Bhopal:
A WhatsApp message that began with a simple, “Hello, this is Divya speaking”, has led investigators to what is being described as Madhya Pradesh’s biggest cyber fraud case and now, to the arrest of a BJP zila panchayat member accused of helping launder the proceeds of the Rs 21.06 crore cryptocurrency scam.
In a breakthrough, the Madhya Pradesh cyber police arrested Jagdish Kumar Malviya, a BJP leader and district panchayat member from Shajapur, after investigators traced Rs 50 lakh of the defrauded money to his bank account. The police alleged he knowingly allowed cyber fraud proceeds to be routed through an organisation’s bank account in return for a 2 per cent commission, making him a crucial link in a sophisticated nationwide money-laundering network.
The arrest marks the first major breakthrough in the sensational case in which a chartered accountant, Ashok Vijayvargiya, 70, from Gwalior allegedly lost over Rs 21 crore after being lured into a fake USDT cryptocurrency trading by fraudsters posing as investment advisers.
According to investigators, the fraud began in December 2025, when Vijayvargiya received a WhatsApp message from a woman identifying herself as “Divya”. She promised extraordinary returns through cryptocurrency investments and gradually won his confidence. To build trust, the fraudsters allegedly allowed him to withdraw a small amount initially, which was one of the oldest tricks in investment fraud. A fake trading portal later showed his investment growing to over Rs 33 crore, convincing him the platform was genuine.
But every attempt to withdraw the money triggered fresh demands for “income tax”, “risk margin” and other fabricated charges. By the time he realised the profits existed only on a screen, more than Rs 21 crore had already been transferred in 106 separate transactions across 76 different bank accounts.
During the investigation, cyber experts reconstructed the digital money trail and discovered that nearly Rs 77 lakh reached accounts connected to Jagdish Malviya in the first layer of transfers, of which around Rs 50 lakh has been directly linked to the fraud under investigation.
The police said Malviya was able to facilitate the transactions because he had access to the bank account and internet banking credentials of an organisation where he served as president. During questioning, he allegedly admitted to permitting fraud proceeds to pass through the account in exchange for a 2 per cent commission. Investigators have also detected suspicious transactions exceeding Rs 2.5 crore in his accounts, suggesting they may have been repeatedly used for routing money generated through cyber frauds.
The investigation revealed that Malviya allegedly lived an extravagant lifestyle financed by suspicious financial transactions. The police said he recently travelled to Bangkok with some associates in July while investigators were piecing together the big cryptocurrency fraud trail. The accused was produced before a court and remanded to police custody. During interrogation, he reportedly disclosed important information about an interstate network involved in operating “mule accounts” bank accounts used to receive and rapidly transfer illegal funds before authorities can freeze them.
The sheer scale of the laundering operation has stunned investigators. According to the state cyber police, the Rs 21.06 crore did not remain in a few fraudulent accounts. Instead, it was broken into hundreds of transfers and pushed through a highly sophisticated banking network. The investigation has so far found the victim transferred money to 76 first-layer bank accounts.
The money then moved through 15 layers of transactions. More than 20,000 bank accounts and digital transactions have been identified. Nearly 35 per cent of the money was routed through accounts in southern India before spreading across multiple states. Funds eventually travelled through banking networks in Karnataka, Tamil Nadu, Andhra Pradesh, Kerala, Gujarat, Rajasthan, Uttar Pradesh, Haryana, Jharkhand, West Bengal, Chhattisgarh and Madhya Pradesh.
The police have so far managed to freeze approximately Rs 2 crore, while the remaining money had already been withdrawn, converted into cryptocurrency, or dispersed through digital payment channels.
Investigators believe the money was deliberately fragmented into thousands of small and large transfers to ensure it never remained in one account long enough to be frozen.
Sources said arresting the accused was not easy. According to investigators, as soon as Malviya was detained, some influential individuals allegedly contacted officials seeking information and reportedly attempted to intervene.
However, once they were informed that the case involved what is believed to be Madhya Pradesh’s largest cyber fraud investigation, they withdrew.
Police officer Sanjeev Nayan Sharma said the investigation is now focused on identifying the masterminds operating behind the fake cryptocurrency platform, tracing IP addresses, analysing WhatsApp communications including a number carrying a US country code and uncovering the interstate syndicate controlling the mule accounts.
Investigators suspect many account holders may merely be commission-based money mules, while the real operators remain hidden behind layers of digital transactions.
