Cybercrime , Fraud Management & Cybercrime

Hackers Used Fake Skype Courtroom to Con Textile Tycoon

Cybercriminals impersonated government investigators and the chief justice of India's Supreme Court in a fake Skype call to defraud wealthy industrialist and Vardhman Group Chairman S.P. Oswal out of about $835,000 after threatening to arrest him on money laundering charges.

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The criminals, two of whom were arrested by the police on Sep. 30, put the textile baron, now 82 years old, under "digital arrest" for two straight days in late September by pretending to be senior officials with the Central Bureau of Investigation, India's federal criminal investigation agency.

Oswal is the chairman and managing director of Vardhman Group, India's largest textile manufacturer with an annual turnover of more than $1 billion. The group employs more than 30,000 people across 18 manufacturing facilities and exports cotton yarn and finished fabrics to 75 countries worldwide. According to the Hurun India Rich List, Oswal's personal net worth was about $550 million in 2022.

Oswal told police after the incident that a few men identifying themselves as senior CBI officials contacted him on his personal phone on Sep. 28 and over the next 24 hours, digitally "interrogated" him and claimed they had incriminating documents that proved his attempts to launder large amounts of money and that the proof was enough to imprison him indefinitely, Oswal told NDTV.

The callers said the documents showed Oswal coordinated with former Jet Airways Chairman Naresh Goyal to launder the money using a Canara Bank account. They also asserted that the Enforcement Directorate, which investigates money laundering offenses and violations of foreign exchange laws, would soon arrest him. The Enforcement Directorate arrested Goyal in September 2023 for allegedly laundering about $65 million given by Canara Bank to Jet Airways as a loan.

The scammers exhorted a virtual ban on Oswal's movements, monitoring him through video calls on Skype and prohibiting him from contacting any third person until the completion of his interrogation. They forced him to share details of his personal finances and investments, including the amount of money deposited in various bank accounts.

On Sep. 28, the scammers told Oswal that considering his age, they had succeeded in obtaining an expedited hearing from the Supreme Court of India, and they set up another virtual call on Skype at 11 a.m. Sep. 29 with another individual who identified himself as Justice D.Y. Chandrachud, chief justice of India.

During the fake hearing, the scammers told the chief justice, who did not turn on his camera, that they had Oswal in digital custody over credible charges of money laundering. After hearing details of the charges, the judge directed the officials to make Oswal deposit money as surety bond, and if he refused, to arrest him and confiscate his properties.

After the court hearing, scammers instructed Oswal to deposit large sums of money in a bank account. Over the course of the day, Oswal transferred about $832,000 through multiple transactions but stopped when he realized that the callers had shared a private bank account instead of a government one. The officials then threatened him with immediate arrest if he did not transfer the remaining amount. Suspecting fraud, Oswal refused to comply and filed a complaint with the police in the city of Ludhiana, Punjab.

On the same day, Ludhiana city police officials said they arrested two individuals in the eastern state of Assam for defrauding Oswal out of $832,000 and had successfully recovered about $625,000 from their accounts, three mobile phones and six ATM cards. "As per the Indian Cyber Crime Coordination Center, this is considered to be the largest recovery in India to date," police said.

Police told the media that the group of scammers includes seven others who have all been identified. The group has targeted high net worth individuals and previously defrauded some other people in Bengaluru, Hyderabad and Mumbai out of about $475,000. "All these transactions, the remaining Rs 4 crore from other cities, were made in August and September. Police are tracing the people who transferred this money," Inspector Jatinder Singh told The Times of India.

Cybercriminals in India have posed as government officials, tax agencies, police officers and banks with great success to defraud citizens, many of them elderly, out of millions over the past few years. In late August, criminals posing as police, customs and narcotics department officials placed a 79-year-old retired army officer under digital arrest for five days and made him transfer close to $250,000 to avoid arrest.

In Hyderabad, cybercriminals also posed as investment advisors to defraud a 75-year-old retired government official out of $1.5 million by promising hefty returns on investments. According to the Home Ministry's Cyber Crime Coordination Center, Indians lost more than $200 million to cyber-enabled financial crime in the first four months of 2024.

The government says cybercriminals use fake identities to obtain mobile SIM cards and use them for short durations to commit fraud and avoid identification. In late September, Uttarakhand state cyber police apprehended an individual who obtained over 20,000 SIM cards using fraudulently acquired personal information and sold them to scammers based in Cambodia, Thailand and Myanmar who perpetrate cross-border fraud.

To help fight fraud, the government has introduced a revamped telecommunications law with an identity-based governance regime for wireless communications. The law requires telecom services providers to conduct biometric authentication for every SIM card registration so that mobile users will be able to see the name or identity of someone calling or texting them (see: India Targets Worsening SIM Fraud With New Telecom Law).

Law enforcement agencies typically can only trace and return about one-tenth of stolen funds to victims. The Cybercrime Coordination Center is presently making efforts to sign up over 800 banking institutions to its consolidated Fraud Reporting and Management System, which helps police coordinate with banks to trace and block fraudulent transactions.