Introduction

In one of the largest coordinated actions against cyber-enabled financial crime in Karnataka, the Criminal Investigation Department (CID) has exposed a vast syndicate operating tens of thousands of mule bank accounts used by cyber fraudsters to launder illicit funds. The operation resulted in the arrest of 13 key masterminds in Bengaluru and the identification of more than 42,000 suspicious accounts statewide.

Background and Context

Money mule networks have become a critical enabler for cyber fraud operations, allowing criminals to rapidly move and withdraw stolen funds while masking their identities. These accounts are typically registered in the names of unsuspecting or economically vulnerable individuals, making detection and attribution difficult.

Recognizing a sharp rise in fraud cases linked to such accounts, CID-led Cyber Crime Police launched a months-long intelligence-driven operation spanning the entire state.

Technical Details of the Mule Account Network

• Fraudsters reportedly paid Rs 10,000 to Rs 20,000 per account to obtain access.
• Recruited account holders were often daily wage labourers with limited awareness of digital banking risks.
• In several cases, ATM cards, SIM cards, and account credentials were physically collected by intermediaries.
• The mule accounts were used to receive and rapidly disperse proceeds from online scams, phishing attacks, and impersonation frauds.

Timeline of the Operation

• Months of intelligence collection and transaction analysis by CID cyber units.
• Identification of common transaction patterns linked to multiple fraud complaints.
• Statewide alerts issued to all 29 CEN police stations to trace and verify suspicious accounts.
• Simultaneous raids conducted at over 100 locations in Bengaluru, Mysuru, Davanagere, Mangaluru, and Belagavi.
• Arrest of 13 accused identified as coordinators and facilitators of the mule account syndicate.

Impact and Scope

• Over 42,000 mule bank accounts flagged for further investigation.
• Seizure of laptops, mobile phones, debit cards, and SIM cards used in fraudulent operations.
• Disruption of a major financial backbone supporting multiple cybercrime networks.
• Potential linkage to hundreds of cyber fraud cases reported across Karnataka.

Law Enforcement Commentary

Investigators noted that many legitimate account holders were unaware their accounts were being misused until questioned by police. Officials emphasized that even indirect participation, such as sharing account details for commission, constitutes a serious criminal offence under Indian law.

Response and Mitigation Measures

• CID has intensified coordination with banks to flag abnormal transaction behavior.
• CEN police stations have been directed to proactively verify high-risk accounts.
• Public advisories issued warning citizens not to share bank details, ATM cards, or passwords under any circumstances.
• Continued financial forensics to trace end beneficiaries and upstream cybercrime operators.

Outlook

This crackdown highlights a strategic shift toward targeting cybercrime infrastructure rather than isolated fraud cases. As digital payment adoption grows, mule account syndicates are expected to become more sophisticated, making sustained intelligence sharing between law enforcement, banks, and telecom providers essential.

The operation sends a strong deterrent message that financial facilitation of cybercrime, whether intentional or negligent, will attract serious legal consequences.

Sources

• The Indian Express
  CID busts mule account racket in Karnataka; over 42,000 bank accounts flagged, 13 arrested
  https://indianexpress.com/article/cities/bangalore/cid-busts-mule-account-racket-in-karnataka-12-arrested-over-42000-bank-accounts-flagged-10518094/
• Hindustan Times
  Karnataka CID busts mule account distribution ring, 13 held
  https://www.hindustantimes.com/india-news/karnataka-cid-busts-mule-account-distribution-ring-13-held-101770406406774.html
• Deccan Herald
  Karnataka CID detects over 40,000 mule accounts in major cyber crime crackdown
  https://www.deccanherald.com/india/karnataka/in-1st-major-op-karnataka-cyber-command-raids-mule-account-networks-3889552