ED Freezes Rs 2.81 Crore, Raids Uncover 24 Shell Firms and International Links
The Enforcement Directorate (ED) has dismantled an international cybercrime syndicate accused of defrauding Indian citizens of an estimated Rs 159 crore. The investigation, which involved extensive raids and a series of arrests, has revealed the sophisticated network’s operation through digital deception, shell companies, and cryptocurrency.
Eight individuals have been arrested in connection with the scheme, with the ED freezing Rs 2.81 crore in accounts tied to Cyber Forest Technology Pvt Ltd, a key entity within the syndicate. In a crackdown that spanned 17 locations across India, ED officials seized mobile phones, cheque books, company stamps, and critical digital evidence. The raids exposed coordination efforts, particularly in Tamil Nadu and Karnataka, where money laundering activities took place via 24 shell companies. Evidence also pointed to transactions being processed through cryptocurrency, enabling the syndicate to transfer funds abroad.
On October 10, the ED filed a Prosecution Complaint (PC) under the Prevention of Money Laundering Act (PMLA) with a Bengaluru special court, targeting the eight individuals and their respective shell firms. By October 29, the court had taken cognisance of the case, marking a significant development in the ongoing probe. According to the investigation, the syndicate’s roots extend beyond India, with key figures based in Hong Kong and Thailand allegedly involved in establishing shell companies and facilitating complex cross-border transfers.
The syndicate reportedly preyed on unsuspecting targets through popular social media platforms, including Facebook, Instagram, WhatsApp, and Telegram, offering them enticing but fraudulent investment opportunities. These schemes featured promises of high returns on fake stock investments and initial public offerings (IPOs), luring in victims through sophisticated “pig-butchering” tactics—a scam that uses trust-building to defraud large sums. Once a potential investor expressed interest, they would be placed in WhatsApp or Telegram groups populated by fake profiles. The group chats were designed to create the illusion of legitimate trading and professional guidance.
The ED’s complaint details how the fraudsters exploited the names of established financial institutions like ICICI Securities, GFSL Securities, and SMG Global Securities to increase credibility. Transactions below Rs 5 lakh were commonly used to avoid raising suspicion among regulatory bodies. Once trust was established, victims were instructed to download fraudulent investment apps that showcased well-known stocks and IPOs, showing inflated returns to encourage higher investment.
In a cruel twist, the syndicate employed a “digital arrest” tactic, with scammers posing as Customs or Central Bureau of Investigation (CBI) officials. Under this guise, they would coerce victims into paying large sums, threatening them with arrest unless funds were “regularised.” Many victims, fearing legal repercussions, succumbed to the demands and transferred significant amounts to shell company accounts controlled by the syndicate.
To further evade detection, the syndicate used hundreds of SIM cards acquired through Telegram groups. These SIM cards, often connected to shell companies or used for setting up WhatsApp accounts, provided a layer of anonymity, allowing the fraudsters to operate without immediate traceability. The syndicate reportedly sourced the SIM cards from various suppliers across India, activated them, and sent them to other operatives abroad.
The creation and management of shell companies were central to the syndicate’s elaborate scheme. Fake bank statements and fabricated documents were submitted in corporate filings, with several “directors” completely unaware of their involvement. Mule accounts facilitated the transfer of proceeds, which were then converted to cryptocurrency to ensure seamless international transfers.
Among those arrested, Charan Raj C is said to have been a key recruiter, responsible for securing directors and managing bank accounts critical to the operation. Shashi Kumar M allegedly orchestrated the establishment of shell companies to launder the proceeds, while Sachin M managed several entities and recruited dummy directors. During a search of Raj C’s residence in Bengaluru, officials seized extensive documentation linked to the syndicate’s activities.
The case marks a major breakthrough in the fight against cybercrime, as authorities continue their efforts to dismantle and prosecute those involved in the complex, international fraud operation.
