How Safe Is Your Money And Personal Information; How Bank Employee’s Collusion With Criminals Are Increasingly Leading To Cyber Frauds And Cybercrimes

Today, Cybercrime, with its wide range of illicit activities carried out through digital channels, poses significant threats to individuals, businesses, and governments worldwide.

From hacking and phishing personal information to identity theft and ransomware attacks, cybercriminals are exploiting vulnerabilities in computer systems, networks, and online platforms to execute their schemes.

These crimes not only result in financial losses but also compromise sensitive data, erode trust in digital systems, and sabotage cybersecurity infrastructure.

As technology continues to advance, the scope and complexity of Cybercrime are expected to increase, stressing the critical importance of proactive measures to mitigate risks and protect against cyber threats.

The Secret Handshake
The new wave of collaboration between criminals and bank employees in orchestrating cyber frauds has been revealed through cybercrime investigations, showing one common denominator – the utilization of fake bank accounts.

Investigations conducted by cyber police have exposed instances where victims of cyber frauds were unaware of the existence of accounts opened under their names, rendering them unwitting casualties of cybercriminal activities.

How do these networks of fraudulent bank accounts function, and how do they facilitate the laundering of illicit funds derived from criminal attempts?

To illustrate, consider a case reported in February at the Cyber East police station in Gurugram, where an individual was defrauded of INR 1.3 crore.
Just a few weeks before, enticed by promises of substantial returns shared on a Telegram where he had seen members sharing screenshots of extraordinary profits they made from the stock market and wanting to replicate the same, he was initially asked to transfer a few lakh rupees.

Seeing a handsome return on the same and lured by the quick profits, he transferred INR1.3 crore more to the given bank account only to discover that both his money and the promise of profits evaporated into thin air.

Cyber Strategies
Ensuing investigations by law enforcement have uncovered numerous instances where victims were directed to transfer funds to fictitious accounts, unbeknownst to the genuine account holders.

In one such case, tracing the money trail led the police to three bank executives employed at Kotak Mahindra Bank in Gurugram.

Two deputy managers, Mahesh Kumar and Vishwakarma Maurya, alongside an assistant manager, Mohit Rathi, were apprehended by Gurugram Police on February 27, 2024, along with another suspect, Mohammad Hayat, linked to a cyber fraudster gang.

Further scrutiny revealed that these bank employees received cash incentives for every fraudulent account provided to cybercriminals operating in Nuh, Haryana.

The Police invstigation revealed that the above executives would visit Bilaspur and Farrukh Nagar in Haryana.

The purpose was to target vulnerable demographics, such as daily wage earners or people from low-income groups, collect their documents for account openings,
only to communiate later that their accounts couldnot be opened due to not fitting the eligibilty criteria.

However, the accounts were nevertheless opened using mobile numbers obtained through fake SIM cards provided by Hayat.

Subsequently, the police found that three bank accounts had been opened using one fake SIM and suppose the original number of any ‘new’ applicant was already present in the lender’s database; the bank managers replaced them with the fake numbers.

The investigation uncovered a network of over 2,000 counterfeit bank accounts established over the past seven months, showcasing the extent of collusion between bank insiders and cybercriminal syndicates in perpetrating financial crimes.

Even MNC’s Targeted
Similarly, during the investigation into the case involving an MNC executive who fell victim to cyber fraudsters, the cyber cell of the Delhi police uncovered that the illicitly obtained funds, amounting to INR 9 lakh, were routed through Yes Bank’s Chhatarpur branch in the capital.

The supossed account holder, as per official records, denied any knowledge of such an account being opened in their name. However, they disclosed having shared their details with a Yes Bank employee named Roshan Kumar.

The apprehension of Kumar, employed as a sales officer at Yes Bank’s Chhatarpur branch, subsequently led the Delhi police to identify another sales officer, Anikesh, and Mohammed Mukeem, a former branch manager at the private lender who had been transferred to the Lajpat Nagar branch.

Together, they were involved in the opening of at least 12 fraudulent accounts, receiving INR 2 lakh in compensation from cyber fraudsters. Mukeem admitted to retaining INR 1.2 lakh, while the remainder was divided among the other two perpetrators.

In yet another recent incident, the Gurugram police made arrests on March 14 related to the case of fake bank accounts.

