‘Felt like I was under hypnosis’: How digital arrest scams dupe Indians of their hard-earned money

On Sunday, Prime Minister Narendra Modi warned listeners of his monthly Mann Ki Baat radio about digital arrest frauds by conmen posing as law enforcement officials. Modi’s word of caution came as Indians lost Rs 120 crore in such scams between January and April, according to government data. The prime minister assured listeners that law enforcement officials would never contact them by phone as part of their investigations.

Digital arrest frauds begin with scamsters claiming to be law enforcement officials phoning targets to say that they have been accused in a criminal case. The conmen tell the targets that they have been put under digital arrest. They are forced to stay on a video call for several hours and asked not to contact anyone else as they are interrogated by scamsters posing as officials. The victims are told that the investigative process requires them to transfer money to the conmen.

The scams are extremely sophisticated: men in police uniforms, staged court hearings, forged government notices are among the range of techniques used to convince targets that they are in trouble. The scamsters are taking advantage of the fear most Indians have of getting involved with the law – even if they know they are innocent, cyber fraud experts said.

The modus operandi

Among those who was duped by scamsters last month was an atomic energy scientist at a government institute in Indore. On September 1, he received a call purportedly from the Telecom Regulatory Authority of India. “The caller told me that a SIM card registered in my name had been used to make illegal transactions and harass a woman over text messages,” the scientist said.

The call was forwarded to a person who claimed to be an officer in the Delhi cyber crime branch. This purported officer appeared in uniform on a video call and told the scientist he had been accused in cases of money laundering and human trafficking and that a warrant of “digital arrest” had been issued for him.

The scientist said that the document he was shown was forged so skillfully that it looked authentic. “It had an Ashok Chakra emblem, the letterhead of the Delhi cyber crime branch and it was signed by one Rakesh Kumar, by which name there is indeed a crime branch officer,” the scientist said. “I checked on Google.”

Over the next two days, the scientist was asked to stay on a video call on WhatsApp. The scamsters said this was mandatory under the rules of digital arrest. On the screen, one scamster posing as the crime branch officer and another one claiming to be an official of the Central Bureau of Investigation questioned the scientist and his wife for hours.

The scientist was told that he had been found guilty and his assets would be examined by the Reserve Bank of India. For this, he had to transfer the money in his savings account, mutual funds and fixed deposits to four different bank accounts. The money would be refunded after investigation within two hours, after which the scientist would get a clearance for his assets from the local police station, the scamsters claimed.

Fearing that his money would be seized if he did not do as ordered, the scientist transferred more than Rs 71 lakh to the scamsters’ accounts. He realised that he had been duped only after going to the police station to get the purported clearance. “I have lost almost all my savings and I am due to retire in four years,” he told Scroll.

Scamsters followed a similar script with at least two other victims who spoke to Scroll. One of them was 82-year-old SP Oswal, the chairman and managing director of Vardhman Group textile company.

In August, Oswal paid Rs 7 crore in four tranches to conmen who kept him under digital arrest. They told Oswal he had been named as an accused in a money laundering case related to Jet Airways founder Naresh Goyal. In this case, the scamsters used the Skype video calling platform, the industrialist told Scroll.

The scamsters blackmailed Oswal into transferring the amount by sending arrest warrants claiming to be from the Enforcement Directorate and a fake Supreme Court order that ordered him to send Rs 7 crore to an “official bank account” titled the “secret supervision account”. After this, they said, Oswal would be released from digital arrest.

Another victim in Jharkhand lost more than Rs 10 lakh to a digital arrest scam in the third week of October. In this case too, the 63-year-old retired professional was told that he had been found to be involved in the money laundering case involving Goyal.

Over two days, conmen in police uniform questioned him over a Whatsapp video call. He was sent a warrant of digital custody and a 70-point guideline that he needed to follow. Later, a person dressed as a judge appeared over a video call for a “digital court hearing”. The fake judge sent him a forged court order asking to pledge all his assets as part of the investigation.

“The documents they sent looked like they were original so I did not doubt that I was being scammed,” the victim from Jharkhand said.

The fear factor

The fear of being arrested is the most potent weapon that the scamsters have against victims of digital arrest frauds, experts told Scroll. The scientist from Indore said that in hindsight it might seem that he had been naive. “But when someone appears on a video call in a police uniform and threatens you with arrest, fear grips you,” he said. “Now it feels like I was under hypnosis.”

Sushil Kumar, a former Bihar nodal officer of the Indian Cybercrime Coordination Centre, said that the digital arrest scam is unusual because the perpetrators willingly show their faces to create fear of legal action while it is the victims who are scared of their names being linked with criminal activities.

The Indian Cybercrime Coordination Centre, or I4C, is controlled by the Union Home Ministry. It ensures coordination between the Centre and all states in cybercrime cases.

The success of these scams have a political underpinning: the increased use of federal law enforcement agencies by the Modi government over the past decade.

“The proactive behaviour of the Enforcement Directorate and Central Bureau of Investigation in recent years has contributed to a fear psychosis among people,” Kumar said. “When people read about ED and CBI investigations every day, they become vulnerable to believe that agencies might well have found them to be guilty.”

Journalist and cyber awareness expert Gautam Mengle agreed. “The scammers have figured out that there is a fear of investigation agencies within society and crafted their modus operandi around that fear,” he explained.

Mengle added that the police and other investigation agencies need an internal review to understand why ordinary citizens go into a panic when they receive calls from people claiming to be law enforcement officials.

The demographic profile of the targets is also crucial: the elderly are more vulnerable. “You would see that a lot of digital arrest victims are elderly and retired people,” said advocate Anuj Agarwal, who runs the non-profit Centre for Research on Cyber Crime and Cyber Law. “This section lacks digital literacy and is more concerned about reputation in society. When threatened with legal action, they are more likely to become victims.”

Agarwal, who runs cybercrime investigation training programmes for the police, said that scammers have a major advantage in the fact that India does not value privacy. “Your Aadhaar data, bank details and phone number is openly available in the scammer ecosystem,” he said. “If someone calls you posing as a CBI officer and reads out your Aadhaar number, it is very likely that you would believe he is a genuine guy. Data leaks need to be fixed first. Otherwise the police will always be doing a catching up job.”

The getaway

Even though the money is routed through bank accounts, the police have been struggling to nail down the scamsters. Cyber awareness expert Mengle said that the scamsters ask the victims to transfer money into bank accounts that are obtained “on rent” from poor people such as street vendors or domestic workers.

“The scammer would give some commission to these people every time a transaction is made,” Mengle explained. “After they get a large sum of money, the amount is quickly routed to a number of other bank accounts in smaller chunks. This can be done within minutes.”

Sushil Kumar, the police officer from Bihar, said that once the money is transferred to several bank accounts, it becomes very difficult to track the trail for a particular case. “One single account might have been used to scam multiple people,” Kumar said. “If the account in question has a pool of money, how do we definitively draw a link between that and the money lost by a particular victim?”

Kumar added that the matter becomes even more complicated if the money is transferred out of the country through cryptocurrency and hawala. The police have found digital arrest cases where foreigners were involved transferring money into crypto accounts in Dubai.