A nameless private enterprise was set up by a 33-year-old MBA graduate and a 36-year-old software engineer, two years ago in an one-bedroom house in Bengaluru Yelahanka. Two youngsters, hired as employees, lived in that house and were directed to keep eight mobile phones active through day and night.
The Bengaluru Cyber Crime police arrested the MBA graduate — identified as Manoj Sreenivas — and the software engineer — Phanindra K — along with four other persons in the second week of September.
What to led the police to these men was a 26-year-old woman’s complaint, which said that she had been cheated of Rs 8.5 lakh, an Indian Express report said. According to her complaint, she was cajoled — first on an app and then on a WhatsApp group — on the pretext of higher returns for smaller investments. Thanks to her statement, the police was led right to the doorstep of Sreenivas and Phanindra.
Investigations revealed that the house, which was taken on rent by the two men was a front for a massive fraud network spread across India. Thousands of people had been cheated by the network after being enticed to make small investments and get higher returns on social media.
Reportedly, over Rs 854 crore had moved quickly through 84 separate bank accounts within the last two years, cyber crime police’ investigations revealed. But the twist is that when the police, in September, traced these accounts and froze their operations, the remaining amount was just Rs 5 crore.
To cross-refer their case, the cyber crime police checked the National Cyber Crime portal only to find that 5,103 cases across India were registered wherein these same set of bank accounts had been used by the criminals. Of these, 17 cases alone were from Bengaluru and 487 were from Karnataka. Police found that Telangana reported 719 such cases, whereas Gujarat reported 642 and 505 were from Uttar Pradesh.
The investigations found that this sum of Rs 854 crore had moved to gaming apps, cryptocurrency such as the USDT, payment gateways and even online casinos. These were meant to be encashed later by the main operators of this fraudulent network, suspected to be based out of Dubai, UAE. These Bengaluru operators seem to never have met the main operators physically, police suggest.
The Cyber Crime police is currently looking into the operators stationed in Dubai, who only established this extensive fraud network by corresponding with the operators in Bengaluru over social media. The investigation aims to determine whether the operators in Dubai have any connections to Chinese operatives.
This comes in context with a similar case that took place in Hyderabad in July. The Cyber Crime police revealed that as many as 15,000 persons were cheated of Rs 712 crore via 113 bank accounts, which were created on the name of fake companies. Now in that case, the chain of connection was similar and it led to Chinese operatives — local operatives linked to Dubai-based operators who further had Chinese links. At the time, the Hyderabad police even found a terror funding link, where allegedly some of the funds were diverted to some crypto wallets linked to the terror group, Hezbollah.
“In the Bengaluru case, no links to China operators or any terror financing has been found. Investigations are still underway to find the key operatives,” Bengaluru Police Commissioner, B Dayananda said on September 30, the Indian Express report quoted.
Haziresh Tilledar, Bengaluru Cyber Crime Official said, “Indian operators received a commission of one to three per cent on ever transaction they facilitated. They opened local bank accounts without going through the KYC process.”
The local operatives were asked to use an app that would mimic bank OTPs — sent to those local phone numbers that were linked to the fake bank accounts — to the Dubai-based operators as well. This was meant to show that the fake accounts were being used locally.
It is suspected that the reason behind wanting to keep eight mobile phones active 24×7 was to aid the successful transfer of funds between fake accounts and mule accounts. This will then enable them to siphon the money via gaming apps, crypto currency and online casinos.
“The online casinos and gaming apps seem to be a key source of money laundering as there are no records of winnings. One of the main accused was planning on starting his own gaming apps to launder his own earnings from the fraud,” a Bengaluru police official was quoted as saying. “The laundered money goes through international banks and is shown as investments in various foreign companies,” the official added.
The probe has also found that these local operatives made an investment as high as Rs 1.37 crore — earned from the fraud network — on software, one casino, resort and a garment factory.
According to the police, WhatsApp and Telegram were used to lure the victims into falling for the scam. “Initially they are asked to invest small amounts ranging from Rs 1,000 to Rs 5,000 every day as profit,” another police official noted.
In the Bengaluru case, which was registered on April 28, the 26-year-old woman said that her friend had come across the app, “The Winegroup”, and shared with her friends that she earned some returns after making small investments. Following this, the victim also decided to install the app.
“We were made a part of a WhatsApp group called ‘Small Group of TWG2006′ which had six group admins. I asked some of my friends to join as well. They deposited small amounts of returns to my bank accounts. I started to transfer more funds to 29 different UPI IDs, amounting to a total of Rs 8.5 lakh. The group admins later refused to pay the principal amount or the returns. They did not respond to messages,” the 26-year-old victim said.
The Bengaluru Cyber Crime police’ investigation gained momentum when they found a bank employee who had assisted in opening of one of the bank accounts used for fraud. That account — where the funds were being transferred — was opened in the name of a fake Karnataka-based company.
The police traced the trail to one Vasanth Kumar, who had opened the bank account and found that he along with an associate, Chakradhar were allegedly tasked with opening bank accounts under fake company names by a network.
Police sources said, “The probe revealed that the funds swindled from the victims in the Bengaluru case were first transferred to an account of a fake firm in Tamil Nadu and then to the account of another firm in Karnataka.”
“When the person — in whose name the account was opened — was questioned, he reported that he was not linked to the bank account and that his credentials may have been misused,” Bengaluru police was quoted as saying.
Police investigations revealed that two fake firms in Karnataka and Tamil Nadu had as many as 45 banks accounts linked to them. “There were no employees or offices for these companies. They are shell companies,” police added.
An official said that probably this is the first time bank accounts linked to an online fraud have been tracked on NCRP records to check the extent of a cyber crime.
“There may be similar local gangs in other parts of the country. We are writing to the Directorate of Enforcement to conduct further investigations,” police stated.
Following the arrest of Sreenivas and Kumar on September 9, the two — in their bail hearings — argued that they had been falsely incriminated by the police. “The complainant voluntarily invested the amount, the petitioners have not approached her to deposit,” the accused said.
On September 30, the two were granted bail by a local Bengaluru court in one of the cases, but the two are still in custody in other cases registered over the last two years in Bengaluru.
An interim stay was also granted by the Karnataka High Court on the investigations in the cyber crime wherein the six men were arrested. However, there are 16 other cases against the accused.
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