Kerala High Court Denies Bail To Accused In Chinese Loan App Money Laundering Case

Justice Bechu Kurian Thomas, dismissed the regular bail application stating that the investigation indicates the clear involvement of the petitioner as well as his active connection with the acquisition of proceeds of crime.

"The investigation conducted so far revealed that mule accounts were opened within Kerala with the assistance of persons including the petitioner. Debits from such accounts were made to a third party and its trail has also been identified, indicating that an amount of Rs.121 Crores were collected from the victims through exploitation of online platforms which were ultimately transferred to four foreign wallets situated outside India. During investigation, the role of the petitioner has been identified and he is alleged to have been involved in the acquisition of the proceeds of crime by providing as many as 289 mule bank accounts to the cyber fraudsters...Investigation has also revealed that petitioner had arranged crypto accounts on a platform by the name WazirX and he was actively involved in remitting proceeds of crime to the tune of Rs.3.47 Crores outside India to four foreign crypto wallets and he received a remuneration of Rs.2 Crores in his bank accounts...and out of that amount, he distributed Rs.30 lakhs to different persons who had arranged such bank account.s" 

It is alleged that various Chinese loan applications were circulated on social media platforms, which were not listed in the Play Store or App Store, and these illegal loan applications were advertised and contacted with probable customers directly through WhatsApp, after which the accused took control of crucial data through Android phones which were later used for extorting money.

The Enforcement Directorate submitted that he paid ₹5,000 per account to arrange the mule bank accounts, which were used to operate illegal loan applications. It is alleged that the proceeds of crime generated, were subsequently layered by using mule bank accounts arranged by the petitioner and other accused which were debited to payment aggregators who had collected funds from various merchants.

It is also alleged the a portion of the proceeds of the crime were routed through bank accounts of shell entities in India and the aggregated proceeds of crime were remitted outside India through normal banking channels showing fake import of software, analysis of which revealed that there were credits from various dummy entities and debits of Rs 121 Crores.

Case Title - Sayid Muhammed v The Directorate of Enforcement

Case No - Bail App. 7278/2025

Citation - 2025 LiveLaw (Ker) 439

Counsel for Petitioner- Lijin Thamban, Anju Gireesh

Counsel for Respondent - Jaishankar V Nair