Digital Arrest Scam: Fake Terror-Funding Case Costs Karnataka Farmer Over Rs 1.31 Crore

Digital arrest scams involve fraudsters impersonating government officials and tricking victims either by way of manipulation, threat or coercion to divulge critical finance details and rob them of their money. In a recent incident in Karnataka, a 62-year-old farmer from Dakshina Kannada allegedly lost over Rs 1.31 crore after callers posing as Mumbai Police and Anti-Terrorism Squad (ATS) officers accused him of links to the Pahalgam terror attack.

The farmer was allegedly kept under digital arrest for nearly six weeks through video calls and threats. He approached the police after his daughter cautioned him about such scams.

According to a report in the Indian Express, the alleged fraud began on August 27, 2026, when a caller claimed that a money laundering investigation linked to the Pahalgam attack had led to the farmer. The callers allegedly threatened him with arrest, sent documents presented as court orders and instructed him to keep the matter secret.

How The Fraudsters Took The Money

The callers allegedly directed the farmer to liquidate the fixed deposits held by him and his mother and transfer the money for a purported verification process. He was also told to give the bank a different reason for the transactions if questioned.

According to the report, he transferred Rs 35 lakh through RTGS from a Canara Bank branch to an account in Hyderabad. He was also allegedly made to pledge gold at an Axis Bank branch in Puttur to obtain a loan of Rs 22.50 lakh. The callers then pressured him to mortgage his commercial building, threatening that it would otherwise be seized. He obtained a Rs 74 lakh loan from Karnataka Bank and transferred the proceeds.

The fraud came to light on October 8, when the farmer’s daughter, who lives in Bengaluru, cautioned him about digital arrest scams after reading about another victim. He then told her what had happened and approached the police.

What The Police Said

Police have registered a case involving alleged cheating, extortion, impersonation, identity theft, wrongful restraint and criminal intimidation.

According to the report, the initial transfers went to accounts linked to four entities in Kolkata, Mysuru district, Hyderabad and Maharashtra. Police suspect these accounts were used to route the money and have sought accountholder details from the banks.

The case shows that these fraudsters use fake legal documents, threats of digital arrest and claims of national security to pressure victims into transferring money. Police are now trying to trace the funds routed through multiple bank accounts.