Mumbai Court Denies Bail in ₹7.72 Crore ‘Digital Arrest’ Cyber Fraud Case

A Mumbai special court has sent out a strong message in India’s fight against cyber fraud, rejecting the bail plea of a real estate agent accused of helping route ₹7.72 crore in a chilling “digital arrest” scam that targeted an elderly woman.

The court made it clear that allowing personal or company bank accounts to be used for suspicious transactions is not a minor lapse - it is active participation in crime.

How the ‘digital arrest’ scam unfolded

The case began in July 2025, when the senior citizen received a call from a man pretending to be an official from the Telecom Regulatory Authority of India (TRAI). She was falsely told that bank accounts had been opened in her name and linked to a money-laundering case involving Jet Airways founder Naresh Goyal.

Soon after, another caller impersonating a senior police officer placed her under what he described as “digital arrest”, threatening immediate legal action if she did not cooperate. Isolated and under constant psychological pressure, the woman was forced to liquidate her investments and transfer money to accounts supplied by the fraudsters.

By the time contact stopped, her life savings - more than ₹7.72 crore - were gone.

Money trail leads to the accused

During the investigation, cyber police traced ₹65 lakh to the account of Captown Realties Pvt Ltd, owned by accused Kamleshkumar Mali. Further scrutiny revealed that ₹2.72 crore had flowed through Mali’s personal bank account within weeks, and was subsequently withdrawn.

Investigators told the court that the same bank account had surfaced in at least three separate cyber fraud cases, indicating a clear pattern rather than accidental misuse.

Cases like this underline the growing importance of forensic scrutiny and auditing services in India, especially in identifying unusual fund flows, repeat account usage and shell-company linkages that often remain hidden until major losses occur.

Court rejects ‘good faith’ defence

Mali’s defence claimed he had allowed a friend to use his bank account in good faith, without knowing it would be used for fraud. The court was unconvinced.

Special Judge A V Gujarathi noted that Mali never lodged a complaint about alleged misuse of his accounts and failed to explain the scale of funds routed through them. The judge observed that repeated use of the same accounts for cyber fraud clearly pointed to knowledge and intent.

“Permitting one’s bank account to be used for criminal transactions attracts direct criminal liability,” the court said while rejecting bail.

A wider warning on digital arrest scams

The order reflects growing judicial concern over “digital arrest” scams, where criminals impersonate authorities to frighten victims into compliance. These crimes depend heavily on mule accounts, shell firms and individuals willing to look the other way while money moves rapidly.

Legal experts say the ruling reinforces a crucial principle: accountability does not stop with the caller on the phone. Anyone enabling the financial pipeline can be held equally responsible - a reminder that weak financial controls and ignored red flags can have serious legal consequences.