Rs 23 crore gone: Ex-banker duped in Delhi’s biggest ‘digital arrest’ scam

Representative photo

A 78-year-old retired banker from Delhi was allegedly defrauded of 22.92 crore over more than a month by cybercriminals who posed as officials from the Enforcement Directorate and Mumbai Police. The accused convinced him that his Aadhaar and landline details were linked to terror funding, The Indian Express reported.

Over six weeks, they placed ex-banker Naresh Malhotra under what is called a “digital arrest,” forcing him to liquidate assets and transfer money as part of a so-called verification process.

The ordeal started on August 1, when a woman claiming to be an Airtel representative told him that his landline number had been misused to open several bank accounts in Mumbai. She further alleged that these accounts were connected to a Rs 1,300 crore terror funding case linked to Pulwama.

Fear of arrest

Malhotra was informed that he was under investigation and could be arrested under the National Investigation Agency (NIA) Act. Soon after, the caller connected him with others posing as Mumbai Police officials, who directed him to join a video call and follow their verification process.

During the call, the fraudsters showed him a photograph of a man they claimed was involved in a major bank fraud and asked if he had any connection with him. Malhotra denied any link.

The scammers then pressured him to share personal and financial information, including details of his house, bank accounts, fixed deposits, stocks, and lockers. To make their claims look real, they even sent him forged documents that appeared to be a chargesheet and an arrest warrant.

“They prepared a charge sheet against me and sent it, telling me to read it before they called again. They also shared an arrest warrant. I was forbidden from talking to anyone. They warned me I would be detained for six months and if I spoke to anyone, they would arrest me on anti-money laundering charges,” Malhotra was quoted by India Today as saying.

The fraudsters later told Malhotra that his bail had been “arranged,” but only if he fully cooperated. They claimed that all his bank accounts would now be under investigation. Malhotra was strictly warned not to share any details with anyone and was made to believe that he was being monitored round the clock.

Malhotra continued following their instructions over the next few weeks, convinced that he was under official scrutiny. On August 4, he began liquidating his stock market investments. The proceeds, around Rs 12.84 crore, were then transferred into several bank accounts provided by the scammers.

Even before this, he had already moved Rs 14 lakh from his personal account. Later, another set of transactions took place in which an additional Rs 9.90 crore was transferred as per the fraudsters’ directions.

The scammers controlled every step of his financial life. Even small withdrawals for paying household staff had to be cleared by them. “It is as if I was possessed and had lost all my senses. My thinking process was completely taken over by the scammers,” Malhotra was quoted by The Indian Express as saying.

Money trail across India

Between August 4 and September 4, Malhotra visited his banks almost daily. The scammers instructed him to transfer funds through RTGS. His money was spread through 4,236 smaller transactions across states including Uttarakhand, West Bengal, Andhra Pradesh, and Tamil Nadu. Notably, none of the accounts were based in Delhi.

According to the police, this ‘layering’ of funds is a common tactic in digital arrest cases, making recovery extremely difficult. “We have seen money move in as many as 20 layers. The golden hour of reporting was lost here, which makes freezing funds harder,” explained Rajneesh Gupta, Joint Commissioner of Delhi Police’s IFSO unit.

Malhotra, who retired in 2020 after nearly five decades in banking, stayed silent for weeks, not even telling his family. Finally, on September 19, when the fraudsters demanded an additional Rs 5 crore to be sent to a private firm’s account in West Bengal, he refused.

He told them he would rather deposit the money with the Supreme Court Registrar than transfer it to a private company. When they threatened him with arrest, he challenged them to go ahead. The scammers then disconnected the call. That same day, he gathered courage and filed a police complaint, leading to an FIR.

By September, the total amount transferred had reached Rs 22.92 crore. Malhotra had by then lost Rs 9.68 crore from Central Bank, Rs 8.34 crore from HDFC Bank, and Rs 4.90 crore from Kotak Mahindra Bank. Bank managers later said they had not suspected anything unusual, as Malhotra appeared calm, even having tea during transactions.