Over $830,000 swindled as scammers set up fake court to defraud Indian textile tycoon

In an extremely unusual incident in India, a group of fraudsters set up a fake court and swindled millions from a prominent businessman.

Indian police are investigating a scam that defrauded S.P. Oswal, chairman of the Indian textile giant Vardhman Group, out of $830,000 by summoning him to a fake Supreme Court online hearing.

While digital and online frauds are becoming increasingly common in India, a police official from the northern state of Punjab told Reuters on Monday that deceiving someone by staging a Supreme Court hearing was unheard of.

Details of the case surfaced after police announced on Sunday that two individuals were arrested based on a complaint by Oswal, the 82-year-old chairman of Vardhman Group.

Oswal revealed that the fraudsters, posing as federal investigators, accused him of involvement in a money laundering case. They also arranged an online court hearing where one of the criminals impersonated India’s Chief Justice D.Y. Chandrachud. Oswal was then instructed to deposit his funds into a designated account under the guise of an investigation.

"They made a Skype call regarding the court hearing... as per a Supreme Court order, I was directed to release all my funds into a secret supervision account," Oswal told police authorities, according to a case document reviewed by Reuters on Monday.

On Monday, police reported that they had recovered $600,000 from the suspects, marking one of the largest recoveries in such cases in India.

Oswal’s case documents revealed that he was threatened with a "digital arrest," a rising trend in India where scammers, using video calls, blackmail individuals into paying for fictitious legal violations. Fraudsters have even posed as law enforcement officers in studios designed to resemble police stations or government offices.

In May, India's government issued a public warning about the growing number of “digital arrest” scams. Cybercriminals, sometimes wearing police uniforms, were found impersonating officers during fake interrogations, prompting the government to block more than 1,000 Skype IDs involved in such activities.

Oswal, one of the most high-profile victims of this scam, leads a five-decade-old textile company with a turnover of $1.1 billion and operations in more than 75 countries.