
CHENNAI: Investigating a ‘digital arrest’ cyber scam case where a Chennai woman was defrauded of Rs 33 lakh, the Enforcement Directorate’s Chennai zone has arrested two masterminds in Kolkata and New Delhi while they were fleeing the country, an official release on Monday said.
The agency said the duo played a key role in managing mule accounts, converting the illicit cash into cryptocurrency and transferring it to foreign countries.
ED’s investigation into the case uncovered a network of layered mule bank accounts in Virudhunagar, Noida, Chindwara in Madhya Pradesh, Morbi in Gujarat and 24 Parganas and Bardhaman in West Bengal, which were used to route the fraudulent funds.
Searches were conducted at 30 locations across West Bengal, Madhya Pradesh, Uttar Pradesh, Gujarat and Maharashtra. Multiple mobile phones, laptops and other electronic devices containing incriminating evidence were seized. Cryptocurrency in the form of Bitcoins and USDT was also found and seized.
Investigations revealed a sophisticated system where cash withdrawn from mule accounts converted into cryptocurrency was transferred to entities based in foreign countries.
Sources said at least Rs 15 crore of defrauded money was found to be routed through this method.
The money laundering network utilised agents contacted only through messages on Telegram channels who would withdraw the scammed money from their bank accounts and deposit it in accounts of Indian Fintech companies through Cash Deposit Machines (CDMs). This money was then routed to individual accounts before conversion to cryptocurrency, ED said. Accomplices using foreign phone numbers were also part of the laundering operation, ED added.
The agency said it has uncovered major lapses by several fintech companies, which failed to comply with Know Your Customer (KYC) norms and accepted cash deposits from bogus entities and individuals.
These cash deposits, running into hundreds of crores, are suspected to be tainted money originating from digital crimes.
The role of these fintech companies, their distributors, retailers, and associated bank accounts is being examined, ED said.