The city police arrested nine individuals allegedly involved in a massive instant loan app fraud and seized cryptocurrency worth over ₹60 lakh from their possession. The operation, which was triggered by a tragic case of cyber harassment and suicide, exposed an intricate web of financial deceit orchestrated through Indian bank accounts and cryptocurrency wallets.
The arrested individuals were identified as G. Sambasiva Rao (32) of Palnadu, K. Sandeep (39) of Guntur, Y.V. Dileep Kumar (25) of Palnadu, Y. Sai Krishna (31) of Guntur, and five others. The arrests followed an intense investigation launched after a local man, harassed by loan app operators, died by suicide.
Addressing the media, Commissioner of Police Shankabratha Bagchi detailed the operation and said the fraudsters were working in coordination with Chinese cybercriminals, leveraging Indian banking systems and social media apps to perpetrate the scam.
Tragic Suicide Sparks Investigation into Elaborate Financial Web
The investigation began after a city resident borrowed a loan of ₹2,000 via an instant loan app. What initially appeared to be a minor transaction spiraled into relentless harassment when the fraudsters began demanding excessive repayments. They used morphed images of the borrower and his wife, sending them to the victim’s contacts on WhatsApp to humiliate and pressure him.
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Despite the victim’s wife paying the demanded amount to the app operators, the continuous harassment led to the man’s suicide. His family subsequently lodged a police complaint, leading to the registration of a criminal case.
During the probe, police traced the financial transactions linked to the fraud. Analysis revealed that the bank account receiving repayments was operated by a resident of Hailakandi, Assam. This account, along with five others, showed patterns of small, frequent transactions, indicating the laundering of loan repayments. Funds were cyclically moved between various company accounts to mask the fraud and finance fresh disbursements.
Indian Associates, Cryptocurrency Trails, and Chinese Links
During questioning, primary accused G. Sambasiva Rao revealed that he had been contacted via Telegram by two Chinese nationals who proposed a high-commission business: setting up Indian firms and current accounts for illicit transactions. Sambasiva Rao, lured by the promise of easy money, involved his friends Sandeep, Dileep, and others to open multiple accounts under the guise of company registrations.
The police said Sambasiva Rao alone provided details of around 132 bank accounts to the Chinese operators, which were then used for routing fraudulent loan transactions. The scam operated by issuing small loans to victims and then demanding multiple times the amount back, using threats, extortion, and cyber harassment. Upon seizing the mobile phones and laptops of the accused, investigators found substantial cryptocurrency holdings. Sambasiva Rao held 53,784 USDT (a stablecoin pegged to the US dollar), Dileep had 12,628 USDT, and Sandeep had 1,182 USDT in their digital wallets. The combined value of the seized cryptocurrency stood at ₹60,43,588.
Commissioner Bagchi emphasized that the scam exhibited a “cyclical financial operation” where fraudulent gains were funneled back into issuing fresh loans, creating a continuous victimization cycle. The police have also traced the cross-border digital links and are coordinating with national and international agencies to track down the Chinese handlers.
The investigation continues, with authorities working to identify more victims and dismantle the broader network involved in exploiting vulnerable individuals through predatory loan apps.