Srinagar, Jan 07: In a decisive blow to organised cybercrime and its sinister linkage with terror financing, Counter Intelligence Kashmir (CIK) has intensified its crackdown on an extensive criminal network operating mule bank accounts to launder proceeds of cyber frauds, illegal online gaming, betting rackets and other unlawful activities.
According to a statement, acting on credible and specific intelligence inputs, FIR No. 06/2025 under Sections 66 (C) and 66 (D) of the Information Technology Act, 2000; Sections 303, 308, 314, 316 (2), 318 (4), 336 (3), 340 (2) and 61 (2) of the Bharatiya Nyaya Sanhita, 2023, and Section 13 of the Unlawful Activities (Prevention) Act, 1967 has been registered at Police Station Counter Intelligence Kashmir, unveiling a sophisticated and well-entrenched financial crime syndicate that posed a serious threat to national economic security and digital safety.
Investigations so far have exposed a carefully orchestrated conspiracy in which accused persons, in active connivance with local and outside operatives, exploited bank accounts of innocent, vulnerable and economically weak individuals, converting them into “mule accounts”.
These accounts, the CIK said, were used as temporary conduits to route massive volumes of illicit money generated from: Cyber frauds and online scams, banned online gaming and betting platforms, Fake investment and trading applications
“Alarmingly, the illegally generated funds are suspected to have been channelled further into terror financing and other activities prejudicial to the sovereignty and integrity of the nation,” it said.
The syndicate functioned through gross violations of banking norms, abuse of KYC procedures, registration of non-existing business establishments on UDHAYAM portal subsequently used for opening of accounts, allotment of Virtual Account Numbers, identity theft, impersonation, and complex money-laundering techniques, deliberately designed to mask the origin and destination of criminal proceeds.
A mule account is a bank or digital payment account used by criminals to receive, transfer, and camouflage illegally obtained money. The account holder—known as a money mule—may be: Complicit, Wilfully ignorant, or completely unaware that their account is being misused.
Mule accounts are a critical component of cyber-enabled crimes, facilitating the layering stage of money laundering by distancing the actual criminals from the victim and law-enforcement agencies. Such accounts are widely used in: Phishing and impersonation scams, online trading and investment frauds, Fake loan apps, Illegal payment gateways or Online gaming and betting frauds.
The CIK said criminals typically initiate frauds through: Phone calls, SMS, WhatsApp or Telegram messages or Social media and search-engine advertisements.
They impersonate police officials, bank/RBI officers, loan agents, job recruiters or investment advisors. Common scams include: Fake online shopping offers, bogus trading and investment apps, online gaming and betting traps, “Digital arrest” threats or Fake KYC or SIM-block warnings.
Victims are coerced into transferring money via UPI, net banking or cards to so-called “safe” or “verification” accounts. In many cases, victims are tricked into sharing OTP, PINs or passwords, enabling fraudsters to take complete control of their accounts.
The Money Trail: From Victim to Crime Syndicate. A typical cyber-fraud money flow follows this pattern
1. Victim Account: Money is transferred or siphoned off.
2. First Mule Account: Receives the funds; retains a small commission.
3. Layering Stage: Money is split and rapidly moved through multiple mule accounts across banks and states.
4. Consolidation Stage: Funds are pooled into shell companies or fake payment processors using bogus invoices or gambling/trading labels.
5. Final Destination is either Cash withdrawals via ATMs and couriers or Conversion into crypto-currency or Transfers to overseas accounts.
This complex layering ensures that only disposable mule account holders surface initially, while the masterminds remain concealed.
The CIK further said investigations reveal a repeated and systematic recruitment model, particularly targeting vulnerable sections:
Identification: Students, unemployed youth, small shopkeepers, daily wage earners, villagers.
Attractive Lures: “Work from home”, “payment processing jobs”, “foreign remittance handling”, “and easy commission income”.
Trust Building: Fake websites, documents, registration numbers; assurances of legality.
Account Takeover: Sharing of SIMs, ATM cards, UPI PINs, internet banking credentials, or opening fresh accounts under syndicate control.
Commission Fixing: Small pay-outs per transaction or monthly payments.
Rapid Replacement: Accounts are abandoned once flagged and swiftly replaced with new recruits.
This method creates both ‘witting mules’, who knowingly participate for money, and ‘unwitting mules’, which unknowingly become part of serious financial crimes.
During the preliminary investigation, 22 suspects operating within the Kashmir Division were identified. After obtaining search warrants from the Special NIA Court, Srinagar, CIK conducted simultaneous searches at 22 locations: (17 locations in District Srinagar, 03 locations in District Budgam, 01 location each in Districts Shopian and Kulgam).
The searches resulted in the seizure of substantial incriminating material, including digital devices and financial records critical to the investigation.
It said so far, 22 individuals have been detained for questioning to establish their precise roles and linkages with cyber frauds, illegal online gaming, betting platforms and suspicious financial transactions.
The investigation is at a nascent stage, and the evidence collected is expected to open floodgates in identifying a much wider network, both within the Union Territory of Jammu & Kashmir and across other parts of the country.
Counter Intelligence Kashmir reaffirms its unwavering resolve to dismantle organised criminal syndicates, choke their financial pipelines, and act firmly against all economic offences and activities that endanger national security.
Those who misuse banking systems—whether knowingly or unknowingly—will face strict legal consequences.
The public is urged to remain vigilant, safeguard their financial credentials, and report any suspicious offers or transactions to the authorities.
Crime in cyberspace is not victimless—it fuels organised crime and terror. CIK stands resolute in protecting the nation’s financial and digital integrity. (KNO)
