Four officials from leading private banks have been arrested and remanded in connection with an investigation into an alleged scheme to illegally transfer approximately US$1 billion overseas under the pretence of importing goods into Sri Lanka.
The Financial Crimes Investigation Division of the Criminal Investigation Department arrested four bank officials at their workplaces and produced them before the Colombo Magistrate's Court, where they were remanded until August 20. Police described the arrests as believed to be the first of their kind in an investigation of this nature.
Investigators allege that Jeffrey Mohamed, previously arrested in connection with the scheme, established around 36 companies claiming to import goods and opened accounts at four private banks. According to the CID, large sums of foreign currency were transferred overseas as supposed payment for imports, but the corresponding goods never entered Sri Lanka. Investigators told the court that the four arrested officials allegedly met with Mohamed on an almost weekly basis and assisted with banking transactions, receiving payments ranging from Rs. 30,000 to Rs. 100,000 per week, with one official allegedly receiving Rs. 1 million on a single occasion.
The CID also alleged that the officials failed to conduct required verification checks when opening corporate accounts, which they are obligated to perform. However, defence lawyers argued that some of the arrested individuals were junior-level employees whose responsibilities were limited to obtaining customer information and handling routine banking procedures. The defence contended that determining compliance with import requirements was the responsibility of senior officials and that junior staff could not be held responsible for an operation involving billions of rupees.
The court rejected bail applications following consideration of submissions from both sides. The broader investigation has identified 89 Sri Lankan-registered companies that transferred more than Rs. 190 billion overseas, with approximately Rs. 75 billion linked to 36 of these companies transferred through 10,151 transactions without corresponding imports. Investigators are also examining possible connections between the financial operation and drug trafficking.
