Cyber scam crackdown: Fraud money laundered via bank a/c, converted to foreign currency: ED
New Delhi, August 25:🚨 The Enforcement Directorate (ED) has arrested two accused in the notorious Digital Arrest cyber fraud case, uncovering a vast network where fraud proceeds were laundered—first converted into cash via bank accounts and then into foreign currency through authorized money changers; investigators found links to 163 FIRs and 330 victim complaints across 20 states and union territories.
The Panaji zonal office of the ED arrested Faheem Moin Hussain Syed and Nayeem Moin Syed on August 23 under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002. Both were produced before a special PMLA court in Goa on August 24, where the court remanded them to ED custody for five days until August 29.
The investigation into the case began based on an FIR lodged at the North Goa Cyber Crime Police Station, in which a Goa woman was allegedly duped under the guise of a “digital arrest.” She was led to believe she was under investigation. Subsequently, she was intimidated by claims of constant surveillance via video calls. Between May 21 and June 2, 2025, she was allegedly forced to transfer over ₹2.60 crore into a “secret supervision account.”
According to the ED, the defrauded funds were not confined to the accused but instead reached an organized financial network. The funds were initially routed to a primary layer of dormant and newly opened bank accounts and, within a short period, were distributed to over 400 beneficiary accounts. The funds were transferred through these accounts through various channels, including bank transfers, cash withdrawals, self-checks, and payment gateways.
The investigation revealed links to a network of entities involved in commodity, trading, travel, and foreign exchange businesses. These entities conducted banking transactions totaling over ₹27,850 crore, including cash deposits of approximately ₹2,904 crore. Specifically, ₹584.70 crore was deposited through 61,448 separate transactions using bulk note acceptance machines (BOCs) located at various locations.
The investigating agency stated that this scale and method of cash deposits were inconsistent with normal business activities. The bank accounts of these entities were linked to 330 victim complaints and 163 FIRs filed in 20 states and union territories, with a total loss of ₹417.49 crore reported in these cases.
According to the ED, in 101 complaints, funds defrauded from the same victim were transferred to the accounts of two or more entities within the group during the same fraud. This leads the investigating agency to suspect that these accounts were being used as a common fundraising mechanism rather than as separate business entities.
The investigation revealed that many of the companies used to transfer the money were registered in the names of individuals with very modest financial status. These included employees, drivers, and people living in one-room apartments. Documents showed them as directors of the companies, while the ED claims that control over the bank accounts and the actual operations of the companies was in the hands of others.
On July 17th, the ED conducted searches at 20 premises in Mumbai and Goa under Section 17 of the PMLA. Further searches were conducted at several other premises on August 21st. During the raid, ₹3.25 crore in cash was seized. Additionally, the syndicate’s accounts, which held balances of over ₹30 crore, have been frozen. Digital devices, accounting books, documents, and statutory registers have also been seized, and the investigation is ongoing.
