US$80 Million, 3,198 Transfers: Sri Lanka Money Case Explained

The arrest itself did not take long to make the headlines. A 34-year-old businessman from Maradana was taken into custody by the Police Financial Crimes Investigation Division on September 9 in connection with an alleged operation involving approximately US$80 million transferred out of Sri Lanka. The figure is equivalent to more than Rs.23 billion. But the amount is only part of what has emerged from the investigation. According to investigators, the money was transferred between January 1, 2023 and November 21, 2025. It was sent overseas on 3,198 occasions through six State and private-sector banks, using the names of 26 companies. The investigation reportedly began after a complaint from Sri Lanka Customs concerning companies suspected of sending money abroad while claiming that the payments were connected to imports. The suspect was later produced before the Colombo Chief Magistrate and remanded until September 17. The allegations have not been proved in court.

The paperwork is at the centre of the case

International payments for imports are not unusual. Sri Lankan businesses send money overseas every day to pay suppliers, and those transactions form part of normal trade. What investigators are examining here is whether the imports used to justify the payments actually took place. Court reporting has referred to allegations that the companies connected to the investigation did not bring the claimed goods into Sri Lanka and that invoices and other documents submitted for the transactions were forged. That is an allegation from the investigation, rather than a finding that has already been established. If it is eventually proved, the significance of the case goes beyond the movement of money itself. It would mean that transactions that appeared to be ordinary import payments were allegedly being supported by paperwork that did not reflect genuine trade. That is where the Customs records become important. Sri Lanka Customs requires imported goods to be declared and says import declarations contain information including the description of the goods, their classification, the true transaction value and the currency involved. Customs also requires foreign-exchange payments for consignments to pass through permitted banking channels. In other words, a genuine import normally leaves more than one record behind. That does not mean every one of those records is automatically checked against every other record in real time. It does, however, explain why the investigation has several different trails to follow. The banking trail is one. The companies are another. Customs records form a third.

Then there are the 26 companies

The number of companies involved is one of the details that makes the case difficult to treat as a simple individual fraud allegation. Police have said 26 companies and 54 bank accounts were connected to the alleged operation. Reporting from the court proceedings has also referred to allegations that the 26 companies were registered using the details of three employees associated with the suspect’s business. Investigators will now have to establish who actually controlled those companies, who had access to the bank accounts and who authorised the transactions. The same questions apply to the companies on the other side of the transactions. Who received the money? Were the overseas suppliers genuine businesses? Were the invoices real? If goods were supposed to be shipped to Sri Lanka, where were the shipping and Customs records? None of those questions, by itself, establishes criminal liability. They are simply the pieces that have to fit together if the alleged scheme is to be proved.

The banks are part of the trail, too

There is another reason the investigation is likely to take time. The alleged transfers did not happen outside the financial system. They went through banks. Sri Lanka’s Central Bank introduced its International Transactions Reporting System in 2022. The system requires licensed commercial and specialised banks to report information on cross-border and domestic foreign-currency transactions. The Central Bank said the system was designed in part to address data gaps and improve the country’s visibility over foreign-currency movements. Sri Lanka also has a separate anti-money-laundering framework requiring financial institutions to monitor transactions and report suspicious activity to the Financial Intelligence Unit when the relevant threshold for suspicion is reached. That does not mean that the involvement of six banks proves that any of those institutions did something wrong. A bank employee processing a payment can only work with the information available to the institution at the time. A fraudulent invoice can look different from a genuine one if the bank does not have access to the information held by Customs or the overseas supplier. The investigation therefore has to establish something more specific: what information was available to the banks, what documents accompanied the transfers, whether anything appeared unusual and whether any transaction or pattern resulted in further scrutiny.

This is not the first case of its kind

The US$80 million investigation is also being examined against the background of a much larger case involving alleged outward transfers through companies set up to resemble legitimate businesses. Court reporting has linked the current suspect to that wider investigation and has referred to allegations involving substantially larger sums and additional companies. Those allegations should be kept separate from the US$80 million case now before court. They are part of the wider investigation, not proof that every company or transaction connected to it was unlawful. Lakbima previously examined the wider issue in The US$1 Billion Question: How Did So Much Money Leave Sri Lanka? The earlier investigation looked at the scale of the alleged foreign-exchange outflows. The latest case gives a more detailed look at the mechanics: multiple companies, multiple accounts and thousands of individual transfers.

There is a timing issue worth watching

In August, the Government approved in principle a proposal to amend the Foreign Exchange Act so that unauthorised transfers of funds outside Sri Lanka could specifically be recognised as a criminal offence. The Cabinet decision referred specifically to advance payments made for imports where the corresponding goods are not subsequently brought into Sri Lanka within a reasonable period. Under the Government’s explanation, the existing Foreign Exchange Act allowed a monetary penalty in such circumstances but did not specifically provide for criminal prosecution under that Act. The proposed amendment is intended to strengthen the legal response. That decision came only weeks before the latest arrest. It should not be read as evidence that the suspect is being prosecuted under the proposed amendment. It is not. The investigation and the proposed change in the law are separate matters. But the timing does show that the Government itself has identified unauthorised outward transfers connected with imports as an area where the existing framework needs strengthening.

Sri Lanka has a reason to take this seriously

Foreign exchange was one of the defining problems of Sri Lanka’s recent economic crisis. The country ran short of dollars, imports were restricted and businesses spent months dealing with shortages of foreign currency. Protecting reserves became a central part of economic policy. That is why an alleged US$80 million outward movement deserves attention even before investigators establish where every dollar ultimately went. It is important not to overstate what the figure means. US$80 million transferred overseas is not automatically the same thing as US$80 million stolen from the Treasury or directly removed from the Central Bank’s reserves. The allegation is narrower: foreign currency was allegedly transferred abroad through transactions that were presented as payments connected to imports. If investigators prove that the underlying imports did not exist, the issue becomes one of foreign-exchange control, financial crime and potentially other offences depending on where the money came from and where it eventually went.

The investigation now has to follow the money

The arrest is the beginning of this case, not its conclusion. Investigators will have to work backwards and forwards through thousands of transactions: from the Sri Lankan companies that initiated them, through the banks that processed them, to the overseas accounts that received them. They will also have to compare those transactions with the import records. That may be the most important part of the investigation. A bank can show that money was sent. A Customs record can show whether goods arrived. A company registry can show who formally controlled a business. Overseas banking records can potentially show what happened after the money left Sri Lanka. Put together, those records should tell a much clearer story than any single transaction can. For the businessman in remand, the allegations will ultimately have to be tested through the judicial process. For the authorities, there is a second task. If the alleged transactions are proved, they will need to explain how the companies were established, how the payments were processed and how the trail was eventually detected. There were 3,198 transfers spread over almost three years. The answers to what happened to that money may now tell Sri Lanka something just as important as the amount itself: how well its financial, banking and Customs systems can see what is happening when money moves across the border.