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Following Prime Minister Narendra Modi's recent appeal for vigilance against the threat of "digital" arrests, investigative agencies have announced active measures to combat this growing form of cybercrime. The Enforcement Directorate (ED) recently submitted a charge sheet related to one such scam, while the Indian Cyber Crime Coordination Centre (I4C) has issued a new advisory.
According to a statement released on Saturday, the ED filed a prosecution complaint last month before a special Prevention of Money Laundering Act (PMLA) court in Bengaluru against eight individuals accused of luring the public with fake IPO allotments and stock market investments via fraudulent mobile applications.
The agency's investigation uncovered a vast cybercrime network in India, allegedly running fake investment schemes and digital arrest frauds primarily through social media channels like Facebook, Instagram, WhatsApp, and Telegram. Known as "pig-butchering" scams, these deceitful investment schemes tempt unsuspecting investors with high returns, using fake websites and WhatsApp groups that mimic legitimate financial companies.
The ED revealed that scammers build credibility through fake advertisements and fabricated success stories, ultimately convincing victims to make significant financial investments. In addition to fake investments, some victims were subjected to a "digital arrest" ruse, in which fraudsters posing as officials from law enforcement agencies, such as Customs and the CBI, coerced them into transferring funds. Victims were reportedly informed that they were involved in illegal activities and needed to transfer money for a "fund regularisation process."
In response, the I4C has issued a public advisory warning against digital arrests, reminding people that video calls from supposed police, CBI, or Customs officials are likely to be cyber criminals attempting to exploit their victims. The advisory urges people to report such attempts immediately by calling the national cybercrime helpline, 1930, or through the cybercrime portal www.cybercrime.gov.in.
Prime Minister Modi raised concerns about digital arrest scams in his "Mann Ki Baat" radio broadcast on 27 October. He advised citizens to "stop, think, and take action" when encountering such situations, emphasising that this approach is vital to ensuring digital safety.
The ED has booked a money laundering case based on multiple police FIRs and subsequently arrested eight suspects, who are all currently held in judicial custody. The individuals named in the charge sheet filed on 10 October are Charan Raj C, Kiran S K, Shashi Kumar M, Sachin M, Tamilarasan, Prakash R, Ajith R, and Aravindan, along with 24 associated companies. The case involves proceeds of crime estimated at Rs 159 crore, with the PMLA court acknowledging the charge sheet on 29 October.
The ED's investigation highlighted that fraudsters utilised numerous SIM cards, often tied to shell companies' bank accounts or used to create WhatsApp accounts, making it difficult for authorities to track their activities. Fraudsters established 24 shell companies across Tamil Nadu, Karnataka, and other states to manage the illegal funds from these cybercrimes. Many of these companies were registered at coworking spaces with no real business activity, and the scammers used fake bank documents to register them with the Registrar of Companies.
Scammers allegedly laundered funds by transferring them between "mule" accounts before converting them into cryptocurrency and moving the assets abroad. Charan Raj C, identified as a central figure, recruited individuals as directors and managed bank account setups. Shashi Kumar M reportedly incorporated several shell companies that later collected the illegal funds. Meanwhile, Kiran S K maintained connections with bank accounts linked to multiple shell companies, which foreign scammers had set up using fraudulent documents.
Sachin M, another director, admitted to aiding overseas scammers in recruiting directors and setting up accounts, despite awareness of the criminal nature of these actions. Tamilarasan reportedly played a significant role, collaborating with Indian and international scammers to open accounts for shell companies such as Cyberforest Technologies Pvt. Ltd., even with full knowledge of their connection to cybercrime.
The ED stated it has gathered substantial evidence, including chequebooks and communication records, showing that these individuals were part of a syndicate laundering cybercrime proceeds across India.
(With inputs from PTI)
