In a sweeping operation across seven states, the central bureau of investigation (CBI) has intensified its crackdown on cyber-enabled financial fraud under Operation Chakra-V, arresting three main accused for their role in facilitating mule bank accounts that helped cybercrime syndicates launder illicit funds.
On 16 July 2025, CBI conducted coordinated searches at multiple locations in Delhi, Bihar, Madhya Pradesh, Kerala, Punjab, Andhra Pradesh and Rajasthan. The action follows earlier raids in June this year and is aimed at dismantling the financial infrastructure that enables large-scale digital fraud, including scams such as digital arrests, impersonation, fraudulent investments, and online extortion.
During the raids, CBI teams seized a trove of incriminating evidence, including mobile phones, bank documents, know-your-customer (KYC) records, and transaction details, which authorities believe will provide crucial leads into the deep-rooted mule account ecosystem.
The three individuals arrested during this round of searches are allegedly involved in actively operating and managing mule bank accounts used to route proceeds of cyber frauds. These accounts, often opened using forged or incomplete KYC documentation, are key enablers for cybercriminals to collect, layer, and withdraw stolen money with minimal traceability.
The operation is a continuation of efforts to dismantle the critical infrastructure that enables scams such as digital arrest frauds, impersonation, fraudulent investment schemes and online extortion. According to the CBI, the arrested individuals were actively involved in the creation and operation of mule bank accounts, which were used to channel and conceal the proceeds of cybercrime. These accounts, often opened with incomplete or fraudulent documentation, play a central role in helping cybercriminals launder illicit funds while avoiding detection.
The action follows the registration of a case on 25 June 2025, against 37 accused persons under various Sections of the Indian Penal Code (IPC) and Bharatiya Nyaya Sanhita (BNS) and the Prevention of Corruption Act. The accused include mule account holders, middlemen, agents and certain bank employees who allegedly colluded with cybercriminals to open and operate bank accounts in violation of banking norms and KYC regulations.
Earlier, on 26th June and 27 June 2025, CBI had conducted searches at 40 locations across several states and arrested ten individuals involved in similar offences.
The scale of the fraud under investigation is massive. Preliminary findings by the agency uncovered more than 850,000 mule bank accounts opened across over 700 bank branches nationwide. These accounts have been instrumental in laundering money derived from various cybercrimes, including phishing scams, UPI frauds, digital arrest rackets and fraudulent online investment platforms.
The investigation has revealed systemic failures in risk assessment, due diligence and anti-money laundering (AML) compliance across multiple banking institutions. Several branches reportedly failed to verify customer addresses, ignored suspicious transaction alerts, and did not follow RBI’s master circulars or internal audit guidelines. The arrested individuals, including agents and bank facilitators, are said to have helped cybercriminals bypass standard verification processes, allowing them to move stolen funds swiftly and discreetly.
The CBI’s ongoing probe has adopted a structured three-pronged strategy to dismantle the ecosystem supporting cyber fraud. This includes targeting the financial infrastructure, such as mule accounts, digital wallets and illegal payment gateways; communication infrastructure, like fraudulently activated SIM cards and telecom agents aiding scam operations; and human resources, where organised criminal networks recruit vulnerable individuals, often across international borders, to carry out digital fraud or maintain fraudulent bank accounts. The agency has likened this exploitative recruitment process to a form of ‘cyber slavery’.
Mule accounts are particularly dangerous because they allow cybercriminals to create layers of transactions, making the trail of stolen money hard to follow. These accounts are often opened in the name of unwitting individuals or those lured with financial incentives, and then used briefly before being abandoned or closed. In several digital arrest scams, victims have been coerced into transferring funds into such accounts under threat of arrest or legal action by impersonators posing as police or government officers.
The evidence seized during the latest raids is expected to offer further insight into how these networks operate and expand. The arrested individuals will be presented before the jurisdictional court, and officials have confirmed that more arrests are likely as the investigation progresses. The CBI is also coordinating with banks, regulators and law enforcement agencies across the country to identify more operatives and tighten institutional safeguards.
This latest operation underlines the Union government’s resolve to tackle cybercrime at its roots by targeting the enablers and infrastructure rather than only the front-end actors. With the uncovering of such an extensive mule account network, the focus is now expected to shift to greater regulatory scrutiny of banking intermediaries and enforcement of robust KYC and AML procedures.
