HYDERABAD: What appeared as routine transactions and isolated complaints soon revealed a sprawling cyberfraud network spanning multiple states, linking banks, shell companies and unsuspecting account holders. As the scale of the operation became clear, Hyderabad Police moved in.
Under ‘Operation Octopus 2.0’, 16 special teams comprising over 150 personnel were deployed across nine states over seven days. Acting in coordination, they tracked suspects, traced accounts and carried out targeted raids. By the end of the operation, 52 persons had been arrested, including 32 bank officials accused of playing a direct role in enabling the fraud.
Investigators said the arrests exposed wider involvement. These were not just outsiders exploiting loopholes, but insiders allegedly helping build the system itself. The officials were linked to mule accounts and accused of facilitating bank accounts for shell companies used to route illicit funds. In one instance, a relationship manager from Bandhan Bank was arrested for allegedly colluding with fraudsters to open and operate fraudulent accounts.
Hyderabad Police Commissioner VC Sajjanar said the operation also led to the arrest of 15 mule account holders who knowingly allowed their accounts to be used for laundering money, along with five key middlemen who sourced these accounts and channelled funds to the masterminds.
The message, police said, is unequivocal: anyone involved, regardless of position or influence, will face strict legal action. Investigators are continuing to pursue leads, targeting every link in the chain, from facilitators to those orchestrating the fraud.
What made the operation striking was its scale. Teams were deployed simultaneously in Maharashtra, Delhi, Rajasthan, West Bengal, Karnataka, Gujarat, Andhra Pradesh, Telangana and Bihar, navigating logistical challenges and coordinating with local police units to execute targeted arrests. The synchronised effort, officials said, reflects months of groundwork and intelligence gathering.
The investigation has also thrown up troubling patterns. According to the commissioner, private sector banks have emerged as key enablers in the opening of mule accounts, pointing to lapses in due diligence and KYC verification. In several cases, accounts were opened without proper credential checks, allowing them to be misused for fraud. The findings have raised concerns over compliance systems and accountability within banks.
During the raids, police seized 26 mobile phones, 14 cheque books, two pen drives, one laptop and 21 shell company stamps, fragments of a network designed to move money quickly and quietly.
The operation itself was born out of a growing crisis. A surge in investment scams, trading frauds and so-called digital arrest cases, where victims are manipulated, intimidated and coerced into transferring money had triggered alarm.
Earlier, during ‘Operation Octopus 1’ in February 2026, investigators had uncovered a nexus of 350 bank accounts linked to around 850 cases across India, involving transactions of nearly Rs 150 crore. That operation, carried out across 16 states by 32 teams, led to the arrest of 117 accused.
Building on those findings, ‘Operation Octopus 2.0’ shifted focus to bank officials allegedly enabling the fraud, with police saying further action is underway.