Four private bank officials remanded over alleged $ 1 b import payments fraud

• Suspects include branch manager, sales promotions manager and two executive officers
• FCID probes nearly $ 1 b allegedly transferred overseas since 2023 under guise of imports

Four officials attached to four private commercial banks — including a branch manager, a sales promotions manager, and two executive officers — were yesterday remanded until 20 August in connection with an investigation into the alleged illegal transfer of nearly $ 1 billion overseas using fraudulent import documentation.

The four were arrested by the Financial Crimes Investigation Division (FCID) of the Criminal Investigation Department (CID) at their respective banks and produced before the Colombo Additional Magistrate.

The arrests form part of a wider investigation into nearly $ 1 billion allegedly transferred overseas from 2023 to date by submitting documentation claiming that goods were being imported into Sri Lanka, although investigators allege the corresponding imports did not take place.

Investigators have alleged that the arrested branch manager was linked to transfers of about $ 5.5 million, while the sales promotions manager at another private bank had facilitated 25 telegraphic transfers (TTs) totalling $ 647,207.

One executive officer is alleged to have facilitated 1,067 electronic fund transfers totalling $ 24.6 million, while the other allegedly facilitated 943 transfers amounting to about $ 32 million.

Police allege the officials acted in violation of Central Bank of Sri Lanka (CBSL) rules and regulations and that Customs reports and other supporting documents used for the transactions were forged. Investigators also allege that some of the officials provided training to others on preparing fraudulent documentation.

The FCID has further alleged that the officials received financial benefits for facilitating the transactions. Investigators reportedly uncovered evidence of payments of Rs. 30,000, Rs. 50,000, and Rs. 100,000 per week at different times, while one official allegedly received about Rs. 1 million on a single occasion.

Evidence previously presented before the Colombo Chief Magistrate’s Court alleged that 89 Sri Lankan-registered companies had remitted more than Rs. 190 billion in foreign currency overseas purportedly for imports, without corresponding goods being brought into the country.

Investigations into 36 of those companies reportedly found that several individuals had posed as company owners and established companies and bank accounts for the transactions. About Rs. 75 billion in foreign currency had allegedly been transferred overseas through 10,151 transactions involving the 36 companies.

The investigation, which initially centred on overseas TTs through an institution identified as ‘Next Gen,’ has also extended to possible money laundering linked to drug trafficking.

Investigators allege that proceeds from 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 had previously informed Court that about Rs. 6 million in foreign currency was subsequently remitted overseas through A.Y. Investment.

The principal suspect in the wider investigation, Jiffry Mohamed, who was arrested by the FCID on 19 June, also remains in remand custody until 20 August. He was previously produced before the Colombo Chief Magistrate.

The FCID is continuing investigations into the foreign currency transfers, the role of financial sector officials, and possible money laundering and drug-trafficking links.