Treasury Heist report alleges US$2.5 million in public funds was diverted despite warnings from JPMorgan and the Federal Reserve.
The Treasury Heist involving US$2.5 million in public funds was allegedly carried out despite advance warnings from JPMorgan and the Federal Reserve, according to a special report issued by the Free Lawyers organization.
Amid growing institutional disputes between the Treasury and the Central Bank of Sri Lanka, the report claims that approximately US$2.5 million, or nearly Rs. 100 crore, belonging to the government was fraudulently diverted to foreign accounts.
The organization states that although more than eight months have passed since the serious financial crime allegedly took place, the legislature has still failed to present any official report to Parliament regarding the matter.
According to the report, Sri Lanka’s foreign and domestic debt management operations, previously handled by the Central Bank of Sri Lanka, were recently transferred to the newly established Public Debt Management Office under the Treasury as a condition of the IMF loan programme.
The Free Lawyers organization claims that conflicts between the two institutions during this transition, along with the failure to follow proper control mechanisms, allowed fraudsters to divert a large sum of public money to foreign accounts.
The report stresses that this was not merely a technical error, but the result of serious weaknesses in the governance system. It further states that the tragedy also led to the loss of one officer’s life.
According to secret reports cited by the organization, JPMorgan and the Federal Reserve banks in the United States had issued clear messages warning about the suspicious nature of the foreign transactions.
However, the report alleges that the authorities ignored those warnings and proceeded with the payments.
The Free Lawyers organization argues that both the Central Bank of Sri Lanka and the Treasury are directly responsible for the fraud.
It claims that the Central Bank, using the independence granted under the new act as a shield, has argued that it no longer carries responsibility for debt management.
More seriously, the report alleges that under the cover of anti-money laundering laws and confidentiality policies, the Central Bank concealed highly important warnings and information from the Treasury.
At the same time, Treasury officers are accused of acting hastily to take over debt operations before proper regulations were completed and without adequate technical knowledge of debt management.
The Parliamentary Committee on Public Finance had reportedly given the relevant institutions four weeks, and later more than two weeks on two further occasions, to submit information regarding the alleged fraud.
The organization claims this created significant room for information to be altered or concealed.
Although the Free Lawyers organization first revealed the alleged financial fraud to the public on April 22, 2026, and informed the Speaker and the Parliamentary Committee on Public Finance in writing, it says no official response has been received so far.
The report further states that the relevant confidential report was sent by the Secretary to the Ministry of Finance to the residence of Committee Chairman Harsha de Silva.
Even after he reportedly informed that the document should be officially referred to Parliament, more than ten days have passed without it being tabled.
Accordingly, the organization says the legislature has failed to exercise the ultimate power of controlling public funds vested in Parliament under Article 148 of the Constitution.
The report also claims that the operations of the Ministry of Finance and the Treasury have now completely collapsed.
It notes that the National Audit Office has issued a qualified opinion on the Annual Report submitted by the Chief Accountant due to numerous deficiencies.
For that reason, the report proposes that a professional officer with experience in the Sri Lanka Administrative Service or wider public service should be immediately appointed as Secretary to the Ministry of Finance in place of the current Secretary.
The Free Lawyers organization strongly emphasizes that no authority has the right to evade responsibility through excuses while public tax money and national wealth are allegedly misused in this manner.
