The Directorate of Enforcement (ED) has arrested four individuals in connection with a cyber investment scam exceeding Rs25 crore, which involved deceiving innocent people into investing in the stock market through fraudulent applications. The arrests were made in Bengaluru, with three suspects—Shashi Kumar M (25), Sachin M (26), and Kiran SK (25)—taken into custody on August 15, followed by the arrest of Charan Raj C (26) on August 21.
According to an ED release, the investigation stems from FIRs lodged by various state police departments and has uncovered proceeds of crime surpassing Rs25 crore. The accused were involved in establishing companies and opening bank accounts to launder the money generated from these cyber scams.
The Special Court under the Prevention of Money Laundering Act in Bengaluru has remanded the four suspects to ED custody for seven days.
The ED has conducted 13 searches at various locations, seizing incriminating materials such as mobile phones and other digital devices. Notably, one victim from Faridabad was cheated out of Rs7.59 crore after being convinced to invest in stocks through a fake app. In Noida, a businessman lost Rs9.09 crore after being added to a WhatsApp group named GFSL Securities official Stock C 80, where he was directed to download an app and transfer money to bank accounts provided by customer support.
Similarly, a doctor in Bathinda was defrauded of Rs5.93 crore after being induced to download the GFSL Securities app while browsing Facebook for investment opportunities.
The scam operated by luring victims through various social media platforms, including Facebook, Instagram, WhatsApp, and Telegram, with false promises of high returns and exclusive IPO allotments. The fraudsters illegally acquired hundreds of SIM cards via Telegram groups and linked them to multiple shell company bank accounts or used them to run WhatsApp accounts for scamming purposes.
The ED revealed that the accused incorporated numerous shell companies to facilitate the laundering of the scam’s proceeds. These companies often used co-working spaces as their registered addresses and submitted forged bank statements during the incorporation process. The proceeds were eventually converted into cryptocurrency and siphoned off abroad to evade detection.
The agency also highlighted a concerning trend, noting that individuals from India have been trafficked to the Golden Triangle region (Thailand, Laos, and Myanmar) under the pretext of job offers, where they are exploited in cyber fraud operations.