FREEZE & FLEECE SCAM: PART I

Freeze, you are being demonetised by police, banks

Kozhikode: On April 6, Askar Abdul Khalid's wife went on a Ramzan shopping spree in her hometown of Kodungallur in Thrissur district. She gave her husband's debit card at the billing counter to swipe. But it would not work.

She walked to the nearby ATM but she could not withdraw cash. Her embarrassment turned into panic and she called her husband in Dubai, where he works with a construction company.

Khalid immediately contacted Federal Bank's Kodungallur branch, where he maintains the Non-Resident Ordinary (NRO) account, used by non-resident Indians to manage their income earned in India.

"I was told the account was frozen because of an unauthorised transaction but the manager would share no further details," Khalid said.

He wrote to the bank's registered office in Aluva and the regional office in Ahmedabad but got no reply.

Khalid was scared because his Non Resident External (NRE) account, where he keeps his earnings from Dubai, was linked to his NRO account. "What if the bank freezes my NRE account, too?" he said.

On April 9, Anandu K and Syamjith K of Nilambur, whose accounts were frozen without convincing answers from banks, started a WhatsApp group '#Bank Account Freeze Victims #Kerala'. In a day, nearly 200 people joined the group and started narrating their stories.

The banks in Kerala were freezing their accounts on directions from police forces from other states investigating online frauds mostly registered on the National Cyber Crime Reporting Portal (NCCRP) run by the Ministry of Home Affairs. But the victims who have come out in Kerala had nothing to do with the frauds nor are they named in the FIRs. Police are directing banks to freeze accounts that have transacted with accounts linked to online financial frauds. "Often, the links are tenuous and distant or involved in buying a product and paying using UPI," said Jiyas Jamal, an advocate specialising in cybercrime laws and practising in the High Court of Kerala.

In the past two years, at least 300 victims have contacted him and he has taken up the briefs of 40 victims.

Onmanorama spoke to several victims -- from a 76-year-old woman in Chirayinkeezhu in Thiruvananthapuram to cryptocurrency traders and travel agents, and small-time business owners. They are victims not just of indiscriminate police action but also of the apathy of the banks. "The bank officials treat us like terrorists when we ask for details on why our accounts were frozen," says Syamjith, who runs an online recharge service.

Debit transactions in accounts in Kerala have been frozen on the directions of police in Punjab, Delhi, Karnataka, Telangana, Rajasthan, Himachal Pradesh, and Gujarat.

At least four persons wriggled out of the freeze by paying bribes to cops.

This is the first of a three-part series on the rampant and arbitrary freezing of bank accounts in Kerala. Read Part 2 here: Account Freeze: Crypto dealer turns detective to clear his name in scam, Kerala police ignore evidence

'I spent Rs 2.5 lakh for a disputed amount of Rs 5,000'

In the third week of January 2022, Rahul Ravi (name changed on request) received a note from sub-inspector of Cyber Police Station in Rohini District of Delhi. The note threatened to arrest Rahul if he did not appear before him on February 7, 2022.

Rahul (23), who was then in his final year of a BTech course in Mumbai, dabbled in cryptocurrency trading. Before he received the note, his business account with Federal Bank's Puthuppally branch in Kottayam was frozen. It had Rs 5 lakh.

He contacted his father in Dubai and flew down to Delhi and hired a lawyer. On the advice of the lawyer, he applied for anticipatory bail before meeting the officer.

When he met sub-inspector at the Cyber Police Station, Rahul was told that the Rs 5,000 he received from one of his clients was linked to cybercrime.

He told the officer that he sold cryptocurrency on Binance, the largest cryptocurrency exchange, and the 'Know Your Customer' (KYC) details of the client were available with the platform and the police could access them.

"But the police were not interested in going after the suspect. Instead, the officer demanded that I pay up Rs 6 lakh and get the freeze on the account lifted," Rahul told Onmanorama.

He was held up in the police station from 4 pm to 9.30 pm on that day. "It was scary. They kept threatening me. My lawyer was not allowed inside," he said.

The police had the information that Rahul had Rs 5 lakh in the account and that his father worked in Dubai. But his lawyer said he would get it done through the court.

The police officers reportedly laughed and said he would lose more money and time if he took the legal recourse.

The Metropolitan Magistrate court in Rohini rescheduled the case four times, giving ample time to the police to file their reply. During this time the Investigating Officer changed. "The new officer called on my WhatsApp and asked for money to settle the case," he said.

The police made him come to Delhi four times to give statements. "They were excuses to negotiate," he said.

