The Enforcement Directorate (ED) on Monday unearthed a new modus operandi and launched a money laundering investigation against a Mohali-based company, Viewo, in connection with the “cloud particle scam”. The corporate office of the company is in Ghazipur area of Zirakpur, Mohali.
According to the preliminary results of the investigation, more than 25,000 investors across India – most of them from Punjab, Haryana and Uttar Pradesh – have purchased cloud particles from the Vuenow Group of Companies and so far the group has made around Rs 2,200 crore in exchange for selling such cloud particles to various investors.
Their modus operandi consists of two steps, where investors are first lured and cloud particles are sold and then leased to end users. Investors get higher rents. Interestingly, the company doesn’t actually have any physical infrastructure compatible with cloud particles for rent. Investors have been duped for a long time and it is difficult to detect, because victims continue to receive high periodic rents on their investments in cloud particles, unaware of the fact that no such digital infrastructure actually exists.
The ED started an investigation based on specific intelligence gathered in two cases. Fraud of investors’ money under the guise of irregular and unauthorized overseas remittance and hiring of data storage services by Vuenow group companies.
The ED first launched an investigation into alleged FEMA violations related to irregular foreign remittances. During the FEMA investigation, 14 locations across the country were searched and Indian currency worth 3.5 million rupees, 6,410 euros, 3,062 US dollars, five Singapore dollars, 2,750 Swiss francs in foreign currency, digital devices and various criminal documents were recovered. Notably, the Vuenow Group’s key promoters did not join the search. Vuenow Group promised investors unrealistic returns in exchange for the purchase of Cloud Particles (servers). The yield was as high as 40%. However, to provide the required number of cloud particles (servers) for sale or rent, they did not have the corresponding infrastructure. This was established during physical verification conducted by ED during search of their data centers.
To lure the public, Vuenow set up lavish offices where they used to persuade investors to buy data particles from them by offering attractive returns through various schemes, thereby falling into the trap.
The ED sent information under Section 66(2) of the PMLA to the Gautam Buddha Nagar (Noida) Police, Uttar Pradesh, who took cognizance of the fraudulent activities and based on the information, registered an FIR under Section 318 (4), 61. (2) and 316(2) of BNS,
Accordingly, the Jalandhar ED also initiated an investigation under the PMLA and conducted search operations at five locations in Punjab and UP, during which various documents and records were seized and seized. During the search, 67 bank accounts of Vuenow Group of Companies and related entities/individuals were frozen under the provisions of PMLA, 2002. The Vuenow group of companies challenged the ED probe and the decision to freeze the bank accounts in the Delhi and Punjab and Haryana High Courts. On December 9, 2024, after hearing both sides for almost an hour, the Delhi High Court refused to grant any interim relief to the company. The ED will still investigate the matter from various angles.