ED Arrests 2 From Mumbai In ‘Digital Arrest’ Money-Laundering Case; Cyber-Fraud Proceeds Converted Into Foreign Currency Through RBI-Licensed Money Changers

Mumbai, August 24, 2026: The Enforcement Directorate (ED) has arrested two Mumbai-based persons in connection with its money-laundering investigation into an alleged pan-India cyber-fraud and “digital arrest” racket involving reported losses of Rs 417.49 crore across 330 victim complaints and 163 FIRs, the central agency said on Monday. The investigation has uncovered a wider network whose linked entities allegedly carried out banking transactions worth more than Rs 27,850 crore across 20 States and Union Territories.

Two Arrested In Mumbai

Fahim Moin Hussain Sayed and Naim Mueen Sayyed were arrested in Mumbai on Sunday under the Prevention of Money Laundering Act (PMLA) and produced before a special holiday court for transit remand. The court granted the ED transit remand, allowing the agency to take the accused to Panaji, Goa, where the case was registered.

The ED said the network allegedly converted proceeds of cyber fraud, initially received as banking credits, into cash and subsequently into foreign currency through entities operating as RBI-licensed Full Fledged Money Changers (FFMCs).

Investigation Into Digital Arrest Case

The investigation stems from an FIR registered by the Cyber Crime Police Station, North Goa, in June 2025 after a Goa resident was allegedly subjected to a “digital arrest” and coerced into transferring Rs 2.60 crore between May 21 and June 2, 2025, into bank accounts falsely represented to her as “Secret Supervision Accounts”.

Investigation has revealed that the money was subsequently routed through an organised financial network. The proceeds were allegedly moved within hours through dormant and newly opened bank accounts before being fragmented across more than 400 beneficiary accounts, exposing a wider network of interconnected commodity, trading, travel and foreign-exchange entities.

According to the ED, entities linked to the network collectively carried out banking transactions exceeding Rs 27,850 crore and deposited around Rs 2,904 crore in cash. Of this, approximately Rs 584.70 crore was deposited through 61,448 Bulk Note Acceptance Machine (BNAM) transactions at multiple locations.

Cyber-Fraud Proceeds Converted Into Foreign Currency

The agency said the network had a mechanism to convert cyber-fraud proceeds, initially received as banking credits, into cash and subsequently into foreign currency through companies holding RBI licences to operate as Full Fledged Money Changers.

The investigation has linked the accounts of these entities to 330 victim complaints and 163 FIRs registered across 20 States and Union Territories, involving an aggregate reported loss of Rs 417.49 crore. In 101 complaints, the agency found that funds belonging to a single victim were allegedly routed into two or more entities within the same network during the same fraud, indicating the alleged use of multiple entities to layer and move the proceeds.

Companies Allegedly Controlled By Others

The agency has also alleged that several companies used to route the money were incorporated in the names of people from modest financial backgrounds, including employees, drivers and residents of single-room tenements. These individuals were shown as directors, while the actual control over the companies’ bank accounts and affairs allegedly remained with others.

ED Searches Mumbai And Goa Premises

The ED conducted searches under Section 17 of the PMLA at 20 premises in Mumbai and Goa on July 17, 2026, followed by searches at additional premises on August 21. During the searches, the agency seized Rs 3.25 crore in cash, along with digital devices, records and statutory registers, which are being examined.

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The ED conducted searches under Section 17 of the PMLA at 20 premises in Mumbai and Goa on July 17 and carried out further searches on August 21. During the searches, the agency seized Rs 3.25 crore in cash along with digital devices, records and statutory registers. The material is being examined as part of the ongoing investigation.

The ED is now tracing the wider money trail and examining the role of other individuals and entities allegedly involved in moving and converting the proceeds of cyber fraud.

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