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Mint Explainer: Mahadev app and the alleged money laundering scandal

The Enforcement Directorate (ED) conducted search operations against the money laundering networks linked with the alleged Mahadev Book Online Betting app, which led to the recovery of cash. (ANI Photo) (ANI)
The Enforcement Directorate (ED) conducted search operations against the money laundering networks linked with the alleged Mahadev Book Online Betting app, which led to the recovery of cash. (ANI Photo) (ANI)

Summary

  • The gambling app allowed users to bet in real-time on a number of games, including cricket, football, games of chance, and tennis

New Delhi: Online betting platform Mahadev Book, operational in India since 2017, has been allegedly involved in money laundering, with the Enforcement Directorate accusing the platform of orchestrating match-fixing through its Mahadev and Khiladi apps. 

The company has reportedly amassed illicit funds worth over 450 crore ($57 million) with estimates indicating a staggering 5000 crore diverted by the entity in ‘hawala transactions’. The app, now blocked by the ministry of electronics and information technology (Meity), was allegedly overseen by individuals based in Dubai -- Sourabh Chandrakar and Ravi Uppal. Mint delves into the events leading to the scam.

The app and ED's charges

The gambling app allowed users to bet in real-time on a number of games, including cricket, football, games of chance, and tennis. The app was very popular with supposedly over 10 million users. ED alleged that the app was used to enroll new users, create user IDs, and launder money through a network "no name" bank accounts. These accounts were being used to transfer money between India and Dubai for 'hawala' or underground banking transactions. The ED has also accused Chhattisgarh chief minister Bhupesh Baghel of accepting kickbacks worth 508 crore from the UAE-based promoters of the app. As per the ED, seven FIRs have been filed by individuals who claim to have lost money on the app. Last week, the Mumbai Police registered an FIR against the Khiladi app. The owners have now been arrested under Section 19 of the Prevention of Money Laundering Act (PMLA).

What the FIR says

Mumbai-based social worker Prakash Bankar, who filed an FIR, claimed that the accused, including Chandrakar, were actively involved in match-fixing of major cricket matches and tournaments held in India. Bankar alleged that as much as 15,000 crore has been siphoned off. For the match-fixing, Chandrakar allegedly operated through Dinesh Khambat from London and Chander Aggarwal, also based abroad. These individuals have been considered to be top match-fixers in India, who operate as partners, run several betting sites, and are associated with another accused, Amit Sharma.

Modus operandi

It is alleged by the central agency that Chandrakar and Uppal, from Dubai, ran the app’s operations by creating profiles of “panel owners" who oversaw four or five different platforms for a commission. These panel owners, in turn, would create user profiles for players (or punters), who would be persuaded to deposit funds into specifically designated bank accounts (the majority of which are unscrupulous or benami accounts held in the names of fictitious individuals). Panel owners would get 80-20 profits. Chandrakar and Uppal would provide information to the panel owners. Approximately, 20% of the business proceeds would be transmitted either through dubious banking methods or through hawala transactions and shared with panel members regardless of the final outcome of betting or gambling games.

What triggered the probe?

The ED probe into the Mahadev Book App scam was triggered by Chandrakar's lavish wedding celebration in the UAE in February, which reportedly cost around 200-250 crore. Chandrakar ran a juice shop in Bhilai till 2019. 

The alleged Bollywood nexus

It was reported that as many as half a dozen Bollywood actors and musicians performed at the wedding of Chandrakar, including Vishal Dadlani, Tiger Shroff, Sunny Leone, Neha Kakkar, and Nushrratt Bharuccha. Private jets were sent from Nagpur to the UAE to ferry relatives of Chandrakar.

Who all have been summoned?

Bollywood actors including Ranbir Kapoor, Kapil Sharma, Huma Qureshi, Hina Khan have been summoned by the ED for promoting the app for monetary gains. Businesspersons Dabur Group chairman Mohit V. Burman and director Gaurav V. Burman have also been listed in the FIR lodged by Mumbai police in the betting app case. Mohit Burman though has denied any involvement.

Betting apps and the ban in India

Illegal betting apps have been banned in India and prohibited from advertising on TV and other forms of media. They have been on the radar of the ministry of information and broadcasting for some time now, with the government placing greater emphasis on stopping these businesses from exploiting customers. Those operating offshore, technically don't fall under the Indian jurisdiction. India’s gaming industry currently is under the Ministry of Electronics and Information Technology.

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