ED Arrested Two CAs in Rs.640 Crore Cyber Fraud; No Response from ICAI Yet

The Enforcement Directorate (ED) has detained two chartered accountants (CAs) and a cryptocurrency trader in connection with a Rs.640 crore money laundering conspiracy involving a cyber fraud investigation.

ED searched 13 addresses in Delhi, Gurugram, Jodhpur, Jhunjhunu, Hyderabad, Pune, and Kolkata between November 28 and 30. These activities resulted in the recovery of Rs 47 lakh in unexplained cash and cryptocurrencies totalling Rs 1.3 crore.

The ED investigation revealed a network of certain Chartered Accountants (CAs), Company Secretaries (CS), and Crypto Traders who are working together in a systematic manner to launder the proceeds of crime acquired.

The probe arises from two FIRs filed by the Delhi Police’s Economic Offences Wing (EOW), which outline a significant cyber fraud encompassing frauds such as online betting, gambling, bogus part-time job offers, and phishing schemes that target naive persons.

The laundered funds were routed through over 5,000 “mule” bank accounts in India, with transactions meant to conceal their origins, before being transferred to a UAE-based payment network. A considerable chunk of the unlawful funds were then withdrawn in Dubai via debit and credit cards supplied by Indian banks.

As part of the operation, two Chartered Accountants, Ajay Yadav and Vipin Yadav, as well as bitcoin trader Jitendra Kaswan, were arrested.

In addition to the arrests, a fourth person, the brother of a fugitive CA, was apprehended for preventing and attacking ED officials during a raid on a farmhouse in Bijwasan, southwest Delhi, on November 28.

Investigations discovered a massive money laundering scheme managed by international operators who interacted via platforms of encrypted messaging.

These handlers gave directions for setting mule accounts, circulating illicit payments, and purchasing cryptocurrency. Authorities have seized over 2,000 documents, including debit and credit card transaction data and cryptocurrency purchase records, which are currently being analyzed.

Radhe Shyam Sharma, the brother of the suspected mastermind, CA Ashok Kumar Sharma, was detained for obstructing and physically assaulting ED officers during the operation. The farmhouse investigation also yielded vital evidence, such as incriminating documents, checkbooks, ATM cards, PAN cards, digital signatures, and trust phrases needed to operate covert cryptocurrency wallets.

The ED’s investigation has found a well-coordinated criminal network that uses finance and technology to commit cyber fraud and launder illicit funds. Authorities are still analyzing the recovered data to properly expose the scope of the scam and ensure those responsible face justice.

The Institute of Chartered Accountants of India (ICAI) has yet to officially respond to the arrests and involvement of Chartered Accountants in the complex cybercrime.