Jammu Tawi, Feb 15: Security agencies have busted an ever-growing ecosystem of “mule accounts” in Jammu and Kashmir that serves as the financial backbone of global scam networks, with officials fearing that the funds routed through these accounts could be used for separatist and anti-national activities.
The officials said more than 8,000 mule accounts operating in the region have been identified and frozen over a period of three years, exposing a sophisticated network of money laundering.
They described these accounts as the “weakest yet most crucial link” in the cybercrime chain, as without them, the conversion of stolen money into untraceable cryptocurrency would be impossible.
Central security agencies have asked the Jammu and Kashmir Police and other law enforcement agencies to hold consultations with banks to curb the mushrooming of ‘mule accounts’ and identify middlemen, commonly referred to as “mulers”, who facilitate such financial frauds, they said.
Officials suspect that after the National Investigation Agency’s 2017 crackdown on the flow of illicit money into Jammu and Kashmir, anti-national elements may have shifted to a newer model of “digital hawala”, wherein commissions earned by mule account holders or mulers may be used for activities against the country.
A muler is typically not the person who contacts victims or sends fake links. Instead, their role is covert but critical — arranging and maintaining a steady supply of mule accounts that scammers use to receive and transfer stolen money without revealing their own identities.
These mule accounts often belong to ordinary people lured with promises of “easy commission” and assured minimal risk. They are persuaded to hand over full control of their bank accounts, including net banking credentials, under the pretext that the accounts will be used briefly as “parking accounts”.
A single scammer is often supplied with 10 to 30 mule accounts at a time, and in many cases, bank accounts are opened in the name of fictitious companies, enabling large transactions of up to Rs 40 lakh in a single day without immediately raising alarms.
Officials said the money trail is deliberately messy, with the scammed money rapidly shifted through several accounts and broken into smaller transactions to avoid detection.
Central security agencies and other law enforcement organisations have emphasised that while mule account holders may not design the scams or speak to the victims, they are active facilitators of money laundering. By sharing credentials and accepting commissions, they knowingly provide the “financial infrastructure” for transnational crime.
“The entire scam ecosystem depends on these accounts. Without a destination for the money, the scam fails at the first step. Those renting out their accounts are not just victims of circumstance; they are the engines of the crime,” a senior official said.
A detailed study done by the central security agencies has identified people in countries like China, Malaysia, Myanmar, and Cambodia directing people in the union territory to create private crypto wallets, which are often set up using a Virtual Private Network (VPN) to avoid detection and require no Know Your Customer (KYC) or identity verification.
The Jammu and Kashmir Police has already suspended the use of VPNs in the valley as it is a handy tool for the terrorists as well as separatists to avoid detection.