During these months, officers of Delhi police allegedly threatened to wreck his future, deny clearance to his passport and entangle him in other online fraud cases. "I want to erase the torturous seven months from my memory," he said.

On September 3, 2022, when the case came up before Magistrate Mansi Malik, the investigating officer said he had no objection to unfreezing Rahul's account and the case was disposed of.

"In all, I spent Rs 2.5 lakh for a dispute over Rs 5,000," he said. The Rs 2.5 lakh included the airfare and the legal fees.

Three months later, in December, Mangaluru Cyber Crime Police froze his bank accounts with Federal Bank and IndusInd Bank. "I had sold cryptocurrency worth Rs 27,000 to a person who the police said was involved in some online fraud," he said.

This time, Rahul was smarter. He does not keep money in his business accounts. "I lost trust in banks," he said.

He reached the police station with his father. "The officer was a Malayali. He asked for Rs 1 lakh to lift the freeze on the accounts," he said.

Rahul settled for Rs 40,000. "I had no option. I lost my money and time taking the court route first," he said.

'Withhold disputed amount, don't freeze account'

Advocate Ameen Hassan, who is representing around 20 victims, said the police and the bank have a provision to withhold the disputed amount, called a lien. "But by freezing bank accounts, they are misusing the provision put in place to help the real victims of online frauds," he said.

Cyber crime lawyer Jamal said he contacted the national nodal officer of the National Cyber Crime Reporting Portal. "The officer told me that no instruction has been given to cyber police to freeze accounts of third parties. They can withhold the lien money," Jamal said.

But the ground reality is quite different.

'Took a home loan from KSFE, got account frozen'

Hassan was baffled when Kerala Gramin Bank froze the account of a daily-wager Moideen Pookkottur soon after Kerala State Financial Enterprises (KSFE) credited Rs 3.5 lakh to his account. The money was the second tranche of the Rs 7 lakh home loan he took from the Kerala government-run chit fund company.

Kerala Gramin Bank said the account was frozen on the direction of the UP police. The bank shared the phone number of the investigating officer with Moideen. No one attends the calls made to the number.

Hassan said Moideen was from his village Mongam in Malappuram. "I took his bank statement and there was only one transaction in three years. Moideen had deposited Rs 8,000 in cash in the account. Other than that, the account had been lying idle till KSFE deposited Rs 3.5 lakh as the first instalment of the home loan," the lawyer said.

Moideen used up the money and requested the second tranche of Rs 3.5 lakh. From the second instalment, Moideen withdrew Rs 2.31 lakh and the remaining Rs 1.19 lakh was in the account when Gramin Bank froze the account.

The only link connecting Moideen to the present freeze spree is that KSFE transferred the money from its Federal Bank account, said Hassan.

Dead money in Subaida's account

Subaida Beevi (76) of Chirayinkeezhu in Thiruvananthapuram district has several health issues, including clotting of blood in the head. But she cannot access the Rs 2.36 lakh in her account with the Federal Bank because it was frozen on June 7, 2021, nearly two years and a half ago.

The account had Rs 1.36 lakh. After her only son Shanavas Samsuddin (48) died in Saudi Arabia on October 26, 2020, his friends sent Rs 1 lakh to Subaida's account on January 21, 2021. "We came to know her account was frozen when we tried to withdraw money for her treatment in KIMS," said Shanavas's widow Shani Shanavas.

Subaida had undergone MRI scanning after the doctor suspected clotting of blood in her brain on June 12, 2021. As usual, she wrote a cheque to withdraw money from her account. "When we went to the bank, the manager said the account was frozen five days ago but refused to share any details," said Shani.

On Wednesday, April 12, 2023, after many people reported freezing of their accounts, Shani went to her bank and blasted the manager for not sharing the details.

Under the table in Jalandhar

Sometime in December, ICICI Bank's Ramanattukara branch flagged Rs 98,000 in the account of Umer Tabsheer, a 25-year-old cryptocurrency trader from Feroke in Kozhikode. He had sold cryptocurrency worth Rs 2.5 lakh to a person in Bengaluru and the bank said Rs 98,000 that came to his account from the buyer was linked to financial fraud.

The bank held back the amount as a lien but allowed him to use the account. Tabsheer opened another account with South Indian Bank's Feroke branch and transferred the remaining money to the new account.

Within a few days, South Indian Bank froze the account but initially refused to share details. "I had to use the influence of a big investor in the bank to get details," he said.

