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In 2024, cybercriminals tapped into more than 65,000 bank accounts in Karnataka to act as money mules—intermediary accounts used to funnel scam proceeds, reveals data from the Indian Cyber Crime Coordination Centre (I4C). The figure places Karnataka fifth among Indian states for the sheer volume of first-layer mule accounts used in digital fraud.
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These mule accounts are often created using fake KYC credentials or procured—sometimes with innocent account holders receiving small compensation or coerced into participation. Once established, they serve as initial drop-off points for funds stolen through phishing, lottery cheats, online shopping scams, and loan fraud.
A senior cybercrime investigator explained there are two types of such accounts: one made with faulty KYC documents, and the other being genuine personal accounts rented or bought from unsuspecting individuals. The overwhelming number of first-layer mule accounts masks larger, complex laundering structures beneath.
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Despite technological advances, many banks struggle to detect and flag suspicious mule activity. Assistant Commissioner-rank investigators working with the I4C have attributed this proliferation partly to inadequate monitoring systems. Investigators also pointed to internal data leaks, both deliberate and accidental, enabling fraudsters to identify suitable accounts to exploit.
“Banks have the responsibility of monitoring suspicious accounts and transactions, but they are often compromised. There is no proper existing system for monitoring such things in many banks,” one official told the Deccan Herald .
Highlighting the gravity of the situation, Karnataka ranked just below Maharashtra, Rajasthan, Haryana, and Uttar Pradesh. But the true number of mule accounts active in the state may be far higher, as the revealed figure only includes first-layer portals, not deeper layers of laundering.
About the Author – Anirudh Mittal is a B.Sc. LL.B. (Hons.) student at National Forensic Sciences University, Gandhinagar, with a keen interest in corporate law and tech-driven legal change.
