The Bengaluru Cyber Crime, Rs 854 Cr Stolen From 84 Accounts, A Trail Of Deceit, Scams, And International Connections

Two entrepreneurs, a 33-year-old MBA graduate and a 36-year-old software engineer, initiated an obscure venture two years ago within a one-bedroom house located in Bengaluru’s Yelahanka neighbourhood. 

Within these walls, two young employees are responsible for maintaining the continuous operation of a major scam with the help of eight mobile phones.

The Startling Cyber Crime

The Bengaluru Cyber Crime police apprehended a MBA graduate, identified as Manoj Sreenivas, and the software engineer, known as Phanindra K, along with four other individuals. 

The capture was instigated by the complaint of a 26-year-old woman who claimed to have been defrauded of INR 8.5 lakh; she stated that she had been lured into an app and, subsequently, a WhatsApp group, promising substantial returns on modest investments. 

Her grievance ultimately led the police straight to the doorstep of Sreenivas and Phanindra.

Subsequent investigations unveiled that the rented house, where these two men had established their base, was a front for an expansive fraudulent network across India. 

Thousands of individuals had fallen victim to the network’s deceptive tactics, enticing them to make small investments with promises of substantial returns on social media.

Remarkably, cybercrime police investigations revealed that a staggering INR 854 crore had transacted through 84 distinct bank accounts over the past two years; however, when the police traced these accounts and halted their operations in September, only INR 5 crore remained.

To corroborate their case, the cybercrime police cross-referenced the National Cyber Crime portal and discovered 5,103 cases throughout India where these criminals had exploited the same set of bank accounts.

Of these, 17 cases originated in Bengaluru, and 487 were attributed to Karnataka. Telangana reported 719 such cases, while Gujarat reported 642, and Uttar Pradesh recorded 505 cases.

How Gaming Apps And Online Casino’s Became The Channel

Investigations divulged that the INR 854 crore had been funnelled into gaming apps, cryptocurrencies like USDT, payment gateways, and even online casinos. 

These funds were presumably intended for encashment by the primary operators of this fraudulent network, suspected to be located in Dubai, UAE, and interestingly, it is suggested that the Bengaluru operators may have never had physical contact with the main operators.

Dubai To China Connection

The Cyber Crime police are currently probing the Dubai-based operators who evidently orchestrated this extensive fraudulent network through online communication with the operators in Bengaluru. 

The investigation’s aim is to ascertain whether the Dubai operators have any connections to Chinese operatives.

Many Other Such Cases

This situation mirrors a comparable case that transpired in Hyderabad in July where the Cyber Crime police in Hyderabad exposed a scheme where as many as 15,000 people were swindled of INR 712 crore through 113 bank accounts created under the names of fake companies. 

In that case, the trail of connections was analogous, leading to Chinese operatives and local actors linked to Dubai-based operators, some of whom had ties to a terror group’s funding.

“In the Bengaluru case, no links to Chinese operators or any terror financing have been found. Investigations are still ongoing to identify the key operators,” noted Bengaluru Police Commissioner B. Dayananda.

The Modus Operandi

Haziresh Tilledar, a Bengaluru Cyber Crime Official, explained, “Indian operators received a commission of one to three per cent on every transaction they facilitated. They opened local bank accounts without undergoing the KYC process.”

The local agents were instructed to employ an app that mimicked bank OTPs, sending them to the local phone numbers associated with the fake bank accounts; this ruse was meant to create the illusion that the fake accounts were being used locally.

The use of eight mobile phones round the clock is suspected to facilitate the seamless transfer of funds between fake accounts and mule accounts, which would enable the siphoning of money through gaming apps, cryptocurrencies, and online casinos.

“Online casinos and gaming apps appear to be a significant source of money laundering, as there are no records of winnings. One of the main culprits had plans to create his own gaming apps to launder his ill-gotten gains from the fraud,” an official from the Bengaluru police explained. “The laundered money traverses international banks and is portrayed as investments in various foreign companies,” the official added.

The investigation also discovered that these local agents invested as much as INR 1.37 crore, earned from the fraudulent network, in software, a casino, a resort, and a garment factory.

According to the police, WhatsApp and Telegram were used to entice victims into the scam and initially, victims were encouraged to invest small sums ranging from INR 1,000 to INR 5,000 daily, with the promise of profits, noted another police official.

How It Happened

In the Bengaluru case, which was registered on April 28, the 26-year-old woman reported that her friend had encountered the app “The Winegroup” and shared her success story of earning returns after making small investments; sufficiently intrigued, the victim also installed the app.

