New Delhi, 24 August (H.S.):

The Enforcement Directorate (ED) has arrested two people in Goa in connection with a network allegedly involved in converting proceeds from cyber fraud carried out through “digital arrest” scams into hawala funds and foreign currency. The agency arrested Faheem Moin Hussain Syed and Naeem Mueen Saiyyed on Sunday under the Prevention of Money Laundering Act (PMLA). Both were produced before the Special PMLA Court in Goa.

The ED said the action is part of an investigation initiated on the basis of an FIR registered at the North Goa Cyber Crime Police Station on June 9, 2025. In the case, a woman from Goa was allegedly intimidated through a “digital arrest” scam and coerced into depositing more than Rs 2.60 crore into a purported “secret surveillance account” between May 21 and June 2, 2025.

The investigation revealed that the fraud proceeds were allegedly not retained solely by the cybercriminals but were channelled through an organised network, where the money was first converted into cash and subsequently into foreign currency. Licensed Full Fledged Money Changers authorised by the Reserve Bank of India were allegedly used for the purpose.

According to the ED, the victim’s funds were distributed within a few hours through the first layer of dormant and newly opened bank accounts before being transferred to more than 400 beneficiary accounts. The investigation subsequently led to a network of entities linked to commodity trading, trade, travel and foreign-exchange businesses.

Together, these entities allegedly carried out banking transactions worth more than Rs 27,850 crore. Of this amount, around Rs 2,904 crore was deposited in cash. Approximately Rs 584.70 crore of the cash was deposited at various locations through 61,448 bulk note acceptance machines.

The ED said 330 victim complaints and 163 FIRs have been registered across 20 States and Union Territories in connection with accounts linked to these entities. The complaints involve an alleged total loss of Rs 417.49 crore. In 101 cases, the proceeds defrauded from a single victim were allegedly routed to two or more entities within the network during the same fraud.

The agency said searches were conducted at 20 premises in Mumbai and Goa on July 17, followed by searches at additional premises on August 21. During the operations, Rs 3.25 crore in cash, digital devices, documents and statutory registers were seized. The seized material is currently being examined.

According to the ED, companies allegedly used for layering and laundering the proceeds were incorporated in the names of individuals from modest financial backgrounds, including employees, drivers and people living in one-room houses. These individuals were shown as directors of the companies, while the actual control over their bank accounts and business operations allegedly remained with other persons.

The ED said further investigation into the case is underway.

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Hindusthan Samachar / Jun Sarkar