Operation Octopus Exposes ₹1.27 Billion Investment and “Digital Arrest” Scam Syndicate Built on Mule Accounts, Shell Entities, and Layered Banking Channels

India’s cybercrime enforcement agencies have dismantled a Rs 127-crore fraud network in one of the country’s largest coordinated crackdowns on financial cybercrime. Under “Operation Octopus,” the Cybercrime wing led a 10-day multi-state operation that resulted in 104 arrests tied to online investment scams, trading fraud platforms, and so-called “digital arrest” extortion schemes. Investigators linked the network to more than 1,000 cybercrime complaints nationwide, identifying 151 bank accounts allegedly used to receive, layer, and disperse illicit funds.

Laundering Infrastructure and Syndicate Structure

Authorities determined that the syndicate relied heavily on mule account holders and account suppliers to sustain its laundering pipeline. Of those arrested, 86 individuals allegedly allowed their bank accounts to be used for fraudulent transfers, while 17 others actively sourced and routed accounts for commission. These accounts functioned as temporary conduits, enabling rapid fund dispersion before victims could initiate recovery procedures.

The fraud typologies under investigation include fake online investment portals, manipulated trading dashboards, and digital impersonation tactics designed to coerce victims into transferring funds under fabricated legal threats. Seized materials — including 152 bank passbooks, 234 debit and credit cards, 141 SIM cards, 26 laptops, and company seals — indicate the structured creation of shell entities to legitimize account openings and mask beneficial ownership. This model mirrors patterns identified in previous multi-layered trading scam investigations.

Coordinated Enforcement Action

During synchronized raids across 16 states, 32 specialized teams confiscated ₹3.6 million in cash and large volumes of digital evidence. Law enforcement officials confirmed that forensic analysis is underway to trace transaction chains, identify upstream organizers, and determine whether cross-border fund flows were involved.

Authorities emphasized that enforcement efforts are increasingly targeting not only scheme operators but also facilitators within the laundering chain. The scale of Operation Octopus underscores intensified regulatory and investigative focus on dismantling the financial infrastructure sustaining organized cyber fraud across India.