Mule accounts: CBI continues crackdown on cybercrimes with searches in five states, nine held

In continuation of the on-going anti-cybercrime efforts of the Central Bureau of Investigation (CBI) to combat multiple types of digital crimes like Digital Arrest Scams, the federal probe agency launched coordinated searches at 42 locations across five states including Delhi, Rajasthan, Haryana, Uttarakhand and Uttar Pradesh.

These searches are part of CBI’s ‘Operation Chakra-V,’ which has been launched against the menace of mule bank accounts being opened by organized cyber fraudsters involved in digital arrest scams, impersonation, fraudulent advertisements, investment frauds and UPI-based financial frauds to transfer the money looted from the accounts of the victims.

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Following the searches, nine accused have been arrested, including middlemen, agents, aggregators, account holders, and bank correspondents for their alleged involvement in the operation and facilitation of opening of mule bank accounts.

According to the agency, these cyber fraudsters are being allegedly helped by omissions of certain bank officials, agents, aggregators, bank correspondents, middlemen and e-Mitras who are facilitating in opening of mule accounts used for receiving and transferring proceeds of crimes as well as enabling withdrawals from such accounts.

The CBI initially registered an enquiry to unearth the entire conspiracy of opening of mule accounts, the role of the bankers and the middlemen and to understand the existing bank’s rules and guidelines.

The inquiry revealed that more than 700 branches of various banks across India have opened around 8.5 lakh mule accounts, that were either without proper KYC norms or Customer Due Diligence or Initial Risk Assessment.

According to the findings by the agency, the branch managers of the banks have also allegedly failed to conduct enhanced due diligence in respect of certain suspicious transaction alerts generated by the systems.

It was found that some of the banks also failed to send the acknowledgement/thanking letters to customers to indirectly verify the addresses of the account holders.

The guidelines issued vide the RBI Master Circular and certain internal guidelines issued by the banks have been violated in this connection, hence, a FIR has been registered for alleged offences of criminal conspiracy, cheating, forgery, use of forged document as genuine under relevant sections of the law, and also offence of criminal misconduct by the officials under Prevention of Corruption Act.

The CBI found several incriminating documents and digital evidence, mobile phones, Bank Account Opening Documents, Transactions Details, KYC documents during the searches that have been seized and identification of individuals including middlemen involved in opening a mule bank account was done.

The arrested accused are being produced before the court, while the investigation is continuing.