ED arrests two for holding senior citizen in Chennai under 'digital arrest'
One suspect was apprehended in Kolkata, while the second was arrested in Delhi as he was attempting to flee the country
Representative Image (File)
CHENNAI: Sleuths from the Directorate of Enforcement (ED) have arrested two masterminds in connection with a digital arrest scam where a senior citizen in the city was defrauded Rs 33 lakh.
According to a note from ED, one suspect was apprehended in Kolkata, while the second was arrested in Delhi as he was attempting to flee the country. Both suspects played a key role in managing mule accounts, converting illicit cash into cryptocurrency, and transferring it overseas. The case stems from an FIR filed by a senior citizen with the city police, alleging that scamsters defrauded her of Rs 33 Lakh.
The victim was threatened with fake allegations and the prospect of a "digital arrest." The ED investigation uncovered a network of layered mule bank accounts that route fraudulent funds.
The enforcement agency also conducted extensive searches at over 30 locations across West Bengal, Madhya Pradesh, Uttar Pradesh, Gujarat, and Maharashtra as part of the investigation.
Multiple mobile phones, laptops, and other electronic devices containing substantial incriminating evidence were seized during the searches. Cryptocurrency in the form of BTC and USDT was also found and seized.
ED investigation revealed a sophisticated system wherein cash withdrawn from mule accounts was converted into cryptocurrency and transferred to entities suspected to be based abroad.
Significant amounts of funds originating from various digital fraud schemes were routed through this method. The accused misused Cash Deposit Machines (CDMs) to deposit cash into the bank accounts of companies that offer fintech services. These funds were then routed to individual accounts, enabling the accused to obtain cryptocurrency.
This cryptocurrency was allegedly used to conceal and transfer the Proceeds of Crime (POC) abroad with the assistance of accomplices using foreign phone numbers.
ED also uncovered major lapses by several fintech companies, which failed to comply with Know Your Customer (KYC) norms and accepted cash deposits from bogus entities and individuals. These cash deposits, running into hundreds of crores, are suspected to be tainted money originating from digital crimes. The role of these fintech companies, their distributors, retailers, and associated bank accounts is being examined, added the press note.
