Inside the Mule Account Racket: How a Mumbai Crime Branch Operation Exposed a Cross-Border Banking Fraud Network

An undercover investigation has pulled back the curtain on an organised scheme that turned the bank accounts of vulnerable citizens into anonymous conduits for cyber fraud spanning Thailand, China, Dubai, Cambodia and Malaysia — and raised fresh questions about KYC discipline across India's banking system.

Background

In a significant undercover operation, the Mumbai Crime Branch has dismantled an international racket engaged in renting and selling bank accounts to cyber fraudsters and scam syndicates operating across multiple countries, including Thailand, China, Dubai, Cambodia and Malaysia. The case adds to a growing body of evidence that "mule accounts" — legitimate bank accounts hijacked for illicit use — have become a structural weak point in India's financial system.

How the Racket Operated

• Recruitment of vulnerable individuals. The gang targeted economically vulnerable residents of Mumbai's slum communities, offering incentives of up to ₹10,000 to open bank accounts in their own names using their personal KYC documents.
• Linking accounts to controlled SIM cards. These accounts were then linked to SIM cards controlled by the gang, allowing them to intercept OTPs and execute anonymous, hard-to-trace fraudulent transactions.
• A dedicated operations base. The syndicate ran its account and SIM-management operations from an office near Kandivli East, Mumbai — a base of operations sophisticated enough to support complex fraud schemes, including "digital arrest" scams and fake online gaming frauds.

Law Enforcement Action

Acting on the investigation, police seized approximately 50 bank passbooks, ATM cards, card-swiping machines, multiple SIM cards and laptops from the gang's operational premises. Several suspects have been arrested, and investigators are now working to identify the masterminds behind the network — as well as examining whether bank staff were complicit in enabling the scheme.

The Broader Pattern: A National Problem

This Mumbai case is not an isolated incident. It fits a pattern that investigative agencies have been documenting at national scale over the past year.

• The Central Bureau of Investigation (CBI) has separately uncovered a mule-account infrastructure of a much larger magnitude — reportedly involving roughly 850,000 mule bank accounts spread across more than 700 bank branches nationwide, used to launder the proceeds of cyber fraud.
• In July 2025, coordinated enforcement action across multiple states led to further arrests and the seizure of extensive documentary evidence, deepening investigators' understanding of how these networks are structured and financed.
• In a related Mumbai case, three individuals were arrested in connection with a ₹3.81 crore cyber fraud that used a similar mule-account scheme layered with cryptocurrency transactions to obscure the money trail.

The Cost to Victims

Beyond the criminal network itself, these cases expose a painful gap in victim recourse. In Bengaluru, courts have heard banks argue that mule accounts held zero balance by the time fraud was reported — effectively blocking cyberfraud victims from recovering their stolen funds. It is a stark illustration of how the system's design allows losses to fall on victims even after the fraud has been detected and prosecuted.

Key Takeaways

Sources

• Mumbai Crime Branch investigation reports (public disclosures)
• Central Bureau of Investigation (CBI) — nationwide mule-account crackdown coverage
• The Times of India
• The Economic Times
• Moneylife
• India Today
• The Indian Express