BJP Zila Panchayat Member Arrested in Madhya Pradesh's Rs 21.06 Crore Crypto Fraud
The Madhya Pradesh Police have arrested a Bharatiya Janata Party (BJP) zila panchayat member from Shajapur in connection with what is being called the state's largest cryptocurrency fraud. Jagdish Kumar Malviya is accused of helping launder proceeds of a Rs 21.06 crore scam that duped a 70-year-old chartered accountant from Gwalior.
The arrest came after investigators traced Rs 50 lakh of the defrauded money to Malviya's bank account. According to the cyber police, Malviya allegedly allowed fraud proceeds to be routed through an organisation's bank account in return for a 2 per cent commission. He had access to the account and internet banking credentials as president of the organisation.
The case dates back to December 2025, when the victim, Ashok 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 allowed him to withdraw a small amount initially, a classic tactic in investment fraud. A fake trading portal later showed his investment growing to over Rs 33 crore, convincing him the platform was genuine.
However, every attempt to withdraw money triggered fresh demands for “income tax,” “risk margin,” and other fabricated charges. By the time Vijayvargiya realised the profits existed only on a screen, more than Rs 21 crore had been transferred in 106 separate transactions across 76 different bank accounts.
During the investigation, cyber experts reconstructed the digital money trail and found that nearly Rs 77 lakh reached accounts connected to Malviya in the first layer of transfers. Of this, around Rs 50 lakh has been directly linked to the fraud under investigation. 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 police said Malviya allegedly lived an extravagant lifestyle financed by these suspicious transactions. He reportedly travelled to Bangkok in July with associates while investigators were piecing together the fraud trail. He was produced before a court and remanded to police custody. During interrogation, he allegedly disclosed 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 scale of the laundering operation has stunned investigators. The Rs 21.06 crore did not remain in a few fraudulent accounts but was broken into hundreds of transfers and pushed through a highly sophisticated banking network. The money moved through 15 layers of transactions, and 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, eventually travelling through banking networks in Karnataka, Tamil Nadu, Andhra Pradesh, and Kerala.
This arrest marks the first major breakthrough in the case. The police have not yet disclosed whether Malviya's political affiliation played any role in the fraud. The investigation is ongoing, and authorities are working to identify other individuals involved in the money-laundering network.
Cyber fraud cases involving cryptocurrency have been rising across India, and this case highlights the sophisticated methods used by fraudsters to exploit digital platforms. The police have urged the public to exercise caution when approached with unsolicited investment offers, especially those promising high returns with minimal risk.
