In what investigators are calling one of the largest and most sophisticated cyber frauds in India, the Maharashtra Cyber Police have uncovered a sprawling “digital arrest” scam that defrauded a 72-year-old share trader of a staggering ₹58 crore.
According to officials, the fraudsters used a network of 6,500 bank accounts spread across the country to circulate, layer, and conceal the stolen funds — a scale never before seen in a single cybercrime case.
So far, seven suspects have been arrested, including account holders (known as mule operators) and their handlers, while several others are under investigation.
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A Maze of 6,500 Accounts to Evade Detection
The Maharashtra Cyber Police’s Financial Crimes Unit said the accused devised a sophisticated system to ensure that funds moved instantly between accounts, making it nearly impossible for law enforcement to freeze or trace them.
A senior officer involved in the investigation explained:
“The fraudsters had mapped an intricate network of bank accounts across states. Some served as withdrawal accounts where money was pulled out using cheques to break the audit trail. Others acted as pass-through accounts, transferring funds through ATMs or digital channels to unrelated banks.”By the time a suspicious transaction was reported, the money had already changed hands multiple times, often moving across five to seven accounts within minutes. The officer added that the criminals ensured CCTV cameras could only capture one person per transaction, further complicating identification efforts.
The Trap: Fake ED and CBI Officers Stage a “Digital Arrest”
The scam began on August 19, when the 72-year-old trader received a call from men posing as senior officials from the Enforcement Directorate (ED) and Central Bureau of Investigation (CBI).
The callers claimed they had detected illegal transactions linked to his bank account and accused him of money laundering. They told him he was being placed under “digital arrest” — a term meant to simulate the authority of law enforcement while psychologically intimidating the victim.
To make the deception more convincing, the fraudsters sent the trader forged government documents, complete with official logos and digital seals. They instructed him to transfer his funds to “safe verification accounts” for audit, promising that the money would be returned once cleared.
Between August 8 and October 19, the victim and his wife transferred ₹58.13 crore via RTGS to accounts provided by the fraudsters — spread across 18 banks in Maharashtra, Gujarat, Delhi, and other states.
How the Scam Was Discovered
The fraud came to light when the victim’s bank flagged large, suspicious transfers and alerted the Maharashtra Cyber Police. Investigators immediately froze several accounts and began tracing the flow of funds.
Police identified three mule account holders who had allowed their accounts to be used for money movement in exchange for commission. These individuals were:
- Abdul Khulli (47), resident of Malad, Mumbai
- Arjun Kadwasra (55), resident of Chira Bazaar
- Jetharam (35), resident of Mumbai Central
All three were arrested on Wednesday, followed by four more arrests on Thursday. The accused have been booked under sections of the Indian Penal Code, the Information Technology Act, and the Prevention of Money Laundering Act (PMLA).
Investigators believe dozens more account holders across states may have unknowingly participated in the scam.
International Links: Calls from Laos and Cambodia
Officials revealed that the calls to the victim were traced to Laos and Cambodia, countries that have recently emerged as hubs for cybercrime operations targeting Indians.
“Digital arrest” rackets are often run from call centers in these countries, where trained operators impersonate Indian law enforcement officials. They use voice modulation software, AI-generated documents, and spoofed caller IDs to make their scams appear legitimate.
A police source explained:
“These syndicates combine intimidation, impersonation, and money laundering. They exploit people’s fear of government action to make them comply instantly.”Investigators suspect that part of the stolen money was converted into cryptocurrency and moved through foreign exchanges before being reintroduced into India through mule accounts.
Cyber Expert Prof. Triveni Singh Speaks: “Digital Arrest Is a Psychological Weapon”
Reacting to the case, Prof. Triveni Singh, former IPS officer and one of India’s foremost cybercrime experts, said this fraud highlights a dangerous shift in cybercriminal tactics.
“The so-called ‘digital arrest’ is not merely a financial scam — it is a psychological weapon,” Prof. Singh told reporters.“Fraudsters misuse the authority of government agencies to create panic. They combine fear, urgency, and deception to make the victim act without verification.”He added that the operation demonstrates the evolution of cybercrime from hacking computers to hacking human psychology.
“These scams rely less on technology and more on emotional manipulation,” he said. “Even educated professionals can fall prey because they fear legal consequences. The criminals exploit this fear to extract massive sums of money.”
Prof. Singh emphasized that such scams are increasingly common in India, and urged authorities to launch a nationwide awareness campaign to teach citizens how to recognize and report them.
Maharashtra Cyber Police Seeks Interpol Assistance
The Maharashtra Cyber Police said it is coordinating with Interpol and other international law enforcement agencies to trace the masterminds operating from abroad. The agency has also approached the Reserve Bank of India (RBI) and major banks to enhance detection systems for multi-account layering and mule transactions.
“Our goal is not only to arrest the local operatives but also to dismantle the international network behind them,”
a senior official stated.
Authorities have also begun working with cryptocurrency exchanges to trace digital wallets linked to the stolen funds.
A Wake-Up Call for Digital India
Investigators warn that the “digital arrest” scam marks a new frontier in cybercrime — one where fear replaces malware as the primary weapon.
“Digital arrest scams are the new face of organized cybercrime,” Prof. Singh cautioned.
“They weaponize fear, authority, and technology together — and unless we build digital awareness at every level of society, even the most vigilant citizens can become victims.”
