Cup were Rs 45-55 crore per month, excluding marketing expenses.
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Most of the transactions by users, whose money was deposited through bogus accounts, were between April 2023 and May 2024.
The Fairplay app had advertised about the streaming of IPL and also got celebrities including Bollywood actors, sports personalities as well as South African cricketers to endorse the app for popularity.
The ED claimed that Krish decided to register the company overseas to evade the complexities of Indian law regarding online betting and gaming and to maintain obscurity over the ownership.
The ED conducted searches at various locations linked to the accused and claimed that properties in the names of Krish’s family members were also searched.
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One of his family member had been unable to explain the source of Rs 42 lakh cash found in a bank locker and 10 kgs of silver bars. The ED said Rs 111.59 crores have been seized by freezing bank accounts and properties worth Rs 232.65 crores have been identified.
The ED said that while Fairplay was fully owned by Krish, in April 2023, he sold part of it to co-promoters of Mahadev betting app, another app under scanner for alleged illegal activities.
