BHOPAL: The Madhya Pradesh Cyber Police have arrested an ex-serviceman-turned-district panchayat member and a mechanical engineer for allegedly facilitating a Rs 21.05-crore cyber fraud in which a 70-year-old chartered accountant from Gwalior was duped through a cryptocurrency investment scam.
The arrests mark a significant breakthrough in what investigators describe as one of the largest "pig butchering" cyber frauds reported in Madhya Pradesh.
The first accused, 41-year-old Jagdish Malviya, a district panchayat member from Shajapur and a former serviceman, was arrested by the Cyber Police's Gwalior unit for allegedly allowing cyber fraudsters to use his bank account as a mule account.
According to investigators, the fraudsters transferred Rs 50 lakh into Malviya's account in two transactions of Rs 25 lakh each and allegedly paid him a 2% commission for allowing the account to be used.
Police said the Rs 50 lakh was only a fraction of the Rs 21.05 crore allegedly siphoned off from Gwalior-based chartered accountant Ashok Vijayvargiya between December 2025 and June 2026.
Investigators said Malviya had allegedly been allowing cybercriminals to use his bank accounts for nearly six months.
During this period, more than Rs 2 crore was routed through his accounts before being transferred to the next layer of mule accounts, police said.
The police have seized Rs 2 lakh in cash from Malviya.
"Analysis of his banking transactions shows that over Rs 2 crore was routed through his accounts over the past six months. The funds originated from multiple states, particularly Maharashtra, before being transferred further," Deputy Superintendent of Police Sanjeev Nayan of the Madhya Pradesh Cyber Cell said.
Based on Malviya's interrogation, the Cyber Police arrested 31-year-old mechanical engineer Ankit Verma from Ratlam.
Investigators suspect Verma acted as a facilitator who connected Malviya with organised cyber fraud networks. Preliminary investigations indicate that he allegedly arranged mule bank accounts for multiple cybercrime syndicates operating across the country.
Police are continuing to interrogate Verma to identify other members of the network.
The victim, 70-year-old chartered accountant Ashok Vijayvargiya of Gwalior, reportedly spent decades advising clients on accounting, taxation, auditing and financial management. Ironically, he became one of the State's biggest victims of a cryptocurrency investment scam.
According to the police, Vijayvargiya was first contacted on WhatsApp in December 2025 by a woman identifying herself as Divya Singh, who claimed to be an investment consultant.
She persuaded him to invest in cryptocurrency trading involving Bitcoin (BTC) and Tether (USDT) and shared links to create trading accounts on what investigators later found to be a fraudulent investment platform.
Soon after registering, Vijayvargiya began receiving calls from several individuals claiming to be successful cryptocurrency investors.
Following the classic "pig butchering" modus operandi, the fraudsters gradually gained his trust over several months, regularly discussing investment strategies and convincing him that cryptocurrency trading offered extraordinary returns.
To reinforce the illusion, they displayed fabricated trading dashboards showing massive profits and even transferred Rs 1.88 lakh into his bank account as purported trading profits. This encouraged him to make increasingly larger investments.
The scam took a dramatic turn when Vijayvargiya attempted to withdraw his investments.
Instead of processing the withdrawal, the fraudsters claimed he first had to pay Rs 10.84 crore as tax because of the enormous profits reflected in his trading account.
When he expressed his inability to pay, the woman posing as an investment consultant allegedly convinced him to deposit Rs 5.34 crore, promising that she would arrange the remaining amount herself.
Weeks later, when he again sought to withdraw his money, the fraudsters demanded an additional 2 lakh USDT, valued at more than Rs 1.92 crore, as a "risk margin" before releasing his funds.
The repeated demands eventually aroused suspicion after Vijayvargiya discussed the matter with friends and clients, who advised him that he had likely fallen victim to a sophisticated online investment scam.
He then approached the Madhya Pradesh Cyber Police's Gwalior Zonal Unit, which registered a case under the relevant provisions of the Bharatiya Nyaya Sanhita (BNS) and the Information Technology Act, 2000.
Investigators said the fraudsters used an extensive network of mule bank accounts to launder the stolen money.
The probe has revealed that 77 first-layer mule accounts were initially used to receive the funds, including the account operated by Malviya.
Police estimate that, within the first two layers of laundering alone, nearly 570 mule accounts across the country were used to move and conceal the money before it was transferred through several additional layers.
Officials said nearly 40% of the identified accounts involved in the laundering network were opened with banks in southern India.
Working with the Union Home Ministry's Indian Cyber Crime Coordination Centre (I4C), investigators have frozen multiple bank accounts holding approximately Rs 3.5 crore linked to the fraud.
Police said Rs 85 lakh from the frozen amount is in the process of being returned to the victim.
The investigation is continuing to identify the masterminds behind the nationwide cybercrime network and trace the remaining proceeds of the fraud.
