June 22, Colombo (LNW): Authorities have arrested a businessman believed to be the central figure behind an extensive illicit foreign exchange operation that allegedly channelled more than Rs. 21 billion out of Sri Lanka through fraudulent import transactions.
The arrest was carried out by investigators attached to the Financial Investigation Division following a months-long inquiry into a sophisticated money transfer network suspected of operating beyond the country’s regulated banking and trade systems.
According to investigators, the scheme is believed to have been functioning since 2023 and involved the misuse of import documentation to justify large-scale overseas payments. The operation allegedly revolved around a Colombo-based company, A.Y. Investments, which is accused of facilitating foreign currency transfers on behalf of numerous traders and commercial entities.
The suspect, identified as Jeffry Mohamed, is alleged to have played a leading role in coordinating the transactions and managing the network. Detectives claim the arrangement allowed businesses to move funds abroad while avoiding established financial oversight mechanisms, potentially depriving the state of substantial tax and customs revenue.
The investigation gathered pace after concerns regarding suspicious foreign exchange movements were raised at the parliamentary level. Subsequent inquiries by financial crime investigators uncovered a web of transactions stretching across multiple sectors and involving a range of individuals suspected of benefiting from the system.
Police sources revealed that a breakthrough came during the questioning of a suspect linked to organised narcotics trafficking. Information obtained during that inquiry reportedly pointed investigators towards a broader network used not only for commercial transfers but also for moving funds believed to be connected to criminal enterprises.
The suspect was apprehended on 19 June at an upscale residential complex in Negombo, where he was allegedly attempting to evade arrest. During searches and financial audits, investigators discovered that dozens of bank accounts had been opened using the identities of economically vulnerable individuals. Authorities believe these accounts were subsequently utilised to process large volumes of transactions and conceal the true beneficiaries of the funds.
Investigators are now examining whether any banking personnel knowingly assisted in the operation or failed to report suspicious activity despite regulatory obligations.
Police further allege that the network generated significant profits through commission-based charges on every dollar transferred overseas. Financial records seized during the investigation are currently being analysed to determine the full scale of the earnings derived from the operation.
Several high-end motor vehicles, collectively valued at more than Rs. 200 million, have already been taken into custody as suspected proceeds of crime. Authorities have indicated that additional assets, including property and financial holdings, could be subject to forfeiture proceedings as the investigation progresses.
Following his arrest, the suspect was produced before the Colombo Chief Magistrate’s Court, where investigators secured a seven-day detention order to facilitate further questioning and forensic examination of financial records.