Chennai Police have arrested seven people for allegedly helping cybercriminals divert Rs 22.3 crore from a Tamil Nadu government bank account through 46 fraudulent online transactions. The money was meant for improving healthcare infrastructure in rural areas under the 15th Finance Commission Health Grant Scheme. The Central Crime Branch (CCB) of Greater Chennai Police is investigating how the government funds were transferred into multiple bank accounts and subsequently withdrawn or moved elsewhere.

Source: The 420 (Nov 15)

The arrests follow the earlier report of the fraud itself, when Rs 22.10 crore was allegedly siphoned from Rural Development Department accounts and Chennai's Cyber Crime Wing said it suspected an international syndicate and was tracing mule accounts. No arrests had been reported at that stage. Read the earlier report: Rs 22.10 crore in Tamil Nadu Rural Development funds allegedly siphoned in cyber fraud

Police identified the accused as Sellapandian (56) of Ekkatuthangal, Annadurai (56) of Triplicane, Lokanathan (65) of Bengaluru, Abdul Rahman (28) and Jagadeesh (31) of Madurai, and Ashraf Ali and Kannadasan of Sivaganga. According to investigators, all seven were employed by private companies and allegedly allowed fraudsters to use their bank accounts in exchange for commissions. Police said the suspects withdrew portions of the money in cash and transferred other amounts to different bank accounts. During the investigation, officers seized seven mobile phones, 14 SIM cards, a bank cheque book and a passbook from the accused. Sellapandian, Annadurai and Lokanathan were arrested first and remanded in judicial custody; the remaining four were arrested subsequently.

How the money was moved

The stolen funds were allocated to the Tamil Nadu government's Rural Development and Panchayat Raj Department and were maintained in a Single Nodal Account at the HDFC Bank branch at CIT Nagar, Chennai, operated only online through user IDs and passwords issued to authorised Block Development Officers, The S Bharat reported. Between October 12 and October 30, unidentified cybercriminals allegedly misused the login credentials of officials from Keelaiyur in Nagapattinam district, Mandapam in Ramanathapuram district and Dharapuram in Tiruppur district, and carried out 46 unauthorised transactions transferring Rs 22.3 crore into 25 different bank accounts. Following a complaint, the cybercrime wing registered a case on November 3, and a team led by Inspector Velmurugan traced those who received the money, withdrew it in cash and moved it onward.

Police are examining the financial transactions to identify the individuals who organised the suspected fraud and recruited the seven account holders, and efforts are under way to recover the diverted money and establish the wider network behind the transactions. The investigation remains ongoing, with police seeking to identify those responsible for the original unauthorised access.