A new ‘free money’ scheme targeting Indians in the US involves disputed remittances and exposes recipients in India to fraud.
How Does the Free Money Scheme Work?
A suspected financial fraud scheme is targeting non-resident Indians (NRIs) living in the United States by encouraging them to transfer money to India and subsequently dispute those transactions with their banks.
Organisers operating through community WhatsApp groups are allegedly recruiting participants by presenting the arrangement as an opportunity to obtain money without financial loss. Participants initially authorise transfers to bank accounts belonging to relatives, friends or other recipients in India. Several weeks later, the senders reportedly approach their US banks and falsely claim that the transfers were unauthorised. If the banks accept these claims, the senders receive refunds while the original amounts remain in the recipients’ Indian accounts.
The organisers allegedly collect a 30% commission from participating senders, making the arrangement financially beneficial to those coordinating the transactions.
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Why Are Young Indians Being Targeted?
Accounts from NRIs suggest that some Indians below 30 years of age, particularly those living in Virginia and Texas, have been approached through such arrangements. Financial difficulties, uncertain visa circumstances and recent job losses are reportedly making some individuals vulnerable to these offers.
Some participants allegedly believe they can return to India without facing consequences for disputed transactions conducted through American financial institutions. However, banking investigations can trace transactions across borders, and potential legal consequences may arise long after the original transfers.
What Legal Consequences Could Follow?
Individuals who deliberately misrepresent authorised transactions as fraudulent could face serious legal action in the United States. The reported scheme carries potential penalties of up to 30 years’ imprisonment and fines reaching $1 million under applicable US bank-fraud laws, depending on the offence and circumstances.
Recipients in India may also face investigation if they knowingly participate in the arrangement. Section 318(4) of the Bharatiya Nyaya Sanhita (BNS), which addresses cheating involving dishonest inducement to deliver property, could become relevant where the necessary legal elements are established. Bank accounts receiving suspicious transfers may also be traced and frozen during investigations, creating financial and legal difficulties for account holders.
What Should Families and Recipients Know?
Families and friends receiving unexplained overseas transfers have been advised to verify the source and purpose of the funds before accepting them.
Nagarjuna Malempati, founder and CEO of Seattle-based fintech company Xpat Money, warned that apparently easy money could jeopardise an individual’s employment, visa status and future in the United States. He also cautioned that such activities could lead to stricter banking procedures affecting legitimate remittances.
Recipients encountering suspicious offers should contact their banks and report suspected cybercrime through the national helpline 1930 or cybercrime.gov.in.