Two bank executives from Yes Bank’s Rohini branch in Delhi were apprehended. Investigation revealed that these individuals had convinced a mutual acquaintance to open a Yes Bank account for the purpose of facilitating cyber fraud.

Unlike previous instances, the account holder was complicit in the fraudulent activity.

The Modus Operandi –
Investigations have uncovered that fraudulent accounts are typically purchased for sums ranging from INR 15,000 to INR 2 lakh.

There is a higher demand for current accounts in private banks, and the remuneration provided to bank executives is contingent upon the transaction limits associated with these accounts.

Fake accounts constitute a crucial component of cyber fraud schemes. Once funds are acquired from a victim, they are swiftly transferred by fraudsters to another counterfeit account.

Through a complex network of such accounts, the money is laundered, often converting it into cryptocurrencies to obfuscate its origins.

It’s important to differentiate between two types of bank accounts utilized by cybercriminals.

The first category comprises “mule accounts,” where either the genuine account holders grant access to cyber fraudsters or act as intermediaries for transactions on their behalf.

The second category encompasses fake accounts, where unwitting individuals become victims of the fraud, as explained earlier.

The Increasing Numbers
The recent spate of arrests involving bank executives in the Delhi-NCR region within a mere three-week period casts a troubling shadow over the state of cybersecurity.

The surge in cybercrimes, resulting in losses amounting to thousands of crores, is an indicator of the escalating prevalence of illicit activities within the country.

According to statistics from the National Cybercrime Reporting Portal, since August 2019, over 3.26 million complaints have been lodged, leading to the filing of 66,000 FIRs.

Alarmingly, nearly half of these complaints were recorded in 2023 alone, highlighting the exponential growth of cybercrimes.

Delhi stands out, registering 755 cases per 100,000 residents in 2023, thus claiming the dubious distinction of having the highest per-capita cyber complaint rate among all states.

Despite the implementation of measures such as Know Your Customer (KYC) protocols aimed at verifying individuals’ identities, the recent increase of fake accounts linked to cybercrimes shows a critical gap in the existing security framework.

Thus, it is important for banks to take immediate and decisive action to ensure stringent adherence to KYC norms, thereby fortifying defenses against fraudulent activities.

Fake bank accounts serve as instrumental tools for cyber fraudsters, facilitating the concealment and laundering of illicit proceeds.

Therefore, combating the bane of financial cybercrimes in India necessitates a concerted crackdown on these fraudulent accounts, targeting their nexus within the banking system.

Points To Consider
1) It is alarming that fraudsters within banking institutions possess the capability to sidestep KYC procedures to create fake accounts, while legitimate customers face the risk of being locked out of their accounts if KYC is not renewed promptly.

This discrepancy shows the urgency for banks to enhance internal safeguards and scrutinize account creation processes rigorously.

2) Likewise, the complicity of SIM card providers and service providers in enabling fraudulent activities merits closer scrutiny.

Penalties and deterrent measures should be imposed on negligent service providers who facilitate the issuance of SIM cards to malicious actors.

Hence, addressing the proliferation of fake SIM cards is paramount in curbing cybercrimes.

Regulatory authorities must implement effective measures to tackle this menace and hold accountable those involved in the illicit trade of counterfeit SIM cards.

3) The interconnectedness of various systems, including mobile service providers, banking infrastructure, Aadhar verification, and law enforcement, creates vulnerabilities exploited by fraudsters.

Therefore, a coordinated effort among relevant agencies is essential to consolidate efforts and develop a unified approach to combatting cybercrimes effectively.

The Last Bit, the recent wave of arrests involving bank executives and the escalating prevalence of cybercrimes in the Delhi-NCR region spotlight the urgent need for comprehensive measures to bolster cybersecurity across India.

With losses amounting to thousands of crores and a significant increase in reported cybercrime incidents, it is evident that the existing security infrastructure is being challenged by increasingly sophisticated criminal tactics.

The increase of fake accounts intertwined with cyber frauds highlights critical vulnerabilities within the banking system, necessitating immediate action to reinforce KYC protocols and crack down on illicit financial activities.

Additionally, addressing the complicity of SIM card providers, enhancing coordination among regulatory authorities, and fortifying inter-agency collaboration are all essential steps in combating cybercrimes effectively.