Russian national masterminded ₹800 crore OctaFx scam: ED
The Enforcement Directorate (ED) has identified Russian national Pavel Prozorov as the mastermind of a fraudulent scheme involving OctaFx India Pvt Ltd. The operation, which revolved around unauthorized forex trading, reportedly collected over ₹800 crore. The ED has charged Prozorov and 53 others in a special court. Further, Prozorov's assets in Spain, worth ₹42 crore, have been marked for seizure under the Mutual Legal Assistance Treaty.
OctaFx's illicit operations and international money transfers
OctaFx operated in India without an office or base, deceiving investors with promises of high returns through its forex trading app. The ED's investigation found that OctaFx illegally transferred profits abroad using fake import documents and mule accounts provided by shell firms. Prozorov worked with Russian partners and two non-resident Indians to carry out the scheme.
OctaFx's aggressive promotions and money laundering scheme
OctaFx became popular through aggressive promotions, including sponsoring an IPL team and hiring production agencies for influencer marketing. Payments to these agencies were made as foreign inward remittances through two Estonia-based companies linked to OctaFx. The platform often changed login URLs to conceal fraudulent activities, diverting funds to e-wallets and fictitious accounts.
Money laundering scheme and illicit fund transfers
Between July 2022 and April 2023, OctaFx earned around ₹800 crore from India. The ED discovered a money laundering scheme involving several Indian bank accounts associated with commission-based shell companies owned by Prozorov. The proceeds of crime were layered through these accounts to conceal their source, with some funneled into SEBI-registered Alternative Investment Funds (AIFs) to lend an appearance of legitimacy.
