ED arrests two masterminds in Digital Arrest fraud scam
Scamsters duped him of Rs 33 lakh
The Enforcement Directorate (ED) has arrested two masterminds in connection with the digital fraud scam, which involved duping a senior citizen woman of Rs 33 lakh in Chennai, the agency said on Monday. One suspect was apprehended in Kolkata while the other man was arrested in Delhi as he was trying to escape from the country. The arrests come from an FIR lodged by the senior citizen with the Chennai police, alleging that he was duped of Rs 33 lakh by the scamsters. "The two arrested suspects played a key role in managing mule accounts, converting illegal cash into cryptocurrency and transferring it abroad," the agency said in a statement.
Laptops and Electronic Devices Seized
The ED's Chennai regional office arrested the accused after its ongoing investigation, which revealed a network of layered mule bank accounts used to route fraudulent funds. The ED also conducted extensive searches at over 30 locations in West Bengal, Madhya Pradesh, Uttar Pradesh, Gujarat and Maharashtra as part of the probe. During these searches, several mobile phones, laptops and other electronic devices were seized, containing sufficient evidence. "Cryptocurrencies in the form of BTC and USDT were also found and seized," the ED said. The investigation revealed a sophisticated system where cash withdrawn from accounts was converted into cryptocurrencies and transferred to dubious entities based abroad. "Large amounts of money arising out of various digital fraud schemes were routed through this method," the agency said.
Big mistake of Fintech Company
Additionally, the ED said that the accused misused Cash Deposit Machines (CDMs) to deposit cash into bank accounts of companies providing fintech services. These funds were then transferred to personal accounts, enabling the accused to receive cryptocurrency, the ED said. This cryptocurrency was allegedly used to hide the proceeds of crime (POC) and transfer it abroad with the help of associates using foreign phone numbers. The ED also revealed major lapses by several fintech companies that failed to comply with Know Your Customer (KYC) norms and accepted cash deposits from fictitious entities and individuals. "These cash deposits amounting to hundreds of crores are suspected to be tainted money arising out of digital crimes," the agency said. The role of these fintech companies, their distributors, retailers and related bank accounts is being investigated.