The Enforcement Directorate (ED), operating out of its Panaji Zonal Office, Goa, conducted search operations across multiple premises in several states on 20 July in connection with a ₹2.60 crore 'digital arrest' cyber-fraud case, seizing assets worth approximately ₹5 crore in total. The seized assets include ₹1.5 crore in Indian currency, foreign currency valued at ₹2 crore, gold and jewellery worth ₹1.5 crore, and a high-end Toyota Fortuner, among other movable assets.

How the Fraud Was Executed

In the case under investigation, a senior citizen was defrauded of ₹2.60 crore by fraudsters who placed her under a fabricated 'digital arrest' — a scheme in which criminals impersonate officials of government agencies to coerce victims. The perpetrators used forged documents and continuous video surveillance to psychologically trap the victim and force her into transferring funds to accounts controlled by the syndicate.

The ED initiated the investigation based on an FIR registered by the Cyber Crime Police Station. Searches were conducted under Section 17 of the Prevention of Money Laundering Act (PMLA), 2002.

The Money Laundering Network Exposed

ED investigators say the case reveals an organised network that systematically monetises cybercrime proceeds and siphons them out of India. According to the ED, defrauded funds are first routed into 'mule' bank accounts — opened in the names of individuals and dormant entities — before being rapidly fragmented across hundreds of accounts.

The layered funds are then funnelled through a web of shell and conduit companies, typically newly incorporated firms operating under names styled as 'commodities', 'enterprises', or 'trading' concerns, which carry on no genuine business and exist solely to receive, layer, and pass on tainted money. These funds are subsequently re-introduced into the formal banking system through structured, high-volume cash deposits via bulk cash-deposit (BNA) machines.

Forex Firms Used to Convert Rupees into Foreign Currency

A distinctive feature of this syndicate's operation, according to the ED, is its use of forex entities — several of which hold legitimate Full-Fledged Money Changer (FFMC) licences but have reportedly been taken over or fronted by the network. These companies accept layered funds through banking channels against fabricated invoices and hand over an equivalent value of foreign currency in exchange.

In effect, tainted Indian rupees are converted into dollars and other foreign currencies, which are then physically moved, spent abroad, or otherwise siphoned out of India, the ED said. The searches were specifically directed at operators, controllers, and conduit entities forming part of this network.

Key Seizures and Next Steps

Investigators also recovered digital devices — including mobile phones and laptops — along with records establishing the movement of funds and the operation of the syndicate. Numerous bank accounts maintained by individuals and shell, forex, and conduit entities involved in the laundering network have been frozen under PMLA provisions.

The seized digital devices, records, and frozen accounts are currently under examination. The ED's investigation into the full extent of the syndicate and its cross-border money flows is ongoing.