Four Bank Managers Remanded Over Alleged USD 1 Billion Money Transfer Scheme

Four managers of private commercial banks have been remanded until August 20 over an alleged USD 1 billion foreign currency transfer carried out through a Colombo Fort-based money changer without the import of any corresponding goods.

The four suspects were arrested by the Financial Crimes Investigation Division (FCID) of the Criminal Investigation Department (CID) while they were at their respective banks. Police said the arrests are believed to be the first of their kind in Sri Lanka in connection with an investigation of this nature.

Bank Officials Allegedly Received Weekly Payments

Investigators have reportedly uncovered evidence that the main suspect allegedly involved in the scheme made regular payments to the four bank officials.

According to the investigation, the officials allegedly received weekly payments ranging from Rs. 30,000 to Rs. 100,000 at different times. One of the managers had also allegedly received approximately Rs. 1 million on a single occasion.

Rs. 190 Billion Allegedly Remitted Overseas

The arrests form part of a wider investigation into an alleged foreign exchange and money laundering operation.

Evidence previously presented before the Colombo Chief Magistrate’s Court indicated that 89 companies registered in Sri Lanka had allegedly remitted more than Rs. 190 billion in US dollars overseas, purportedly to pay for imported goods. However, investigators reportedly found that the corresponding goods had not been imported into the country.

The investigation began with inquiries into billions of rupees transferred overseas through a telegraphic transfer (TT) system operated through an institution known as “Next Gen.”

Investigators subsequently identified 89 companies allegedly linked to the scheme. Further investigations into 36 of those companies reportedly found that several individuals had allegedly posed as company owners and established companies and bank accounts to facilitate the transactions.

Court proceedings have heard that approximately Rs. 75 billion in US dollars was allegedly transferred overseas through 10,151 transactions involving the 36 companies.

Alleged Links to Drug-Money Laundering

Investigators have also uncovered allegations that proceeds from drug trafficking were laundered through the same mechanism.

During the questioning of four suspects arrested in connection with drug trafficking in the Negombo area, investigators reportedly obtained information regarding an alleged drug trafficker known as “Konda Ranji.”

According to the investigation, funds allegedly generated through drug trafficking were transferred from an account belonging to an individual identified as “Weli Chandana” to an account held by A.Y. Investment.

Senior State Counsel Oswald Perera previously informed court that approximately Rs. 6 million in US dollars was subsequently remitted overseas through A.Y. Investment.

The company’s owner, Jeffrey Mohamed, had earlier been arrested by the FCID in connection with the investigation. Investigators reportedly found Rs. 1 million in his possession at the time of his arrest.

The FCID of the CID is continuing investigations into the alleged foreign currency transfers, the involvement of financial institutions and possible links to money laundering and drug trafficking.

The four bank managers will remain in remand custody until they are produced before court again on August 20.