Betting Syndicates Use AI Investments As Cover To Move Suspected Proceeds Abroad, ED Probe Reveals

The Enforcement Directorate (ED) in India has uncovered evidence suggesting that an illegal betting syndicate is attempting to launder money by investing in artificial intelligence (AI) ventures abroad, according to a recent report. The ED is investigating Parimatch, a betting platform banned in India but believed to continue operating via multiple mirror websites.

The investigation has revealed that over Rs 200 crore in suspected proceeds of crime (PoC) have been allegedly moved out of India via investments in overseas technology ventures, including claims of AI operations. These funds are traced to remittances made by two Delhi-based companies to entities in Singapore with limited commercial activity.

The ED suspects that this structure is being used by other betting applications to move illicit proceeds abroad. The investigation has found that several companies involved were created primarily to facilitate the movement and layering of betting proceeds. The funds appear to pass through several layers, starting with newly incorporated domestic companies and then moving to overseas entities with minimal commercial activity and short histories.

The use of Discounted Cash Flow (DCF) valuation methods is also under scrutiny, as these methods are being misused to assign artificially high valuations to companies with limited operating history or revenue. The ED is working with the Reserve Bank of India (RBI) to scrutinize these transactions and potentially apprise the RBI of its findings.