India’s mule account problem has a new worst-case study, and it runs from a village in Telangana all the way to crypto wallets tied to scam compounds in Cambodia.
According to a report by The Times of India, the Khammam district police have uncovered a ₹547 crore cyber fraud operation in which mule bank accounts opened in the names of unemployed youth and daily-wage laborers were systematically used to funnel money from Indian victims into cryptocurrency wallets linked to Cambodia and Myanmar. Officials now suspect the actual value of the fraud could exceed ₹1,000 crore once all connected accounts are analyzed.
The case blew open after a complaint filed on December 24 by a 30-year-old unemployed man from Tumburu village in the Sathupally mandal. The complainant told V M Banjar police that he was forced to open two bank accounts in his own name, which were then taken over by the gang and used to receive and move the proceeds of cyber fraud.
On the basis of that single FIR, police registered a case against five accused, Udatneni Vikas Choudhary, Potru Praveen, Potru Kalyan, Morampudi Chenna Keshavulu and J Shiva Krishna. What began as a localized complaint quickly turned into one of Telangana’s biggest cybercrime busts.
How the ₹547 crore was moved
Khammam Police Commissioner Sunil Dutt laid out the mechanics of the racket at a media briefing at V M Banjar police station. According to the investigation, the gang operated systematically between 2021 and 2025, targeting unemployed youths and daily-wage laborers in and around Sathupalli under the pretext of jobs, business opportunities, and easy money.
Once the victim was convinced to open a bank account in his own name, the gang collected the internet banking credentials, cheque books, and debit cards. The accounts were then handed to cyber fraudsters on a commission basis. From there, the funds moved through three clear channels:
- Layered transfers across a web of linked mule accounts to break the trail.
- Conversion into cryptocurrency, primarily for cross-border settlement.
- Cash withdrawals from ATMs to break the digital trail entirely.
A financial analysis of accounts connected to the main accused and their associates showed transactions totalling ₹547 crore. Officials estimate that the gang pocketed over ₹60 crore as commission for laundering the proceeds. The Enforcement Directorate has already been looped in on the money laundering angle.
The network did not stop at mule accounts. Investigators found that the Sathupalli group had tied up with international fraudsters to set up call centres in Cambodia and Hyderabad, the same call centres that targeted victims through matrimonial offers, reward points, gaming and betting schemes, stock market investment pitches and crypto trading scams. It is the full menu of every major cyber fraud category currently draining Indian bank accounts, run out of a single coordinated pipeline.
Arrests, absconders, and prime accused
Police had first arrested key accused Potru Praveen back in December 2024. On January 11, 2026, the Khammam Police Commissionerate arrested 18 others in a single coordinated operation and sent them to remand. After repeatedly failing to secure anticipatory bail, prime accused Udatneni Vikas Choudhary was finally detained by VM Banjar police two months after the case was registered, taking the total number of arrests to 20.
Six more accused remain at large. Police have registered offences under the Bharatiya Nyaya Sanhita and the Information Technology Act, 2000, and are actively tracing the absconders along with additional beneficiaries of the network.
The fraudulent transactions have already been linked to multiple cybercrime cases registered across several states, which means the Khammam accounts were almost certainly servicing scams hitting victims well outside Telangana.
Cambodia, mule accounts, and the India playbook
The Khammam case is not a one-off. It is the largest in a pattern that has been hardening across India over the last year, Indian mule accounts feeding stolen rupees into crypto rails, and those rails terminating in wallets tied to Southeast Asian scam compounds.
In March, India reported ₹2.68 crore in combined crypto fraud losses across Telangana and Andhra Pradesh, with one of the accused having travelled to Cambodia to join an organized cybercrime syndicate, returning with over 400 illegal SIM cards to build fake matrimonial profiles and pull Indian victims into crypto investments.
Earlier, in an Ahmedabad case investigated in partnership with Binance’s Financial Intelligence Unit, police traced stolen money from mule bank accounts in India to crypto wallets linked to syndicates operating out of Cambodia and Nepal.
The geography is consistent because the infrastructure is consistent. US authorities in October 2025 seized nearly $15 billion in Bitcoin and indicted Prince Holding Group chairman Chen Zhu, alleging that forced labor at cyber scam centres in Cambodia had been used to run “pig butchering” investment fraud on a global scale. Cambodia’s parliament has since passed a law specifically targeting online and crypto scam compounds, an indirect acknowledgement of how deep the problem has become.
Khammam fits neatly into this global map. The only Indian-specific twist is the recruitment layer, jobless men in Sathupalli villages being turned into account holders, their KYC turned into laundering infrastructure.
The national picture
India logged over 24 lakh cybercrime complaints on the National Cyber Crime Reporting Portal in 2025, with reported fraud losses totaling ₹22,495 crore. Of the ₹36,448 crore in cumulative losses reported since the portal’s inception, only ₹60.52 crore has actually been returned to victims. In other words, recovery remains below 0.2%.
The response is starting to catch up, though the gap is still wide. The government’s “PRAHAAR” counter-terrorism strategy, released in February 2026, specifically flagged the growing use of crypto wallets by criminal and terrorist networks. A dedicated darknet and cryptocurrency task force has been set up under the Multi-Agency Centre.
From April 1, 2026, new powers under the Income Tax Bill allow authorities to access crypto wallets, emails and social media during authorized searches. The CBI has separately arrested individuals in ₹1.86 crore “Digital Arrest” and ₹350 crore crypto Ponzi cases, with investigators tracing mule accounts, SIM fraud rings and crypto-linked fund movement.
What the Khammam case does is collapse every concern into one FIR. It is mule account abuse, it is KYC exploitation, it is cross-border crypto laundering, and it is transnational scam compound infrastructure, all connected by a single Sathupalli syndicate that built its pipeline over four years before one Tumburu complainant finally forced it into the open.
With six accused still absconding and the total fraud value potentially running past ₹1,000 crore, the ₹547 crore figure is almost certainly the floor, not the ceiling.
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