Hyderabad: Drug cartels, cyber gangs ramp up use of ‘mule accounts’ to launder money

Drug cartels and cyber fraudsters are increasingly using mule accounts to move illegal money. Telangana and Delhi police recently found 59 such accounts. The CBI has identified 8.5 lakh mule accounts nationwide, with some bank officials and agents helping open them illegally

Hyderabad: After cyber fraudsters, the drug cartels now prefer the ‘mule accounts’ to transfer the illicit money from one source to another.

In the recent drug bust by the Telangana and Delhi police, the cops identified over 59 mule accounts through which drug money transactions were done.

---

“These mule accounts have become a primary channel for laundering money obtained through cyber fraud and drugs. The accounts are opened on commission and used to obscure financial trails,” said an official of Telangana Cyber Security Bureau.

While the law enforcement agencies nationwide block lakhs of mule accounts every year, the mule account supplier rings arrange fresh accounts and sell or rent them to cyber fraudsters and drug mafia.

In June, the Central Bureau of Investigation conducted searches at 42 locations in five States in the country and around 8.5 lakh mule accounts were identified across various banks.

The CBI found that certain bank officials, agents, aggregators, bank correspondents, middlemen and e-Mitras are facilitating the opening of mule accounts. All are paid a substantial amount as commission for their services. The accounts are opened either without proper KYC norms or customer due diligence or initial risk assessment.

“Locally, we are initiating action against the bank officials for colluding with the mule account rings and opening accounts illegally. Many bank officials were arrested in different cases by Telangana police,” said the official.

Cyber fraudsters or drug cartels use different methods to divert the proceeds from the mule accounts swiftly. “Once fraud proceeds are credited into a mule account, money is immediately ‘layered’ into other accounts or converted into cryptocurrency. In many cases, the mule accounts are kept active only briefly – often a day or two – with funds transferred out via bulk payout facilities, cheques, ATMs or UPI at once,” said an official of Hyderabad Cyber-crime station.

During the recent drug bust in Delhi, by the EAGLE Force of Telangana police, the cops identified 22 persons who collectively had ‘lent’ 59 bank accounts to drug cartels to receive the money. The majority of the mule account holders are from North East India.

“People fall for easy money and give their bank accounts to mule account agent rings. In a few cases, poor illiterate people are conned into opening accounts for financial benefits or tricked into parting with their KYC, using which the accounts are opened in collusion with the bank officials or agents,” said the official.