ED Uncovers 322 Passbooks in Delhi Classroom Scam, Exposes ‘Mule Account’ Network

In a major breakthrough, the Enforcement Directorate (ED) has recovered 322 bank passbooks allegedly linked to ‘mule accounts’ as part of its ongoing investigation into a money laundering case connected to a Delhi-based educational institution. The recovery was made during raids in the national capital, intensifying concerns around financial fraud and misuse of identity, particularly in lower-income communities.

The case is raising serious questions about how easily financial systems are being manipulated — and the risks it poses to common citizens across India, including in Tier 2 cities.

What Are Mule Accounts?

Mule accounts are bank accounts opened in the names of unsuspecting or financially vulnerable individuals, often used to route illegal money. The account holders, sometimes unaware of the full implications, are offered a small payment or incentive to provide their credentials or ATM cards.

In this case, the ED suspects that these accounts were used to layer and move large sums of money, making tracking extremely difficult. Many of the passbooks found are believed to be linked to daily wage workers or individuals with limited banking awareness.

How the Scam Unfolded

The investigation is tied to an alleged scam involving the misuse of funds under the pretext of educational activities. While the institution appeared legitimate on the surface, ED sources believe it was used as a front for laundering large volumes of cash using mule accounts.

Raids revealed a structured operation involving agents who allegedly opened multiple accounts using forged documents or by convincing individuals to give up control of their bank accounts.

Why This Matters to Tier 2 and Rural India

While the case is based in Delhi, such mule account networks often expand to smaller towns and rural areas where financial literacy is low. Cities like Meerut, Gaya, Nagpur, and Jabalpur are increasingly being targeted by similar fraudulent activities.

Agents usually approach the unemployed, pensioners, or those in need of quick money — making Tier 2 and Tier 3 cities more vulnerable to this kind of exploitation.

The Role of Digital Payments and Banking Gaps

India’s push toward digital banking and financial inclusion has been commendable, but it also opens up new avenues for misuse. Many account holders may not fully understand the risks involved in sharing their bank details or OTPs, especially when dealing with aggressive agents promising jobs, loans, or financial aid.

This case highlights the urgent need for better awareness campaigns and stronger identity verification checks by banks.

Conclusion

The recovery of 322 passbooks in Delhi is not just a one-off enforcement win — it is a wake-up call. As financial fraud evolves, so must India’s safeguards. For citizens in both metros and Tier 2 cities, staying informed and cautious is no longer optional. The government, banks, and educational institutions must work together to close the gaps that fraudsters continue to exploit.