Probably as Much as INR 10 Billion! Indian Police Arrest a Small Leader of a Bitcoin Fraud

Recently, Indian police arrested a 29-year-old woman from Khar (an suburb of Mumbai) for helping bitcoin scammers open at least 100 accounts at various banks and create numerous shell companies to defraud Indian investors.

According to sources, two employees of HDFC and Kotak Bank were involved and arrested. The cyber police suspect the fraud could be as high as INR 10 billion (about $120 million).

A professor being defrauded of INR 3.6 million

The scam only began to surface after a complaint was received from a 66-year-old professor at a top engineering college, who went to the Khar police station on March 31, claiming that she had been duped out of INR 3.6 million into investing in bitcoin.

The professor told police that she clicked on a link, investby.com, on social media in June 2021, to learn more about Bitcoin and cryptocurrency investment. After that, she started to receive calls from a UK number. The caller introduced himself as Shiv and explained the investment in detail. Though the processor told him that she had no money to invest, Shiv called her every day to convince her to invest. Unable to withstand such coaxing and pestering, the professor finally invested INR 15,000 in December 2021.

Soon, a woman named Nikita called her and said she was the manager of that investment company. She convinced the professor to invest INR 3.6 million in the three months from December 2021 to March 2022. However, a few days later, Nikita said that the professor had lost all the money in her account due to the Russian-Ukrainian war and that she could get her money back if she invested another $5,000.

The professor was finally aware that she was scammed and called the police. Since the amount was over INR 100 billion, cyber police took over the case.

Police trace the source of money

As they dug deeper into the flow of funds, cyber police found that 1.452 million rupees had been transferred to the Bank of Kigali in Rwanda; 1 million rand was paid through the Nuvei payment gateway in Canada; and 986,000 Indian rupees were transferred to a Mumbai-based company called Luna the Solution.

After several months of investigation, the police discovered a domestic transaction. The account of the company where the transaction took place was handled by a woman, and the police found that the company's registered address was false. And the owner of this company was a slum dweller whose Aadhaar card was used to obtain a Gumasta license from the BMC, a necessary document to open a current account.

The police then focused on the phone number related to the company's bank account and said: "We were sure that the person was somewhere in Mumbai as the account was being operated from the city and around 9 crore transactions have taken place from this particular account".

The phone number brought attention to a 29-year-old woman who lived in upscale Khar Link road, Jyotsana Chaturvedi. After a week of interrogation, the police learned that she had opened at least 100 current accounts in the past year, at least 14 of which were still in use. While the account under complaint had 9 crore transactions, 4-5 crore transactions were found in other accounts.

The police also found that she opened at least 20 shell companies by using fake KYC.

Inside men arrested

They then tracked down Vaishnavjyoti Pitta, 24, from HDFC Bank, and Ashwin Tambe, 28, from Kotak Bank, who allegedly shared important documents with Chaturvedi. Police arrested Pitta and Tambe.

After a detailed investigation, all three were taken into judicial custody.

Since the initial number of the phone number given to the complainant was "+44, giving the impression that it was from London. However, police suspected it was handled in China, as the role of Chinese citizens has been spotted in several bitcoin scams.

The primary defendant in the case, Chaturvedi, was in direct contact with the Chinese masterminds operating the Bitcoin scam and provided them with fake accounts.