“We were included in a WhatsApp group called ‘Small Group of TWG2006,’ which had six group admins; I invited some friends to join as well, and they deposited small amounts as returns into my bank accounts. 

Thus, she began transferring additional funds to 29 different UPI IDs, totaling INR 8.5 lakh. The group admins later refused to repay the principal amount or the returns and stopped responding to messages,” the 26-year-old victim recounted.

A Bank Employee

The Bengaluru Cyber Crime police’s investigation gained traction when they identified a bank employee who had facilitated the opening of one of the bank accounts used for the fraud. 

This account, where the funds were funneled, had been established under the guise of a fictitious Karnataka-based company.

The trail led to a person named Vasanth Kumar, who had initiated the bank account; it was revealed that he, along with an associate named Chakradhar, had been tasked with opening bank accounts using fake company names within a network.

Police sources disclosed, “The probe unveiled that the funds swindled in the Bengaluru case were first routed to an account of a fake firm in Tamil Nadu and then to another firm’s account in Karnataka.”

When questioned, the individual in whose name the account was established disavowed any connection to the bank account, claiming that his credentials had been misused.

Police investigations disclosed that two sham companies in Karnataka and Tamil Nadu were linked to as many as 45 bank accounts. 

“These companies had no employees or offices; they are shell companies,” the police added.

An official noted that this is likely the first instance where bank accounts associated with online fraud have been tracked through NCRP records to assess the extent of cybercrime.

“There may be similar local gangs in other parts of the country. We are reaching out to the Directorate of Enforcement to conduct further investigations,” the police stated.

The Sob Story

Following the arrests of Sreenivas and Kumar on September 9, the two argued during their bail hearings that they had been unjustly implicated by the police. 

They contended that the complainant had voluntarily invested the funds, and the accused had not solicited her for deposits.

On September 30, the two were granted bail in one of the cases by a local Bengaluru court, but they remain in custody in connection with other cases registered in Bengaluru over the past two years.

Additionally, the Karnataka High Court issued an interim stay on the cybercrime investigations involving the six men; nonetheless, 16 other cases are pending against the accused.

Cyber Crimes on the Rise in India and Globally

In an age dominated by technology and interconnectedness, the proliferation of cybercrime is a pressing global concern. 

Like many other nations, India has witnessed a significant upsurge in cybercrimes over the past decade. 

The phenomenon reflects a broader global trend where criminals exploit digital transformation to orchestrate a wide range of illicit activities, from financial fraud to espionage, often with international implications.

Factors Fueling the Rise of Cybercrime:

1. Increased Internet Penetration: The rapid expansion of internet access, smartphones, and affordable data plans has brought millions of people online. While this connectivity offers numerous opportunities, it also exposes individuals and organizations to cyber threats, especially as many may lack the digital literacy needed to protect themselves.

2. Digital Transformation: As businesses and governments embrace digital transformation, they inadvertently create new attack surfaces for cybercriminals. Vulnerabilities in online systems, networks, and databases become tempting targets for hackers seeking financial gain, disruption, or data theft.

3. Sophisticated Cybercriminals: Criminals have grown increasingly sophisticated, forming well-structured organizations with skilled hackers, often operating across borders. These groups leverage advanced tools, techniques, and tactics to evade detection and execute large-scale cybercrimes.

4. Evolving Attack Vectors: The methods employed by cybercriminals have evolved. Phishing, ransomware attacks, identity theft, and cryptocurrency-related fraud are just a few examples. These techniques prey on the human element, exploiting individuals’ trust and technological vulnerabilities.

5. Globalization: The global nature of the internet and the interconnectedness of economies provide cybercriminals with a borderless playground. Attacks can be launched from one country, target entities in another, and launder money through a third, making it difficult for law enforcement to trace and apprehend perpetrators.

The Indian Perspective

India, home to a vast and diverse population, is particularly vulnerable to the rise in cybercrimes. As digital services and e-commerce flourish, the country has become an attractive target for cybercriminals. 

While the Indian government has taken steps to bolster cybersecurity, including establishing the National Cyber Coordination Centre (NCCC) and drafting the Data Protection Bill, challenges persist. 

India needs more cybersecurity professionals and a need for stringent data protection laws.

Global Implications

The rise of cybercrime in India is not an isolated issue; it is part of a global trend. 

Governments and organizations worldwide are grappling with the same challenges; international cybercriminal networks operate with relative impunity, leading to transnational crimes, data breaches, and even threats to national security and state-sponsored cyber-espionage continues to be a persistent issue on the global stage.