Cyber criminals target low-balance accounts to briefly park fraud money

Hyderabad: Low-balance accounts that remain inoperative for months are at risk of falling prey to cybercrime, with their misuse as mules to transfer fraudulent money.

Recent instances show that such accounts are being used to park crores siphoned off from the victims of cyber fraud for a short duration, from where they are transferred to multiple accounts in smaller amounts. The shocking part is that the account holders remain ignorant about the huge deposits and subsequent transfers, at least till the scam is being processed.

In one such incident recently, cyber fraudsters parked Rs 2.5 crore in four accounts, without the knowledge of their holders and transferred the money to 1100 others in just 30 minutes. Some of these transfers were made to digital wallets with the amount as low as Rs 400.

The money belonged to a stockbroker who was lured into investing a huge amount with the assurance of making big profits. A person posing as the representative of a prominent international investment firm presented a lucrative proposal. The stockbroker was also directed to the replicated website of the firm that the broker believed was genuine.

Unaware of the racket and looking at the potential huge profits, the broker agreed to invest money. He was asked to make transfers to four different accounts for the investment. Within half an hour, the entire amount was transferred to multiple accounts.

In another similar incident, the low-balance bank account of a mobile phone accessories dealer in Jammu and Kashmir was used to park Rs 1.98 crore for a short duration without his knowledge. Within hours, the amount was transferred to 38 different accounts of individuals and companies. The original balance of this account was less than Rs 1000.

In this case, a person called the accountant of a company on behalf of the Managing Director (MD), who was out of the office at that moment, asking him to transfer the amount to a certain account for investment purposes. The accountant tried to reach out to the MD but couldn’t. He asked the chartered accountant of the company, who suggested transferring the money, believing that the MD might have some investment plans.

Cyber law expert Advocate Pankaj Bafna said there is a need for the banks to be alert and not allow such multiple transactions within a day. ‘Such transactions clearly look suspicious because of the actual balance of the accounts and their history,’ he said, questioning what the vigilance department of the banks where these frauds took place was doing.

He also said that there is a need for a standard operating procedure to investigate these crimes, as most of the time, the investigators reach a dead end after a point.

Bafna added that generally, the burden of proof is upon the person whose account was fraudulently used to deposit the crime money and make multiple transfers. ‘There is a need for properly trained staff to investigate such crimes,’ Bafna said.

Advocate Harish Pandya, Counsel, Bombay High Court, said in most cases, the multiple recipients of the money transferred withdraw the cash, buy gold coins or bars and subsequently go to another jeweller to make jewellery out of the same.

‘Some others convert the amount into cryptocurrency, which is withdrawn abroad,’ said Pandya, adding that the modus operandi breaks the link, making it difficult to trace the money.

Sources said that among the targeted accounts that are used to make deposits and transfers are those of poor people who are not banking savvy and do not maintain a balance. The multiple recipient accounts are often opened by stealing the identities of other people, at times in the names of tea vendors, economically weaker people or even beggars, without their knowledge.

Explaining the modus operandi further, Chartered Accountant Naresh Dharia said the frauds pre-plan everything and keep accounts ready in bulk before executing the scam. ‘The accounts are made in innocent and underprivileged people’s name with bona fide evidence,’ Dharia said, adding that most of the time these people are unaware of the accounts opened in their names.