ED arrests two over Rs 27,850 crore cyber-fraud network

The Enforcement Directorate arrested two men in Goa for allegedly operating a cyber-fraud network involving fake digital arrests and money laundering. The agency said linked entities recorded transactions exceeding Rs 27,850 crore and were connected to hundreds of complaints

Panaji: The Enforcement Directorate (ED) arrested two men under the Prevention of Money Laundering Act (PMLA) for operating a massive cyber-fraud network that defrauded victims through fake “digital arrests” and laundered proceeds into foreign currency, the agency said on Monday.

The ED produced the accused, identified as Fahim Moin Hussain Sayed and Naim Mueen Sayyed, before the Special PMLA Court in Goa on Monday, securing five days of custody until August 29.

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The accused were arrested on Sunday following a complaint by a woman victim in North Goa, the agency said in a statement.

The money laundering probe stems from an FIR registered by the Cyber Crime Police Station, North Goa.

A local resident suffered a loss of Rs 2.60 crore after fraudsters placed her under continuous video call surveillance under the guise of a “digital arrest” and coerced her into transferring funds into fraudulent “secret supervision accounts” between May 21 and June 2 this year.

Investigating officers discovered the money entered an organised apparatus designed to convert cyber-fraud proceeds into cash and foreign currency through RBI-licensed full fledged money changers.

The victim’s money was routed within hours through an initial layer of dormant and newly opened bank accounts before being dispersed among more than 400 beneficiary accounts through transfers, cash withdrawals, self-cheques and payment gateways.

The trail then extended to an interconnected network of commodity, trading, travel and foreign-exchange entities, the ED said.

The agency said that the trail exposed an interconnected network of trading, travel, and foreign-exchange entities that recorded banking transactions exceeding Rs 27,850 crore. This network deposited Rs 2,904 crore in cash, including Rs 584.70 crore deposited via 61,448 separate transactions at bulk note acceptance machines.

The bank accounts of these dummy entities link to 163 FIRs and 330 complaints across 20 states and Union Territories, representing total reported victim losses of Rs 417.49 crore.

In 101 of these complaints, funds belonging to a single victim were routed to two or more entities within the same group during the same fraud, indicating that the accounts functioned as a common pool rather than as independent businesses.

The syndicate incorporated companies using names of drivers and employees living in single-room tenements to act as dummy directors while controlling the operations externally.

The ED conducted searches across 20 premises in Mumbai and Goa on July 17 and August 21 and yielded Rs 3.25 crore in cash and froze bank balances exceeding Rs 30 crore. The agency also seized digital devices, books of account, records and statutory registers, which are currently under examination.