New Delhi [India], January 27 (ANI): The Enforcement Directorate (ED) has arrested two masterminds in connection with a digital fraud scam, involving the defrauding of a senior citizen woman in Chennai of Rs 33 lakh, the agency said on Monday.
One suspect was apprehended in Kolkata, while the second individual was arrested in Delhi as he attempted to flee the country. The arrests stem from an FIR filed by the senior citizen with the Chennai Police, alleging that scamsters defrauded her of Rs 33 lakh.
“Both the arrested suspects played a key role in managing mule accounts, converting illicit cash into cryptocurrency, and transferring it overseas,” said the agency in a statement.
The Chennai Zonal Office of the ED arrested the accused following its ongoing investigation, which uncovered a network of layered mule bank accounts used to route fraudulent funds.
The ED also conducted extensive searches at over 30 locations across West Bengal, Madhya Pradesh, Uttar Pradesh, Gujarat, and Maharashtra as part of the investigation. During these searches, multiple mobile phones, laptops, and other electronic devices containing substantial incriminating evidence were seized.
“Cryptocurrency in the form of BTC and USDT was also found and seized,” said the ED.
The investigation revealed a sophisticated system where cash withdrawn from mule accounts was converted into cryptocurrency and transferred to entities suspected to be based abroad. “Significant amounts of funds, originating from various digital fraud schemes, were routed through this method,” the agency added.
Additionally, the ED stated that the accused misused Cash Deposit Machines (CDMs) to deposit cash into the bank accounts of companies offering fintech services. “These funds were then routed to individual accounts, enabling the accused to obtain cryptocurrency. This cryptocurrency was allegedly used to conceal and transfer the Proceeds of Crime (POC) abroad with the assistance of accomplices using foreign phone numbers,” ED added.
The ED also 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 Digital Crimes. The role of these fintech companies, their distributors, retailers, and associated bank accounts is being examined,” added the agency. (ANI)
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