Four managers of four private commercial banks arrested over an alleged USD 1 billion transfer by a Colombo Fort-based money changer without the import of any goods have been remanded until August 20 by the Colombo Magistrate’s Court.

The suspects were arrested by the Financial Crimes Investigation Division (FCID) of the Criminal Investigation Department while they were at their respective private 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 managers allegedly received weekly payments

Investigators have reportedly uncovered evidence that the main individual allegedly involved in the racket had made weekly payments to the four bank officials.

According to the investigation, the officials had allegedly received payments of Rs. 30,000, Rs. 50,000 and Rs. 100,000 per week at different times.

One of the four managers had also allegedly received approximately Rs. 1 million on a single occasion, investigators have found.
 

Rs. 190 billion allegedly remitted overseas

The arrests come amid a wider investigation into an alleged foreign exchange and money laundering racket.

According to evidence previously presented before the Colombo Chief Magistrate’s Court, 89 companies registered in Sri Lanka had allegedly remitted more than Rs. 190 billion in US dollars overseas, purportedly for the importation of goods.

However, investigations had reportedly revealed that no corresponding goods had been imported into Sri Lanka.

The investigation initially began over the transfer of billions of rupees in US dollars abroad through a telegraphic transfer (TT) system operated through an institution known as “Next Gen.”

Investigators subsequently focused on 89 registered companies allegedly involved in the scheme. Further inquiries into 36 of those companies reportedly found that several individuals had allegedly posed as company owners and opened companies and bank accounts for the transactions.

Approximately Rs. 75 billion in US dollars had allegedly been transferred overseas through 10,151 transactions involving those 36 companies, according to evidence presented in court.

Drug money allegedly laundered through the racket

Investigators have also uncovered allegations that money generated through drug trafficking was laundered through the same mechanism.

During the questioning of four suspects arrested in connection with drug trafficking in the Negombo area, investigators reportedly uncovered information concerning alleged drug trafficker “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 had informed court that approximately Rs. 6 million in US dollars had subsequently been remitted overseas through A.Y. Investment.

The owner of the company, Jeffrey Mohamed, had previously 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 current investigation is being conducted by the FCID of the CID, with authorities examining the alleged foreign currency transfers, the role 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.