A 34-year-old businessman from Maradana has been arrested over an alleged illegal foreign money-transfer operation involving about US$80 million, police said on Thursday.
The arrest was made by the Financial Crimes Investigation Division (FCID), Daily Mirror reported. Investigators are examining the suspected movement of the funds into foreign bank accounts through what they describe as an illegal Telegraphic Transfer (TT) system.
The transactions ran over a two-year period from 2023 to 2025, according to investigators, with the total put at roughly Rs. 23 billion.
How the money is alleged to have moved
Hiru News reports the same arrest and adds the alleged cover story: the money was sent overseas under the guise of importing goods.
The two accounts fit together. An illegal telegraphic transfer channel is the mechanism; invoicing for imports that were never made — or were made at a fraction of the declared value — is the paperwork that would let outbound payments clear as ordinary trade settlements.
The figures are internally consistent. US$80 million against Rs. 23 billion implies an exchange rate near Rs. 287 to the dollar, which sits within the range the rupee traded in across 2023 to 2025.
Update (September 10): the trade, the shell companies and the earlier case
Later reports from NewsFirst and Hiru News put considerably more detail on the record.
The suspect trades in cosmetics and operates from Second Cross Street in Colombo, NewsFirst reported. The goods supposedly being imported were cosmetics, Hiru’s later report said, citing a senior officer of the Police Financial Crimes Division.
The structure alleged is the substantial new fact: investigators say the operation ran on 26 fraudulent companies and 54 bank accounts opened in the names of those entities. NewsFirst puts the sum at approximately Rs. 23.7 billion, slightly above the Rs. 23 billion first reported — a figure that implies an exchange rate near Rs. 296 to the dollar rather than Rs. 287, still within the 2023–2025 trading range.
The suspect is to be produced before the Colombo Chief Magistrate’s Court.
It closely resembles a case from August
Hiru notes that “in a previous case” four managers at leading private banks and a businessman were arrested over a racket that sent nearly a billion dollars abroad without importing any goods. It does not identify the case, but our archive does: in August four private bank officials were remanded over an alleged US$1 billion Undiyal import racket, an inquiry that began with the arrest of Jeffrey Mohamed, alleged to have registered about 36 bogus companies in the names of eight people to invoice for imports that never arrived.
The parallel is close — the same FCID unit, the same use of shell companies to make outbound payments look like trade settlements, the same order of magnitude in the number of entities.
Update (September 10, evening): named, remanded, and the link to the billion-dollar case confirmed
A later Hiru News report names the suspect and confirms the connection this article had declined to assert.
Colombo Chief Magistrate Asanga S. Bodaragama ordered businessman Mohamed Muzammil Mohamed Inshan remanded until 17 September. Investigators asked the court to deny bail while inquiries into the bank accounts continue.
The FCID told the court Inshan was arrested for collaborating with Jeffrey Mohamed — the alleged operator of the syndicate behind the August case — and that Inshan had effectively managed and controlled that scheme.
Crucially, the report resolves the 26-versus-36 company question raised above: of the 36 front companies Jeffrey Mohamed is alleged to have created using the names of eight individuals, 26 were held directly under Inshan’s name. The 26 companies and the 36 companies are not two parallel structures but one, with Inshan holding the larger share.
Hiru puts the full syndicate’s activity at 199 telegraphic transfers moving more than US$1 billion abroad, causing losses to both commercial banks and the government. Officials from four leading private banks have already been remanded in the same operation.
The two investigations are therefore the same investigation, and the US$80 million attributed to Inshan is a component of the wider billion-dollar case rather than a separate racket.
A discrepancy over the arrest date
The reports do not agree on when the arrest happened. The Daily Mirror and NewsFirst filed on Thursday, 10 September. Hiru’s later report says the businessman was arrested “yesterday” — 9 September — and adds that he was taken into custody when he arrived at the Financial Crimes Division to give a statement, rather than being sought out.
Hiru also puts the transfers “between 2023 and 2025”; NewsFirst says the operation had been “ongoing since 2023” without closing the period.
What is still not stated
No outlet identifies the destination accounts or jurisdictions, or says what alerted the FCID. None reports whether formal charges have yet been filed as against the remand order, names the four private banks whose officials were remanded, or names the eight individuals whose identities were allegedly used to register the companies. Jeffrey Mohamed’s own current status — whether in custody, on bail or at large — is not stated in any of Thursday’s reports.
Sri Lanka’s exchange-control regime restricts outbound capital transfers, and trade misinvoicing is among the mechanisms the country’s anti-money-laundering framework is assessed on — a framework already under external scrutiny ahead of an Asia/Pacific Group evaluation.
Sources: Daily Mirror, Hiru News, NewsFirst, Hiru News, Hiru News.
