ED files third supplementary charge sheet against ‘Challenger King’ in Rs 157-cr cyber fraud, crypto laundering case

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Key takeaways

The Enforcement Directorate filed a third supplementary charge sheet against Mehmood Abdul Samad Bhagad.
The syndicate allegedly laundered over Rs 157 crore using shell entities, mule accounts, and USDT cryptocurrency.
Authorities have previously seized Rs 15 crore in cash and frozen Rs 34 crore in bank accounts during the investigation.

The Enforcement Directorate (ED), Mumbai Zonal Office, has filed a third supplementary charge sheet against Mehmood Abdul Samad Bhagad, alias Challenger King, before the Special Court (PMLA), Mumbai, under the Prevention of Money Laundering Act (PMLA), 2002, the agency said in a statement.

The chargesheet, filed on October 1, 2026, alleges his key role in an organised syndicate that misused stolen identities to open mule bank accounts for routing proceeds from cyber fraud and illegal online gaming and betting activities.

Investigation and money laundering methods

The ED probe was initiated by an FIR registered at Malegaon Chhawani Police Station in Nashik and later re-registered by the Anti-Terrorism Squad (ATS), Maharashtra. The case centres on the deposit of more than Rs 100 crore into newly opened accounts with the Nashik Merchant Co-operative Bank (NAMCO Bank) in Malegaon.

Investigators found that, on Bhagad’s instructions, other accused persons set up shell entities and opened multiple bank accounts that together received over Rs 157 crore. These funds were layered through successive sets of shell-entity accounts controlled by Bhagad. Hundreds of crores were subsequently withdrawn by co-accused and moved through hawala channels to other locations.

The ED has detailed the modus operandi of money laundering through trading in USDT (Tether), a cryptocurrency. Bhagad and his associates allegedly sold the cryptocurrency to individuals involved in cyber fraud and illegal online gaming and betting. In return, those persons deposited Indian rupees into mule accounts under Bhagad’s control.

Seizures and arrests made by the agency

Earlier searches conducted by the ED at premises in Surat, Malegaon, Ahmedabad and Mumbai led to the recovery of incriminating documents, seizure of approximately Rs 15 crore in cash and freezing of Rs 34 crore lying in multiple bank accounts. A provisional attachment order was also issued for movable and immovable properties valued at Rs 95 lakh.

So far, the agency has arrested six persons in the case. It has filed one prosecution complaint and two supplementary complaints; the Special Court (PMLA) has taken cognisance of all of them.

The ED stated that it remains steadfast in its mission to trace and dismantle illicit financial networks and ensure strict enforcement of the PMLA, 2002. Further investigation in the matter is in progress.

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