Mumbai | January 11, 2026: A Mumbai sessions court has rejected bail pleas of eight accused and denied anticipatory bail to another in the high-profile ₹58.13-crore “digital arrest” cyber fraud case, observing that a substantial portion of the defrauded money remains untraced after being routed into cryptocurrency.
The court said the missing crypto trail, coupled with the possibility of evidence tampering and interference with the ongoing investigation, weighed against granting bail to the accused. It noted that releasing the accused at this stage could allow them to contact absconding suspects or disrupt the digital money trail.
The case pertains to the alleged cheating of Malad resident Michael Mascarence, a former vice-president and later consultant with a pharmaceutical company, who approached cybercrime authorities in September 2025 after realising he had been defrauded.
According to investigators, Mascarence had received ₹53.10 crore in July 2025 from the sale of nearly three lakh shares held by him in the company. Between July 28 and August 18, 2025, he withdrew close to ₹10 crore with assistance from his bank manager
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‘Digital arrest’ began with phone calls
On August 19, Mascarence received phone calls from individuals posing as government officials. The callers claimed that complaints had been lodged against him for sending illegal messages and warned him of imminent legal action.
Investigators said the fraudsters gradually escalated the pressure by falsely linking him to a high-profile criminal case and alleging that he was under investigation. The victim was told he was under “digital arrest” and was instructed to remain constantly available on video calls while following directions issued by the callers. Believing he was facing serious legal consequences, Mascarence allegedly complied with the instructions without independent verification.
Crores transferred under intimidation
Under sustained psychological pressure, threats of arrest and constant surveillance, the victim was allegedly forced to transfer a total of ₹58.13 crore to multiple bank accounts controlled by the accused. The transfers continued until September 20, 2025, when the callers demanded an additional ₹3 crore.
At this point, investigators said, Mascarence became suspicious and reported the matter to the cybercrime police, leading to the registration of an FIR and subsequent arrests. During the investigation, it emerged that the defrauded funds were layered through several bank accounts and that a significant portion was converted into cryptocurrency, making recovery and tracing difficult.
Court’s observations
While rejecting the bail applications, the sessions court observed that several accused had failed to satisfactorily explain how their bank accounts were used for receiving and routing large sums of money. The court noted that their role did not appear to be limited to that of passive account holders and pointed to indications of an organised network.
The court also denied anticipatory bail to one accused from Rajasthan, against whom allegations include assisting absconding suspects in converting stolen funds into cryptocurrency. The judge held that granting bail could seriously prejudice the investigation.
The prosecution argued that the accused were closely linked to the main conspirators and that a large amount of money was still unrecovered. It submitted that the risk of destruction of digital evidence remained high.
Growing threat of ‘digital arrest’ frauds
Investigators said the case highlights a rising cybercrime pattern known as “digital arrest,” where fraudsters impersonate officials, use video calls, forged documents and legal jargon to intimidate victims into compliance.
Unlike traditional cybercrimes, such frauds rely more on psychological manipulation and fear than on technical hacking, making even financially savvy individuals vulnerable.
Investigation continues
Authorities said efforts are ongoing to trace the cryptocurrency transactions and identify other members of the network. Further arrests are not ruled out as the money trail is examined.
The court’s order is being seen as a strong signal against economic cyber offences, particularly cases involving large-scale fraud and complex digital money laundering, where safeguarding evidence remains critical.
