Gwalior: Investigators have made the first breakthrough in the alleged ₹1.58 crore digital arrest cyber fraud involving a 69-year-old retired laboratory technician from Gwalior, Madhya Pradesh. The Crime Branch has arrested Nashik-based iron trader Vitthal Phalse, whose ICICI Bank current account allegedly received ₹19.50 lakh from the defrauded amount.
Fake Digital Arrest For 33 Days
The complainant, Meenakshi Nakhre, a resident of the Lashkar area of Gwalior, filed a complaint on June 23. According to the investigation, she received calls on May 10, 2026, from individuals claiming to be officials of the Delhi Telecommunications Department.
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The callers allegedly told her that another mobile number registered in her name was being used for money laundering and other illegal activities. When she denied owning such a number, the fraudsters allegedly threatened her with arrest and legal action.
The callers then posed as IPS and CBI officers and kept her under continuous surveillance through video calls in what investigators described as a fake digital arrest for 33 days. During this period, they allegedly intimidated her into transferring ₹1.58 crore into multiple bank accounts.
Money Mule Account Traced
Following an analysis of banking transactions and the digital money trail, investigators traced part of the proceeds to the bank account of Ecobright Green Concrete Infra Private Limited in Nashik, Maharashtra. Police arrested the company’s operator, Vitthal Phalse, after finding that ₹19.50 lakh had been credited to his account on June 10, 2026.
During questioning, Phalse allegedly claimed that he had suffered business losses and was searching online for a personal loan. He said he came into contact with a purported money mule account agent who offered him a 10 per cent commission in exchange for allowing his bank account to be used.
The accused has claimed that he was unaware the funds originated from cyber fraud. Investigators are independently verifying this claim through digital and financial evidence.
Multi-State Network Under Probe
The investigation has further revealed that the stolen money was allegedly distributed across four bank accounts in four states. Investigators said ₹60 lakh was transferred on May 26 to an account in Malappuram, Kerala; ₹40.90 lakh on June 3 to an account in Salt Lake, Kolkata; ₹37.50 lakh on June 5 to an account in Raipur, Chhattisgarh; and ₹19.50 lakh on June 10 to the Nashik account.
Authorities are now examining the account holders, beneficiaries and possible links within the wider money mule network. Investigators suspect the fraud was executed by an organised cybercrime syndicate that used shell companies, current accounts and commission-based mule accounts to layer and move stolen funds rapidly.
Renowned cybercrime expert and former IPS officer Prof. Triveni Singh said that in most digital arrest scams, fraudsters first establish psychological control by threatening victims with legal consequences before laundering the proceeds through multiple money mule accounts. He said coordinated analysis of banking trails, mobile records, IP logs and beneficiary accounts is crucial to identifying the full network.
Cybersecurity researchers have also cautioned people against allowing their bank accounts to be used in exchange for commissions under the guise of loan assistance, investment opportunities or job offers. Such accounts are frequently used as money mule accounts and can expose account holders to serious legal consequences.
The investigation remains ongoing, with authorities continuing to trace other account holders, intermediaries and members of the alleged cybercrime syndicate.
