Cyber fraudsters in India, handlers in Hong Kong, Dubai

Mumbai police cyber branch reveals major cybercrimes operated from Hong Kong and Dubai; Indians transfer money via cryptocurrency; victims lured through social media ads.

MUMBAI: Seductive advertisements on social media offering work-from-home opportunities and big returns from stock market investments are all-too-common cyber frauds encountered by many. A recent investigation by the Mumbai police cyber branch has revealed that these, as well as other major cybercrimes, are being operated from places like Hong Kong and Dubai, and Indian nationals involved in the frauds transfer the money to their bosses in the foreign countries via cryptocurrency.

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According to cyber branch statistics, in January 2024, 368 major cybercrime cases were registered, of which only 38 cases were solved. In 2023, 4,169 cybercrime cases were registered in the city.

“The major cyber rackets operating presently are share market investment scams, part-time job cons, KYC update frauds, sextortion frauds, credit card or bank account update frauds, matrimonial frauds, gift frauds and courier frauds,” said a police officer who has been probing cyber fraudsters for the past few years. “The other scams don’t yield that much money but in the share market and part-time job frauds, the earnings usually run into crores.”

A Matunga police cyber team headed by DCP Prashant Kadam, Inspector Deepak Chavan and API Digambar Pagar recently arrested two persons identified as Ashish Ghantala, 32, and Sanjay Patel, 43, both residents of Surat in Gujarat who were running a racket to lure people with high returns on share market investments. On interrogating them, the police arrested two more persons—Kaval Malhotra, 45, and Ayush Malhotra, 21, both residents of North Delhi.

The case was registered based on a complaint lodged by Radha Pillai, 46, a resident of Matunga who was cheated of ₹49 lakh in the name of stock market investment. “While investigating Pillai’s complaint and tracing the bank accounts involved in the commission of the fraud, we traced the Surat residents and found that they were the ones in whose names the accounts were opened by the fraudsters,” said a police officer associated with the probe. “Once the money reached Surat, it was withdrawn in cash from ATMs immediately and then dispatched to Delhi through hawala channels. From Delhi, the money was transferred to Dubai and Hong Kong, where the masterminds behind the rackets are based, via cryptocurrency.”

The police officer said that the accused had used more than 50 bank accounts in the last three months. When they checked the accounts, they found that around ₹25 crore had moved through them in just two months, and therefore suspected that the money was transferred to foreign countries. “This was the volume of money accumulated by one gang in barely two months,” said the officer. “There are several such gangs operating from foreign destinations so you can imagine the money earned.” Deepak Chavan, senior inspector at Matunga police station, said that the police managed to freeze ₹20 lakh found in one of the bank accounts.

“The government needs to understand that the money going to foreign countries like this is a national loss, apart from the individual losses,” said cybercrime investigator and expert Ritesh Bhatia. “We have seen that various illegal applications used by cyber fraudsters have Chinese codes, and it is clear that the racket in question was being operated from Hong Kong. Apart from concentrating on awareness, the government also needs to take stringent steps to stop this digital pandemic through which we are losing crores of rupees to foreign countries.”

The police said that in stock market frauds, the victims were mostly lured through advertisements on social media. “After the unsuspecting victims contact the telephone number given in the advertisement, their mobile number is added to a WhatsApp or Telegram group,” said the officer. “They are then asked to download some applications and once they do that, the accused can monitor all the activity on their mobile phones.”

The officer added that after tracking the activities on the victims’ mobile phones, the frauds would lure them to invest in certain shares. “The victims generally start with small sums and soon earn unbelievably high returns,” he said. “The returns are reflected in the virtual accounts visible in the applications and in most cases, the victims are even allowed to withdraw the amounts, prompting them to invest even higher sums.”

However, after investing sizable amounts, when the victims try to withdraw amounts from their virtual accounts, they cannot. They are then given various excuses, right from technical glitches to the accounts being frozen by authorities and so on. The victims are then asked to pay more money as charges for getting the accounts restored.

In part-time job scams, victims are usually lured by advertisements on social media. They are initially given simple tasks like ‘liking’ videos and are paid a few hundred rupees for this. Later, they are asked to participate in “paid tasks” where they deposit some money and get paid double or more after completing the tasks. “For the first few tasks, the scamsters pay them,” said the police officer. “However, once the complainant invests sizable amounts, the defrauding begins.”

Cyber fraudsters operate through bank accounts opened by dubious means, and there are several gangs whose sole work is to get these accounts opened using either bogus or fraudulently obtained documents. “These gangs operate from Mumbai, Navi Mumbai, Surat, Ahmedabad, Gandhinagar, Kerala and Vijay Nagar (Rajasthan),” said the police officer. “Earlier, the accounts were required by businesses for committing GST frauds and operating hawala channels; now such accounts are opened and provided only to cyber frauds.”

The bank-account gangs have several tricks up their sleeve. Sometimes, they take commercial premises on rent for a month or two and use the rent agreements to open several current bank accounts. “They also pay ₹10,000 to ₹20,000 to unsuspecting people to provide their identity documents for opening bank accounts,” said the police officer. “The accounts are then used by the scamsters for a commission ranging from five per cent to 10% of the money deposited.”

The police usually track down the bank account-holders and in some cases the middleman and hawala or crypto agents, but the trail goes cold here. “We cannot reach the masterminds in foreign destinations to whom money is sent through virtual currency,” said the officer.

Conning the conner

The police, in their investigations, have found that the foreign handlers are majorly dependent on Indians to get their money via crypto currency. They pay commissions at various levels: to the men who provide them with bank accounts, to hawala operators who transfer the cash within the country, and to crypto operators who finally transfer the money to foreign destinations.

“Earlier the foreign handlers used to acquire bank accounts from Deeg in Rajasthan,” said the police officer. “However, now these are being acquired from either Mumbai, Kerala or Surat. The reason is that the Rajasthan-based gangs, once they had huge sums of money deposited in the bank accounts, would simply refuse to transfer them further, knowing full well that the scamsters sitting in Hong Kong or Dubai would not be able to act against them in any manner.”

The government has already put out a cybercrime helpline number, 1930, apart from the cybercrime portal where people can lodge complaints about cyber frauds. The fraudulent bank accounts can be frozen if the victims report the incidents with the golden hours. “However, in the case of stock market frauds and part-time job frauds, this is not possible, as by the time the complainants learn that they have been cheated, the money has been transferred to Dubai or Hong Kong,” said the police officer.

The police said that apart from awareness, the government needed to do much more, with the help of agencies like banks, mobile companies and foreign agencies, to stop cyber frauds.