₹29.17 Lakh ‘Digital Arrest’ Fraud: Hyderabad Cyber Crime Police Arrest Two, USDT Trail Under Scanner
Retired Employee Duped Through Impersonation of Delhi Police, CBI and ED; 16 Cases Reportedly Linked to Fraud Network Across India
(Judicial Quest News Network)
HYDERABAD: In a significant breakthrough against the growing menace of cyber-enabled financial crime, the Cyber Crime Police, Hyderabad City, have arrested two alleged operatives of a ‘digital arrest’ fraud racket accused of facilitating the laundering of fraudulently obtained funds through mule bank accounts, cash deposits and cryptocurrency transactions.
The arrests of Mohd Ashfaq Hussain (27) and Ahmed Najeeb Uddin (27), both residents of Ameerpet, Hyderabad, followed a technology-assisted investigation into a case in which a 63-year-old retired employee and his daughter were allegedly cheated of ₹29,17,668 by fraudsters posing as officials of the Delhi Police, the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
A third accused, identified as Sachin, a Bengaluru resident, is reportedly absconding. Investigators are pursuing efforts to trace and apprehend him and unravel the wider network behind the alleged financial transactions.
Fake Law-Enforcement Threats Used to Extract ₹29.17 Lakh
According to the case details, the fraud dates back to March 3, 2025, when the complainant began receiving calls from individuals allegedly impersonating senior law-enforcement officials.
The callers falsely claimed that he was implicated in a money-laundering case involving ₹68 million and threatened him with arrest.
To lend credibility to their fabricated allegations, the fraudsters allegedly circulated forged official documents and claimed that the complainant’s Aadhaar particulars and fingerprints had been misused in connection with the purported offence.
The victim and his daughter were allegedly persuaded to disclose personal and banking information and transfer money under the pretext of verification, with assurances that the funds would subsequently be refunded.
The callers allegedly intensified the pressure by threatening arrest and directing the family to maintain secrecy in the name of national security.
Acting under this alleged deception and coercion, the complainant and his daughter transferred a total of ₹29,17,668. When the promised refund failed to materialise, the complainant realised that he had been cheated and approached the police, leading to the registration of the case.
Alleged Mule-Account Network and Cryptocurrency Trail
The investigation reportedly revealed that the two arrested accused had come into contact with the absconding accused, Sachin, through WhatsApp while facing financial difficulties.
Sachin allegedly devised a mechanism to route the proceeds of digital-arrest fraud through multiple bank accounts, using cash deposit machines (CDMs) to obscure the trail of transactions and complicate efforts by investigating agencies to identify the ultimate recipients.
As per the police account, A-1 allegedly collected bank-account particulars from A-2 and shared them with A-3.
After the fraudulently obtained funds were transferred into the account provided by A-2, the arrested accused allegedly withdrew the money through cheques and redeposited the cash into various bank accounts through CDMs, acting on instructions from the absconding accused.
The funds were allegedly channelled into the purchase of USDT, a cryptocurrency-linked digital asset, and subsequently sold online in exchange for Indian rupees. The two arrested accused allegedly received commissions for facilitating the transactions.
The alleged modus operandi points to the use of intermediary account holders and cryptocurrency transactions to distance the proceeds of cyber fraud from the original victims.
Investigators are examining the financial trail to establish the movement of funds and the respective roles of those involved.
Two iPhones Seized; 16 Cases Reportedly Under Investigation
During the operation, the Cyber Crime Police seized two Apple iPhones from the possession of the arrested accused. The police further stated that approximately 16 cases have been registered across India in connection with the alleged fraudulent activities, indicating the possible wider reach of the network.
The two accused were apprehended at Ameerpet on October 17, 2026, by a team led by Inspector of Police K. Narayana Reddy and were subsequently brought to the Cyber Crime Police Station for further investigation.
The accused were produced before the competent court in Hyderabad. Further investigation is underway to trace the absconding accused, scrutinise bank and cryptocurrency transactions, identify additional suspects and ascertain the full extent of the alleged fraud.
Criminal Provisions Invoked
The case has been registered as Crime No. 568/2025 under Sections 66(C) and 66(D) of the Information Technology Act, 2000, and Sections 111(2)(b), 318(4), 319(2), 336(3), 338 and 340(2) of the Bharatiya Nyaya Sanhita, 2023 (BNS).
The invoked provisions concern alleged identity theft and computer-related personation, cheating, cheating by personation, forgery-related offences and other offences specified in the FIR. Their precise application will be determined in accordance with the evidence and the course of the judicial proceedings.
Senior Officers Supervise Operation
The operation was conducted under the guidance of S. Chaitanya Kumar, IPS, Deputy Commissioner of Police, CCS, DD, Hyderabad City, and under the direct supervision of R. G. Siva Maruthi, Assistant Commissioner of Police, Cyber Crime Police Station, Hyderabad City.
Inspector K. Narayana Reddy, Sub-Inspectors Monmohan Goud and G. Sivakumar, along with other members of the team, participated in the operation.
A Cautionary Lesson in Digital Deception
The case once again highlights how cybercriminals allegedly exploit fear of arrest, fabricated legal documents and the authority of investigative agencies to intimidate unsuspecting citizens into transferring money.
The alleged use of mule accounts, cash deposits and cryptocurrency further underscores the importance of tracing not merely the initial transfer but the entire financial chain.
The legal position remains clear: a threat of immediate arrest through an unsolicited telephone or video call, coupled with demands for money transfers under the guise of verification or national security, should raise serious suspicion.
Citizens who encounter such tactics should preserve communications and transaction records and promptly report the matter to the appropriate cybercrime authorities.
The arrests mark a step forward in the investigation; however, the allegations remain subject to proof before the competent court, and the presumption of innocence continues to apply to the accused.
