Korvio Coin fraud probe: ED arrests Masoom Juneja after searches in Rs 500-crore case

The Enforcement Directorate (ED) on Monday carried out searches and arrested a person in a money laundering case. The probe is linked to an alleged Rs 500-crore cryptocurrency fraud. The agency said the scam affected more than 2.48 lakh investors. Officials said the action also resulted in the seizure of documents and digital devices.

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An official statement said premises linked to Vijay Kumar Juneja and Masoom Juneja were searched on Monday. The ED said Masoom Juneja has been arrested under the Prevention of Money Laundering Act (PMLA). The agency alleged that investor funds were routed to Vijay Kumar Juneja and Masoom Juneja during the operation.

ED cryptocurrency fraud probe: origin and accused

The money laundering probe followed FIRs filed by police in Himachal Pradesh and Punjab. These FIRs named Subhash Sharma and others, the ED said. The agency alleged Sharma acted with Hem Raj, Sukhdev Thakur, Abhishek Sharma and Radhika Sharma. The group allegedly started a cryptocurrency-based multi-level marketing (MLM) scheme in 2018.

ED cryptocurrency fraud probe: platform, domains and investor pitch

The ED said the scheme ran through an online platform built to sign up many investors. The platform was later moved to foreign servers, officials said. It was operated using domains such as korvio.io and voscrow.com. The agency alleged people were pushed to invest in Korvio Coin (KRO) with assured high returns.

"The accused induced public investment in Korvio Coin KRO by promising assured high returns, conducting misleading seminars, manipulating token values, and introducing new tokens to sustain a Ponzi structure, wherein funds from new investors were used to pay earlier investors, the statement said.\"

ED cryptocurrency fraud probe: scale of losses and digital trail

The ED alleged digital records and internet domains tied to the operation were deleted. The agency said this was done to hide evidence. However, recovered data showed more than 2.48 lakh users were victims. Officials claimed transactions of over USD 219 million took place on the platform.

The ED estimated investor losses at around Rs 500 crore. Investigators alleged proceeds of crime were layered through many bank accounts. The funds were also moved via fictitious firms and intermediaries, the agency said. Officials added that part of the money was converted into cryptocurrency to blur the audit trail.

ED cryptocurrency fraud probe: routing of funds and property purchases

According to the agency, cash reached Vijay Kumar Juneja and Masoom Juneja from Sharma and associates. The ED said statements from various persons supported this claim. Officials alleged the money was used to buy immovable properties. The registered values were allegedly far below the real amounts paid.

The agency said this structure allowed much of the payment to be made in cash. It also allegedly helped launder money from the fraudulent scheme. The ED also claimed the two were nominees in several employee-held accounts. This, officials said, suggested control over accounts used to layer and hide proceeds.

The ED also alleged that Sharma fled to Dubai after the fraud became public. The agency said this was an attempt to avoid prosecution. Officials have not disclosed further details on additional arrests or property attachment in this action. The investigation continues under the PMLA, based on the FIRs in Himachal Pradesh and Punjab.

With inputs from PTI