US$1 billion import scam probe widens as four private bank officials are remanded over alleged foreign transfers tied to phantom imports.
Sri Lanka’s alleged US$1 billion import scam has entered a new phase after four officials from four private commercial banks were arrested and remanded over suspected foreign currency transfers linked to imports that investigators say never arrived.
The Financial Crimes Investigation Division of the Criminal Investigation Department arrested the four suspects while they were at their respective banks. The Colombo Magistrate’s Court later ordered that they remain in remand custody until August 20.
Local media identified the suspects as Dharmalingam Prasad of Union Bank, Shiran Mario of Seylan Bank, Amila Udara of Nations Trust Bank and Umesh Randika Fernando of Sampath Bank. These are allegations before court, and none of the four has been found guilty.
US$1 Billion Import Scam Probe Turns to Bank Officials
Investigators allege that the officials assisted transactions connected to the wider scheme and had personally met the main suspect, Jeffrey Mohamed.
According to submissions reported from court, such meetings allegedly took place almost every Friday. Investigators claim the officials received regular payments ranging from Rs. 30,000 to Rs. 100,000 per week. One official allegedly received around Rs. 1 million on a single occasion.
The defence has challenged those allegations.
Lawyers representing the suspects argued that the officials were junior-level banking employees whose duties mainly involved obtaining information from customers. They maintained that responsibility for confirming imports and broader corporate compliance rested with more senior officials.
The court nevertheless rejected their bail applications and remanded the four until August 20 while investigations continue.
Phantom Imports and Hundreds of Millions Sent Abroad
The broader investigation began around foreign currency transfers allegedly made under the guise of paying for imported goods.
Earlier court proceedings revealed allegations that 89 Sri Lankan companies had remitted more than Rs. 190 billion overseas in US dollars despite investigators finding no corresponding imports. Authorities later examined 36 of those companies more closely.
Investigators told court that approximately Rs. 75 billion had been transferred through 10,151 transactions involving those 36 companies alone.
The inquiry reportedly began with transfers made through an entity known as “Next Gen,” before expanding to a wider network of companies and accounts.
This is where some figures circulating publicly require caution. Claims involving 105 shell companies, 227 accounts and 26,108 telegraphic transfers were not confirmed in the most recent court reporting reviewed by The Morning Telegraph. Verified court reports currently cite 89 companies overall, with detailed investigations into 36 of them.
Jeffrey Mohamed and Alleged Drug-Money Links
Jeffrey Mohamed, identified by investigators as a central suspect in the scheme, had earlier been arrested by the FCID.
Court reporting states that the foreign currency transfers were allegedly routed through A.Y. Investment, a Colombo Fort-based entity linked to Mohamed. Investigators alleged that multiple bank accounts were opened in his name and through associated businesses to facilitate the transactions.
The inquiry has also expanded into possible money-laundering links involving drug trafficking.
Investigators told court that funds allegedly generated by drug traffickers were transferred into an account linked to A.Y. Investment. About Rs. 6 million in US dollars was then allegedly remitted overseas through that company.
Another report on the latest proceedings said investigators believe approximately Rs. 6.5 million connected to the wider transfers may have reached drug traffickers.
However, claims linking specific major retail companies, including House of Fashion Mall, or allegations involving US$42.7 million sent to 256 companies in 26 countries were not substantiated by the court reports reviewed for this rewrite and should not be presented as established fact without stronger documentary evidence.
Banking Controls Now Under Scrutiny
The US$1 billion import scam investigation is increasingly focusing on how such large transactions could move through the formal banking system without matching goods appearing through customs records.
That raises wider questions about bank compliance, trade-finance controls and the verification of import-related telegraphic transfers.
For now, however, the allegations remain under investigation.
The four bank officials are in remand custody until August 20, while the FCID continues examining the movement of funds, the role of financial institutions and possible links to money laundering and drug trafficking.
The scale of the case makes it potentially one of Sri Lanka’s most significant financial-crime investigations in recent years. But the legal process is still unfolding, and all suspects remain entitled to the presumption of innocence until a court determines otherwise.
