A major cyber fraud network allegedly involved in laundering proceeds from online scams through fake merchant QR codes and bank accounts has been uncovered in Uttar Pradesh’s Varanasi. Police arrested three accused from the Kotwali area, alleging that they created merchant accounts on digital payment platforms using forged documents and used them to receive, transfer, and withdraw money generated through cybercrime. Preliminary findings have revealed suspicious transactions worth crores of rupees, prompting investigators to examine the case as part of a larger interstate cyber-financial network.
According to police, the arrested accused have been identified as Sanket Rai, Touheed Alam, and Raj Singh. Investigators said the trio had been living in a rented apartment in Varanasi’s Kotwali area for nearly two years and allegedly operated the network from there. The probe suggests that the group exploited digital payment systems to disguise cybercrime proceeds as legitimate business transactions.
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Modus Operandi and Document Forgery
Police believe Sanket Rai was the mastermind behind the operation. Investigators allege that he, along with his associates, used forged PAN cards, voter identity cards, and other fake documents to open bank accounts. These accounts were subsequently registered as merchant accounts on various digital payment platforms. Merchant QR codes and sound boxes linked to these accounts were then used to process a high volume of transactions, making them appear like genuine commercial activities.
According to investigators, the gang also recruited individuals willing to provide access to their bank accounts in exchange for small financial incentives. These accounts were allegedly used as “mule accounts” to receive money obtained through cyber fraud. Funds were first routed through these accounts and then transferred through multiple channels before being withdrawn in cash. Authorities say the method was designed to conceal the origin of the money and complicate efforts by investigators to trace the transaction trail.
Exploiting Gaps in Digital Systems
During interrogation, the accused reportedly admitted to creating merchant accounts using forged documentation. Investigators further found that merchant accounts often remained operational for some time even after complaints were filed, allowing the suspects additional time to move or withdraw funds before the accounts could be frozen. Police believe the gang exploited this gap to process and dispose of large amounts of money linked to cybercrime activities.
During searches conducted at the premises, police recovered forged PAN cards, bank account-related documents, photographs of Aadhaar cards, and other digital evidence. A preliminary examination of financial records indicated that several transactions may be linked to cyber fraud cases reported in different states. Investigators are now scrutinising banking records, mobile phone data, digital wallet activity, and payment platform logs to establish the full scale of the operation.
Interstate Links and Expert Warnings
Officials said the network was not limited to Uttar Pradesh. Early findings suggest links extending to Bihar and several other states. The investigation has also identified additional suspects believed to be associated with the racket, and efforts are underway to locate and arrest them. Authorities expect more names and connections to emerge as the probe progresses.
Renowned cybercrime expert and former IPS officer Prof. Triveni Singh said that modern cybercriminals are increasingly using sophisticated financial channels not only to commit fraud but also to conceal and move illicit funds. According to him, fake merchant QR codes, mule accounts, and forged identity documents have become common tools for making illegally obtained money appear legitimate. He cautioned citizens against sharing their bank accounts, mobile numbers, or KYC documents with unknown individuals, noting that people can unknowingly become part of a cybercrime chain.
Police are continuing to question the accused and map the structure of the network. Investigators are also working to determine the total amount of money routed through the alleged racket and identify the cyber fraud cases across the country that may be connected to it. The findings of the ongoing investigation are expected to reveal the true extent of the operation and the number of individuals involved.
