21 companies under CID probe over alleged $700 Million import scam

By Roshan Thusara

Colombo, July 24 (Daily Mirror) - The Criminal Investigation Department (CID) yesterday informed Colombo Chief Magistrate Asanga S. Bodaragama that investigations are underway to establish the involvement of 21 leading companies in a large-scale racket involving the illegal transfer of foreign currency out of Sri Lanka under the guise of importing goods, in violation of the Customs Ordinance.

The CID made these submissions when the complaint regarding the alleged transfer of more than Rs. 190 billion worth of foreign currency overseas by falsely claiming to import goods was taken up before court.

The CID informed court that six companies linked to the alleged racket have so far been identified, while investigations are continuing to identify the involvement of other companies.

The Financial Crimes Investigation Division of the CID informed court that the suspect, identified as Jeffrey Mohamed, who has been remanded for allegedly transferring more than US$700 million overseas through fraudulent means, had acted as a facilitator of the racket.

When the suspect was produced before court by prison officials, the CID strongly objected to granting him bail, stating that he had failed to reveal the names of companies involved in the alleged scheme and had not provided assistance to the investigations.

Making further submissions, the CID’s Financial Crimes Investigation Division said:

“The fraud was carried out by sending foreign currency overseas while falsely claiming that goods were being imported. The racket was uncovered after examining the bank accounts of 36 companies.”

“The money had been transferred overseas on 10,156 occasions; however, there are no records with Customs regarding goods imported using those funds. Investigations are also underway to determine whether this involved undervaluing imported goods to evade government taxes.”

The CID told court that the suspect had operated the racket in an organised manner while posing as a director of an institution named “A.Y. Investment”, which was operating in the Colombo Fort area.

The investigators further informed court that a large quantity of US dollar notes worth millions of rupees was recovered from the suspect at the time of his arrest. A luxury vehicle worth over Rs. 200 million, allegedly purchased using illegally obtained funds, and a stock of gold were also taken into custody.

The CID said a special investigation has been launched to arrest a number of large-scale businessmen who allegedly used the suspect’s services to transfer dollars overseas illegally and evade taxes.

Appearing for the suspect, President’s Counsel M.A. Suhair and Attorney Asanka Perera requested that he be released on suitable bail, claiming that goods had been imported in accordance with legal procedures.

After considering the submissions, the Chief Magistrate observed that the suspect had not cooperated with the investigations. The Magistrate noted that considering attempts to conceal evidence and avoid court proceedings, it would not be possible to expect further cooperation from the suspect in such a major investigation.

Accordingly, the Magistrate rejected the bail application and ordered that the suspect be remanded until August 6.