Digital Arrest Fraudsters Exploit Fear in Rs 3 Crore Banking Scam

Hyderabad cybercrime authorities have arrested three young men from Rajasthan for allegedly providing bank accounts to fraudsters running a nationwide "digital arrest" scam that siphoned at least Rs 3 crore from victims across India, police confirmed on Thursday.

The arrests follow a complaint from a victim who lost Rs 37.70 lakh after being threatened by individuals impersonating police and telecommunications officials, highlighting how cybercriminals are increasingly exploiting fear of legal consequences to defraud unsuspecting citizens.

Background and Context

The "digital arrest" scam represents an increasingly sophisticated form of cyber fraud where criminals impersonate law enforcement or regulatory authorities to threaten victims with immediate legal action unless they transfer money to "secure" accounts for investigation.

According to cybercrime experts, these scams typically begin with unsolicited calls or messages claiming the recipient is involved in illegal activities ranging from money laundering to terrorism financing. The fraudsters then create urgency by threatening immediate arrest, leveraging the public's fear of law enforcement.

Key Figures and Entities

Police identified the arrested individuals as Mohammed Rizwan (20), Vikram Singh (20), and Nikhil Kumar (19), all residents of Rajasthan. According to the investigation, the three allegedly provided their banking credentials to fraud networks in exchange for commissions.

Their accounts were allegedly used as conduits to receive funds from victims before the money was rapidly transferred to multiple other accounts in an effort to obscure the paper trail. Authorities seized three mobile phones from the suspects, which are being examined for evidence of broader networks and communications.

Legal and Financial Mechanisms

The scam exploited gaps in India's interbank transaction monitoring systems, according to investigators. Once victims transferred funds to the provided accounts, the money was immediately moved through a series of accounts across different banks, making recovery efforts challenging.

Cybercrime officials noted that the use of multiple account holders—often young people recruited with promises of easy money—creates layers of deniability for the primary fraud organizers while complicating tracing efforts for law enforcement.

International Implications and Policy Response

While this particular operation appears focused on domestic victims, the techniques mirror similar scams reported globally, suggesting shared methodologies among transnational cybercrime networks. The case underscores growing concerns about the vulnerability of banking systems to coordinated fraud schemes.

Indian authorities have been implementing stricter know-your-customer (KYC) requirements and real-time transaction monitoring, but cases like this demonstrate how criminals continue to exploit regulatory gaps, particularly in the onboarding of account holders who may act as unwitting money mules.

Sources

This report is based on statements from Hyderabad cybercrime police regarding arrests made on December 4, 2025, details from the registered First Information Report, and analysis of digital arrest scam patterns documented by Indian cybersecurity agencies.