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The arrest of a Dubai-based businessman who had come to Bengaluru to buy a flat with the proceeds of a Rs 22 crore ‘FedEx scam’ perpetrated on a 75-year-old coffee planter from Kodagu led to the recovery of Rs 17 crore of the stolen money by the Cybercrime Unit of the Karnataka Criminal Investigation Department (CID).

This is one of the biggest breakthroughs in FedEx fraud cases, in which unsuspecting victims are targeted and held as “digital hostages” by fake police officers and other law enforcement agencies, claiming that courier packages sent in their name contain drugs or terrorism-related materials.

The breakthrough in the case in which the 70-year-old coffee planter was defrauded of Rs 22 million in May came after the Cybercrime Unit of the Criminal Investigation Department, which was handling the case, began tracking 26 money laundering accounts into which the fraudsters had diverted the illicit funds.

The Criminal Investigation Department has now arrested five people who were involved in managing the bank accounts into which the stolen funds were originally transferred. They are also investigating the role of over half a dozen other people who were involved in money laundering, including through the purchase of an apartment and a luxury car.

The main accused in the case is Yusuf Seth, a former Bengaluru resident now living in Dubai. He was arrested by the CID this month upon his arrival from Dubai for allegedly cashing money stolen from the coffee-growing region in May.

The accused “committed online fraud and looted millions of dollars from their victims through digital arrests by making video calls in the uniform of customs officers and police officers. They used the said amount to buy expensive and luxurious foreign cars and also apartments,” the CID told a local court last week during a bail hearing for a suspect.

In the Kodagu case, the coffee farmer received a call on the morning of May 11 this year from a caller claiming to be a FedEx courier company employee who said that the police had seized 200 grams of the drug MDMA in a parcel sent in the name of the coffee farmer. The victim was connected by the caller to a person claiming to be a police officer.

The fake detective claimed that a case had been opened in connection with the seizure of the MDMA drug and that the 75-year-old man should prove his innocence by transferring money from his bank account for verification.

The victim first transferred an amount of Rs 1,204,000 through RTGS to a Canara Bank account on May 18 and again transferred an amount of Rs 1,010,000 to a State Bank of India account on May 21. Although the callers transferred Rs 2.21 million, the victim continued to receive calls asking him to liquidate his stock holdings, which raised his suspicions.

The victim approached the Kodagu CEN (Cybercrime, Economic Offences, Narcotics) police and filed a complaint on May 28. Due to the high value of the case, the case was transferred to the Cybercrime Division of the CID.

“During the course of the investigation, it was found that the fraudulent money was transferred to around 26 bank accounts,” the CID said in an official statement on the investigation last week.

Based on information from the money trail of the stolen funds, the CID arrested four persons – Mohammad Shakib, Mohammad Ayan, Ahsan Ansari and Soloman Raja, all residents of Bengaluru, who are suspected of setting up some of the fake accounts into which the fraudulent funds were transferred.

Through investigations into the people behind the scam's money laundering mule accounts, the CID found that the person behind the scheme was a person named Yusuf Seth, who lived in Dubai. CID nabbed Seth this month when he allegedly arrived to cash in the stolen money and buy an apartment and a luxury car.

During the arrests, Rs 1,700,000 in cash and US$ 7,700 in notes and counterfeit money were seized from the accused, the Criminal Investigation Department said in a statement.

The CID is investigating other suspects from Bengaluru. One of the suspects, Abdul Rehman Khan, is said to have used the stolen money to buy a Mercedes Benz worth Rs 40 lakh on behalf of Seth. Two others, Saibanuddin and Navid Jan, are also said to have helped the gang.

During a hearing on the interim bail of Rehman Khan before a local court, the CID said that he had bought a Mercedes Benz for Rs 40 lakh related to the swindled funds he received through the hawala route. The court rejected the interim bail plea on August 17.

The gang involved in the FedEx scam on the coffee plantation in Kodagu is said to be linked to up to 15 other similar cases across India, according to police.

Although the number of FedEx fraud cases – which were widespread in Karnataka in 2023 – has dropped sharply this year, they still exist and older, unsuspecting victims are falling prey to them, a Bengaluru police officer said.

Previous cases

In one of the first cases of arrests related to this rampant scam, Bengaluru police arrested eight people in December 2023 for defrauding a pensioner of Rs 1.08 crore (108 million).

Police investigation revealed that nearly Rs 9.34 lakh of the stolen Rs 1.08 crore was transferred to an RBL bank account and withdrawn from Davangere in Central Karnataka. Police examined the bank's CCTV footage to ascertain the identity of the suspects who physically withdrew some of the money.

Based on information from Davangere, Bengaluru North Cen police arrested eight persons and seized Rs 13.17 lakh cash. Around Rs 19 lakh in various accounts of the accused were also frozen. The gang was found to be using 11 mobile phones and as many as 148 bank accounts for their activities.

“The arrests were possible because the accounts into which part of the crime money was transferred were in Karnataka and this facilitated the investigation against the persons who had withdrawn the money in cash,” said a senior Bengaluru police officer.

Police investigations have revealed that the people arrested in Bengaluru and Davangere were recruited through an online Telegram group to open bank accounts where they could transfer the funds stolen from the victims of the courier scam.

Their task also included withdrawing the stolen funds from the accounts under their control and converting them into cryptocurrency for payments in Dubai.

The bank account holders received commissions on the amounts of stolen money they helped launder, police said.