He was told that Rs 30,000 in his account was linked to cybercrime in Jalandhar. He was given the phone number of the investigating officer.

When Tabsheer called the number, the officer said he knew he was a cryptocurrency trader and asked him to come to Jalandhar in Punjab to settle the dispute.

"I sent my lawyer to Jalandhar. The officer there asked the lawyer to deposit Rs 30,000 in the SBI account of one Gurmeet Singh. The condition was that I had to deposit cash in the account by visiting a branch," he said.

Tabsheer deposited the money in the State Bank of India's Feroke branch using a pay-in slip. "But the officer asked for another Rs 10,000 and I transferred the money to my lawyer in Jalandhar," he said.

Wasting no time, the Senior Superintendent of Police of Jalandhar Rural Mukhwinder Singh Bhullr sent a letter to South Indian Bank to lift the freeze on his account.

"In all, I spent around Rs 90,000, including the airfare of my lawyer to lift the freeze on my Rs 30,000," said Tabsheer.

The police could have gone after the fraudulent buyer because his KYC was available with the exchange and his assets were with him in the form of cryptocurrency. "But they find it easier to follow the rupee and harass innocent people," he said.

Around the same time in January, Adhil P V, who runs a travel agency on the Kozhikode-Malappuram border, found his HDFC Bank account frozen. Bank officials said Rs 33,000 credited to his account on January 18 was flagged by Jalandhar police.

Adhil was shocked. The money was proceeds from Kozhikode-Dubai air tickets he sold to a person, who runs a supermarket in Dubai.

Adhil's travel agency had only one bank account and a freeze on it crippled his business.

When he contacted Jalandhar police, the officers asked him to contact Tabsheer's lawyer. After that, he followed the protocol.

This time, Jalandhar police gave the bank account number of one Manjinder Singh, and he sent Rs 33,000 to the account, the amount in dispute.

"If there is a fraud, we can understand. Here I have evidence of selling tickets to my client. But these officers are misusing the law framed to resolve cybercrime to target innocent people," Adhil said.

Case closed but accounts still frozen

When Tabsheer, the cryptocurrency trader, returned to the bank after resolving the Jalandhar issue, the manager said the account faced another notice from Gujarat's Vadodara Cyber Crime Police.

The Vadodara police claimed that Rs 2.5 lakh in the account was linked to cybercrime.

"I did not have any money left with me to pay a bribe. So, I thought I will let it pass," he said.

But Tabsheer transferred some money to two accounts of his friend to help him build a house. "The friend called me to say that his two accounts were frozen by the Gujarat police because I sent him money. Because of me, his Rs 8 lakh was blocked," he said.

So, Tabsheer made the trip to Vadodara on April 11. "There I found the officers were kind and helpful," he said. He was directed to Karelibaug police station, 3km from Vadodara cyber crime station.

Karelibaug police told Tabsheer that the Rs 2.5 lakh in his account was linked to a Rs 1.25 crore online fraud, and they had frozen 55 bank accounts in connection with the investigation.

"But they told me that the case was closed and they were writing to the banks of each account holder to lift the freeze," he said.

Since Tabsheer was there, they fast-tracked his application to unfreeze the account. He said the freeze on his friend's accounts would also be lifted in due time.

Pathiri Seller's Plight

In Kerala, a small-time pathiri (rice flour roti) maker in Alappuzha said his bank froze his account with Rs 4 lakh after a woman in the neighbourhood GPay-ed Rs 300 for the pathiri she bought.

His bank linked the Rs 300 to cybercrime but instead of withholding the money, it mercilessly froze his account.

Mohammed Siddique Fourfa Group, a small-scale company offering services such as ticket booking, online payment, and money transfer, is almost paralysed after ICICI Bank froze his account with Rs 3.47 lakh nearly one year ago.

In many cases, police are acting on the complaint without registering an FIR, said lawyers. In February, Telangana's Rachakonda police, investigating an online fraud, wrote to South Indian Bank in Kerala to freeze all the accounts linked to the same Aadhaar, PAN, email ID, and mobile number of a person who is not directly linked to the alleged cybercrime.

"One thing is clear. Our rights are being infringed upon with impunity," said Anandu, the admin of the WhatsApp group of victims. "The situation will change only if the police officers are held accountable by the courts. They should face consequences of their illegal actions," he said.

(Read Part 2 here: Account Freeze: Crypto dealer turns detective to clear his name in scam, Kerala police ignore evidence

Read Part 3 here: Kerala Gramin Bank freezes school's account over Rajkot complaint after guardian pays fees of Rs 13,200