The Financial Crimes Investigation Division (FCID) has arrested a 35-year-old resident of Wellawatte over an alleged large-scale foreign exchange fraud in which millions of US dollars were transferred overseas through companies registered under different names, Newswire reported.
The suspect was taken into custody on June 19 in the Periyamulla area of Negombo following an investigation into the alleged registration of multiple companies and bank accounts that were used to falsely claim imports and facilitate the transfer of foreign currency out of Sri Lanka, police told the outlet.
Investigators allege that funds linked to drug trafficking were deposited into the company accounts and later transferred abroad, while false import transactions were used to evade customs duties and taxes. Authorities also suspect the proceeds were used to acquire assets and properties in violation of anti-money laundering laws.
Between January 1, 2023 and September 15, 2025, 89 local companies had reportedly transferred large sums of US dollars overseas through telegraphic transfers (TTs) on the pretext of importing goods, despite no such imports taking place, police said. Sri Lanka Customs reported the matter to the Inspector General of Police, triggering the investigation.
The arrest fits the pattern Public Security Minister Ananda Wijepala outlined to parliament earlier this month, when he disclosed that multi-agency probes had uncovered roughly US$85 million in foreign exchange fraud linked to bogus imports using shell companies registered in the names of small groups of individuals and shut down within months. Wijepala said one investigation had been opened off a separate narcotics probe — the same drug-trafficking connection police now flag in the Wellawatte case.
The government has since tightened the regulatory framework. On June 19, the Finance Ministry issued an extraordinary gazette requiring banks to assign unique reference numbers to every import-related telegraphic transfer and share importer data with Sri Lanka Customs. Wijepala has also said legislation will be amended to reclassify foreign exchange violations as predicate offences under anti-money laundering law.
The FCID is conducting further investigations.
