The Enforcement Directorate (ED) has provisionally attached ₹1.76 crore in bank funds as part of its money-laundering probe into a high-profile “digital arrest” cyber fraud case. The agency said the amount was parked in an account linked to a mule entity used to route proceeds of cybercrime.
The Jalandhar unit of the ED issued the attachment order on February 14 under the Prevention of Money Laundering Act (PMLA). The case stems from an FIR registered at the Ludhiana cybercrime police station, which alleges that fraudsters impersonating central agency officers extorted ₹7 crore from an industrialist.
Investigators said the accused created a staged “digital arrest” scenario through video calls, displaying fabricated arrest warrants and a fake court process while claiming the victim was under a money-laundering investigation. The victim was kept under continuous virtual surveillance for two days and was persuaded that transferring funds to a so-called “secret supervision account” was part of an official verification process.
According to the ED, the defrauded money was layered through multiple transactions to obscure its origin. The funds were first routed to mule bank accounts operated by individuals linked to the network and then moved through shell companies and dummy business entities to break the audit trail.
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The probe also found that a portion of the funds was sent overseas through trade-based money-laundering channels, while the remaining amount was used to purchase virtual digital assets. The attached ₹1.76 crore is believed to be part of the same laundering chain used to receive and divert proceeds from cyber fraud.
Sources said the accused opened mule accounts in the names of economically vulnerable individuals by offering fake job and loan promises. These accounts were later used to receive and transfer illicit funds. Investigators have identified deposits linked to multiple cyber fraud cases in some of these accounts.
Earlier searches were conducted at several locations, leading to the arrest of two accused who are currently in judicial custody. Authorities recovered ATM cards, mobile phones and bank records reflecting transactions worth several crores. Digital devices and banking data are now undergoing forensic examination to map the complete money trail.
Cyber experts said “digital arrest” scams are an emerging modus operandi in which fraudsters use fake identities, forged legal documents and live video monitoring to create psychological pressure. Victims are made to believe they are part of a legitimate investigation and voluntarily transfer funds.
Experts added that multi-layered transactions, shell entities and the use of crypto assets complicate probes, but banking records and digital forensics enable investigators to reconstruct fund flows.
Agencies believe organised cyber gangs are increasingly targeting high-net-worth individuals and using sophisticated technological tools to simulate legal proceedings. The ED’s action is seen as a significant step in tightening the financial noose around cybercrime networks.
The agency said efforts are under way to identify the ultimate beneficiaries, examine foreign remittances and trace additional accounts linked to the laundering network.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
