Chennai zone’s Enforcement Directorate (ED) arrested two people in connection with a digital arrest scam, where the culprits allegedly defrauded Rs 33 lakh from a senior citizen. The ED officials conducted searches at over 30 locations across West Bengal, Madhya Pradesh, Uttar Pradesh, Gujarat and Maharashtra, leading to the arrests of the suspects from Kolkata and Delhi.
The issue came to light when a senior citizen from Chennai filed an FIR, alleging that scammers defrauded her of Rs 33 Lakh.
The suspects are accused of managing mule accounts, converting illicit cash into cryptocurrency, and transferring it abroad. The scam surfaced after the victim, a senior citizen from Chennai, filed an FIR claiming she was threatened with fake allegations and a “digital arrest.”
“Both the arrested suspects played a key role in managing mule accounts, converting illicit cash into cryptocurrency, and transferring it overseas,” said ED as quoted by news agency ANI.
The ED uncovered a complex money laundering network involving mule accounts, cash deposit machines (CDMs), and cryptocurrency transfers. Funds from various digital fraud schemes were funnelled through these methods to conceal and transfer the proceeds of crime.
During the raids, the ED seized multiple electronic devices, incriminating evidence, and cryptocurrency in the form of BTC and USDT. The investigation also revealed that fintech companies failed to comply with KYC norms, enabling cash deposits from bogus entities and individuals.
The role of these fintech companies, their distributors, retailers, and associated bank accounts is being examined.