14 suspects detained for Rs. 263 m fraud

By Lakmal Sooriyagoda

Fourteen suspects who were allegedly involved in a massive financial fraud after fraudulently withdrawing money from the accounts of foreign credit cardholders through an e-commerce application service provided by a State bank in Sri Lanka had been arrested and detained under the custody of Criminal Investigations Department (CID).

Due to this international financial fraud, the State bank has to incur a loss of Rs.263 million and the suspects had been charged under the Public Property Act, Prevention of Money Laundering Act and the Prevention of Terrorism (Temporary Provision) Act.

The CID, which is investigating into the incident, alleged that the two Non Government Organisations (NGOs) had obtained the Internet Payment Gateway (IPG) facility from the State bank for the concerned bank accounts since the end of 2011. The CID said the two NGOs had received a massive amount of money as donations from foreign credit cardholders for a period of one year.

However, the foreign credit cardholders had complained to the credit card issuers that their money had been fraudulently withdrawn by someone without their knowledge.

Issuing a Chargeback Notice to the Sri Lanka State bank with regard to Rs. 454,251, the FIA Card Services – a representative institution of the Bank of America in USA – had alleged that alleged that the relevant money transaction had been taking place without its customers’ knowledge.

The CID alleged that the money transactions had been taking place after the preparing of fake credit cards and the money in question had been deposited in the bank accounts belonging to the Sahana Foundation and the Women and Children Development Foundation.

The CID alleged that due to this international fraudulent transaction, the State bank had to incur a loss of Rs. 263 million and suffered severe damages to its reputation locally and internationally.

Filing a report in connection with the incident, the CID informed Colombo Fort Magistrate Kanishka Wijeratne that it had arrested 14 suspects and held them under detention order for further questioning.

The CID suspected that through this fraudulent transaction, a massive amount of funds could be remitted to the LTTE terrorist organisation. The suspects had been detained under CID custody upon a detention order by President Mahinda Rajapaksa as the Minister of Defence.