ED probe finds Vuenow earned Rs 2,200 cr in cloud particle scam

The Enforcement Directorate (ED), Jalandhar, has unearthed a new modus operandi used by the accused while initiating a money laundering investigation against the firm, Vuenow, in connection with the cloud particle scam. The ED found that the company earned Rs 2,200 crore in the scam.

Sources in the ED said the modus operandi operated in two stages. Investors are first lured and sold cloud particles and then the same is leased back to the end users. The investors in turn receive rentals at a high rate. Interestingly, no physical infrastructure corresponding to the rented cloud particles actually exists with the company.

The investors are duped over a long period of time and it is difficult to trace, as the victims keep availing high periodic rentals on their investment in cloud particles, unaware of the fact that no such digital infrastructure actually exists.

The ED initiated an investigation based on specific intelligence gathered on two issues — the alleged irregular and unauthorised foreign remittances by the Vuenow Group companies and reported fraudulent diversion of investors’ money under the guise of renting out services of data storage.

The ED first initiated a probe into alleged FEMA violations in connection with irregular foreign remittances. During the FEMA investigation, searches were conducted at 14 locations across the country, resulting in seizure of Indian currency worth Rs 30.50 lakh, 6410 euros, 3062 US dollars, 5 Singapore dollars, foreign currency worth 2,750 Swiss francs, digital devices and various incriminating documents.

Significantly, the key promoters of the Vuenow Group did not join the search proceedings. The Vuenow Group was promising unrealistic returns to investors in lieu of purchase of cloud particles (servers).

The returns were as high as 40 per cent per annum. However, to provide the required number of cloud particles (servers) on sale or rent, they did not have the proportionate infrastructure. This was established during the physical verification carried out by the ED during the search of their data centres.

In order to lure the public, Vuenow had set up lavish offices where they used to convince the investors to buy data particles from them by offering lucrative returns through various schemes, thereby falling into the trap.

The ED had forwarded the information under Section 66(2) of the Prevention of Money Laundering Act to the Gautam Buddh Nagar (Noida) police, Uttar Pradesh. The police took cognisance of the fraudulent activities, and based on the information, registered an FIR under Sections 318(4), 61(2) and 316(2) of the BNS, 2023. — TNS