Cybercrooks used 65k mule accounts from Karnataka in 2024: Data

Bengaluru: Cybercriminals used more than 65,000 mule bank accounts from Karnataka to build a conduit for transferring ill-gotten money in 2024, according to data from the Indian Cybercrime Coordination Centre (I4C), which functions under the Ministry of Home Affairs.

These accounts form only the first layer of fraudster accounts, and the actual numbers may be far higher. The first layer refers to the first accounts to which victims transferred money at the behest of cyberfraudsters. Further, fraudsters use more mule accounts to build a conduit and finally withdraw money from their desired account.

Mule accounts act as the bridge between the victim’s account and the scammer’s account through which money is withdrawn. Cybercrooks access mule accounts in several ways, including creating, renting, buying, etc.

Karnataka stood fifth — behind Maharashtra, Rajasthan, Haryana and Uttar Pradesh — in the number of first-layer mule accounts.

Karnataka is the only southern state where more than 50,000 first-layer mule accounts were created in 2024, while the average in the four other states stood at 25,000.

Investigators believe negligence by banks is the major reason for the existence of such a substantial number of mule accounts.

A senior cybercrime investigator explained there were two types of mule accounts: accounts created using faulty or fake KYC documents, and genuine bank accounts of gullible citizens bought by fraudsters.

"While cybercrimes have different layers, one of them is footworkers who arrange mule accounts. The footworkers create KYC documents either by impersonation or using fabricated details and use them to create mule bank accounts," the officer said.

Footworkers also approach gullible people, pay them or strike a deal of paying a certain percentage on every transaction, and access their bank accounts.

Interestingly, the whole layer of footworkers is formed for creating mule bank accounts, which emphasises the crucial role mule accounts play in cybercrimes.

There have also been cases where fraudsters rented accounts from small-time businesses and borrowed accounts from traders with cash-intensive accounts.

An Assistant Commissioner of Police-rank investigator explained that those who provide their accounts to cybercriminals, with or without knowledge, are held responsible because it amounts to aiding cybercrimes.

He added that renting and selling bank accounts has become a business now, extending services on Darknet and Telegram channels.

Investigators cite gross negligence from banks while doing KYC verification during account opening, leading to rampant creation of mule accounts. This could be a result of competition among banks, the officer opined.

Such flaws continue to exist despite strict RBI policies that mandate stringent KYC verification during account opening and monitoring of suspicious transactions.

"Banks have the responsibility of monitoring suspicious accounts and transactions, but they are often compromised. There is no proper existing system for monitoring such things in many banks, despite technological advancements," the officer noted.

He also pointed at potential leak of customer data from bank representatives who not only give out contact details of people but also give details of gullible individuals holding bank accounts with no activity. Those accounts become the target for footworkers, who approach the owners of those accounts and buy them.