HC upholds first-ever conviction over illegal pyramid scheme in Sri Lanka

By Bhagya Silva

The Anuradhapura High Court upheld the first-ever conviction in Sri Lanka related to an illegal pyramid scheme, affirming the decision of the Magistrate’s Court to convict two Development Officers of the Department of Agriculture Research. 

The suspects were convicted after a legal battle that spanned 15 years.  

The suspects were initially found guilty of promoting and marketing a pyramid scheme while serving as government employees. 

The High Court verdict confirmed the Magistrate’s ruling, which sentenced them to two years of rigorous imprisonment, suspended for ten years, along with a fine of Rs. 500,000 each.  

The initial case was filed in connection with a pyramid-style business seminar conducted on December 15, 2005, at the Pubudupura Community Hall. Investigations by the Central Bank of Sri Lanka revealed that the suspects had recruited members into an unlawful scheme, violating Section 83(C)(2) of the Banking Act No. 30 of 1988, as amended.  

The prosecution had managed to establish that the first suspect had earned Rs. 1.16 million and the second suspect Rs. 2 million through their involvement in the scheme. Based on this evidence, Magistrate K.M.J.P. Samarasinghe found the suspects guilty after years of proceedings.  

Following the Magistrate’s ruling, the convicts filed an appeal against their conviction. However, Anuradhapura High Court Judge Nalin de Kariyawasam recently dismissed the appeal, stating that there was no basis to overturn the lower court's decision. The High Court emphasised that the appellants had clearly violated banking regulations, and the prosecution had established their guilt beyond any reasonable doubt.  

The court also took into account the arguments presented by Additional Solicitor General Dileepa Peeris PC, who appeared on behalf of the Attorney General, affirming that the actions of the appellants constituted a direct breach of the Banking Act.