ED Tracks Mule Accounts in Digital Arrest Cyber Fraud, Attaches ₹1.76 Crore

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Cybercrime Investigators Uncover Sophisticated ‘Digital Arrest’ Scam, Freeze ₹1.76 Crore in Bank Funds

A high-profile cybercrime investigation has led to the provisional attachment of ₹1.76 crore in bank funds, as part of a money-laundering probe into a complex “digital arrest” scam.

The Scam

The Enforcement Directorate (ED) has identified the funds as part of a larger laundering chain used to receive and divert proceeds from cybercrime.

According to investigators, the scam involved creating a staged “digital arrest” scenario through video calls, where fabricated arrest warrants and fake court processes were displayed to convince victims they were under investigation for money laundering.

The victims were kept under continuous virtual surveillance for extended periods and persuaded to transfer funds to a “secret supervision account” as part of an official verification process.

The Investigation

The ED’s probe revealed that the defrauded money was layered through multiple transactions to obscure its origin.

The funds were first routed to mule bank accounts operated by individuals linked to the network, and then moved through shell companies and dummy business entities to break the audit trail.

A portion of the funds was sent overseas through trade-based money-laundering channels, while the remaining amount was used to purchase virtual digital assets.

The attached ₹1.76 crore is believed to be part of the same laundering chain used to receive and divert proceeds from cybercrime.

Investigators have identified deposits linked to multiple cyber fraud cases in some of the mule accounts, which were opened in the names of economically vulnerable individuals by offering fake job and loan promises.

Arrests and Recoveries

The ED’s investigation has led to the arrest of two accused individuals, who are currently in judicial custody.

Searches were conducted at several locations, resulting in the recovery of ATM cards, mobile phones, and bank records reflecting transactions worth several crores.

Digital devices and banking data are currently undergoing forensic examination to map the complete money trail.

Emerging Modus Operandi

Cyber experts have warned that “digital arrest” scams are an emerging modus operandi, where fraudsters use fake identities, forged legal documents, and live video monitoring to create psychological pressure on victims.

These scams are particularly challenging to investigate due to the use of multi-layered transactions, shell entities, and crypto assets.

However, banking records and digital forensics have enabled investigators to reconstruct fund flows and track the perpetrators.

Conclusion

The ED’s action is seen as a significant step in tightening the financial noose around cybercrime networks.

The agency’s actions are aimed at disrupting the financial networks of organized cyber gangs, which are increasingly targeting high-net-worth individuals and using sophisticated technological tools to simulate legal proceedings.