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Chennai Police have arrested seven people for allegedly helping cybercriminals divert ₹22.3 crore from a Tamil Nadu government bank account through 46 fraudulent online transactions. The money was meant for improving healthcare infrastructure in rural areas under the 15th Finance Commission Health Grant Scheme.
The Central Crime Branch (CCB) of Greater Chennai Police is investigating how the government funds were transferred into multiple bank accounts and subsequently withdrawn or moved elsewhere.
Who Were the Seven Arrested?
Police identified the accused as Sellapandian (56) of Ekkatuthangal, Annadurai (56) of Triplicane, Lokanathan (65) of Bengaluru, Abdul Rahman (28) and Jagadeesh (31) of Madurai, and Ashraf Ali and Kannadasan of Sivaganga.
According to investigators, all seven were employed by private companies and allegedly allowed fraudsters to use their bank accounts in exchange for commissions. The accounts were used to receive money diverted from the government account.
Police said the suspects withdrew portions of the money in cash and transferred other amounts to different bank accounts, making it necessary to trace the subsequent movement of funds.
During the investigation, officers seized seven mobile phones, 14 SIM cards, a bank cheque book and a passbook from the accused.
Sellapandian, Annadurai and Lokanathan were arrested first and remanded in judicial custody. The remaining four were arrested subsequently.
How Was ₹22.3 Crore Diverted From Government Accounts?
The stolen funds were allocated to the Tamil Nadu government’s Rural Development and Panchayat Raj Department for implementing the 15th Finance Commission Health Grant Scheme. The programme was intended to strengthen healthcare facilities in rural areas. The funds were maintained in a centralised bank account at a branch in CIT Nagar, Chennai.
According to police, the account could be operated online using credentials issued to authorised Block Development Officers (BDOs). Between October 12 and October 30, cybercriminals allegedly misused the login credentials of officials from Keelaiyur in Nagapattinam district, Mandapam in Ramanathapuram district and Dharapuram in Tiruppur district.
Using those credentials, the suspects allegedly carried out 46 unauthorised online transactions, transferring ₹22.3 crore into 25 different bank accounts.
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Investigators believe the accounts helped the fraudsters receive and redistribute the money after it was removed from the government account.
What Is the Status of the Investigation?
Police are examining the financial transactions to identify the individuals who organised the suspected fraud and recruited the seven account holders.
Investigators are also tracing how the alleged masterminds established contact with the accused and arranged the movement of the stolen funds through their accounts. Efforts are underway to recover the diverted money and establish the wider network behind the transactions.
The arrests have brought attention to the use of mule accounts in cyber-enabled financial crimes, where bank accounts belonging to other individuals are used to receive and transfer fraudulently obtained funds.
The investigation remains ongoing, with police seeking to identify those responsible for the original unauthorised access and the subsequent diversion of public money intended for rural healthcare.
