Close on the heels of Prime Minister Narendra Modi asking people to be alert to the threat of ‘digital’ arrests, probe agencies say they are taking action against this category of cybercrime with the ED filing a charge sheet in the case and the I4C issuing a fresh advisory.
The Enforcement Directorate (ED) issued a statement on Saturday (November 2, 2024), saying it filed a prosecution complaint before a special Prevention of Money Laundering Act (PMLA) court in Bengaluru last month against eight people accused of “misleading” the public. through “fake” IPO allocations and stock market investments through fraudulent apps.
“Probes have uncovered a network of cyber frauds in India, which include fake stock market investments and digital holding schemes carried out mainly through social media platforms like Facebook, Instagram, WhatsApp, and Telegram.”
“Known as the ‘pig-butchering’ scam, stock market investment scams lure victims with promises of high returns, using fake websites and misleading WhatsApp groups that appear to be linked to reputable financial firms,” ​​the Enforcement Directorate said.
Also read: What is ‘digital arrest fraud’ and how can you protect yourself?
Scammers, he said, build credibility through fake ads and fabricated success stories, which eventually lead victims to invest significant amounts.
ED said some victims of this scam were “deceived” under the guise of false arrest (digital arrest) by Customs and CBI, ultimately making them transfer huge funds to various shell or dummy companies in a false “fund regularization process.”
It said the ‘digital’ arrest scam involves fraudsters impersonating law enforcement officials, scaring victims into sending their savings by creating scenarios that show the victim’s illegal involvement.
India’s Cyber ​​Crime Coordination Center (I4C) issued a public advisory on Sunday asking people to “Beware of Digital Arrest” warning that “the one making the video call is not the police, CBI, Customs officials or judges”.
“They are cybercriminals,” said the organization under the Ministry of Interior.
The advisory asked people not to fall for these “tricks” and report the crime “immediately” by calling the national cybercrime helpline 1930 or logging on to the portal www.cybercrime.gov.in.
Prime Minister Modi during his monthly radio address ‘Mann ki Baat’ on October 27 flagged the issue of scams targeting people who are ‘digitally’ arrested and urged people to adopt the mantra of “stop, think and act” when facing the problem. scam, asserting that the move will provide them with digital security.
The ED said it has registered a money laundering case for this crime after studying multiple police FIRs and arrested eight persons, also accused in the charge sheet filed on October 10, namely Charan Raj C, Kiran SK, Shahi Kumar M, Sachin M, Tamilarasan , Prakash R, Ajith R and Aravindan and 24 related companies.
All those arrested are now lodged in prison under judicial custody.
“This cybercrime case involves proceeds of crime to the tune of ₹ 159 crore and the court has taken cognizance of the ED charge sheet on October 29,” he said.
The ED said the fraudsters, in order to carry out this scam, obtained hundreds of SIM cards linked to bank accounts of shell companies or used to create WhatsApp accounts.
“The anonymity provided by this untraceable SIM allows scammers to deceive victims at the risk of immediate detection.”
“The fraudsters set up 24 shell companies in Tamil Nadu, Karnataka and several other states to facilitate the acquisition and laundering of cyber crime proceeds,” he said.
This shell company, which is registered mainly at the address of the workplace (if there is no real business), has used false bank statements in filings before the Registrar of Companies as proof of the start of the company’s business.
Scammers operated through “mule” accounts to transfer funds and the proceeds were eventually converted into cryptocurrency and transferred overseas, the ED probe found.
One of the accused, Charan Raj C, played a “key” role in this scheme by recruiting individuals as directors and arranging the opening of bank accounts.
Shashi Kumar M helped “merge” several shell companies that were instrumental in collecting and integrating the proceeds of crime into the banking system.
Kiran SK, who is associated with several shell companies according to ED, has connections with bank accounts of various shell entities created by overseas scammers, who submit fake documents to incorporate the companies.
Sachin M, a Director in several companies, “confessed” to helping fraudsters overseas to recruit dummy directors and facilitate bank accounts, “aware” of the illegality, according to the agency.
Tamilarasan played an “important” role in facilitating these activities, collaborating with Indian and overseas scammers and he “helped” open bank accounts for shell companies like Cyberforest Technologies Pvt. Ltd., and “knowingly” continued the operation despite knowing about its links to cybercrime, the agency said.
The ED said it had “incriminating” evidence like check books and communication records to say the men were involved in a syndicate that laundered the proceeds of cyber fraud in India.
Published – November 03, 2024 13:03 IST
