The scam appeared to have begun nearly one and a half years ago. The victims of the fraud say their cheques and the slips amounts were manipulated and balances were added as Over Drafts (ODs). The fraud came to light when their accounts were audited last year.
Criminal Investigation Department, on 15/01/2019, arrested the suspected bank manager and the other individual and presented them before the Kaduwela Magistrates’ Court. The Magistrate remanded the manager and the other individual for 14 days.
“The auditors had reportedly noticed the inconsistencies in the account, but initially could not figure out what the problem was. Following a thorough process, the auditors were able to identify suspicious transactions on their books and mismatches on their slips and cheques. The victims of this fraud are a group of businessmen in the area including a vehicle importer and an electrical contractor and an electrical shop owner,” a source familiar with the matter told Colombo Telegraph.
The bank manager has, with the help of a regional manager Sampath Bank and the present Manageress of the Thalahena Branch, have debited the account of a customer who is an Ayurvedic physician and made bank transfers to 21 persons who were completely unknown to the customer.
“This is the first time in the banking history that a bank has committed a fraud on a customer,” a banker told Colombo Telegraph. Our sources said there would be criminal liability on the directorate of Sampath Bank.When the bank manager and another recipient of the cheated money were produced before the Kaduwela Magistrate, journalists from all main media stations have been present at the Magistrate’s Court premises covering the story. However, Sampath Bank, one of the biggest advertisers in the country, presurrized media into not running the story.
When the victims inquired from their bank branch in Thalahena about these fraudulent transactions on their accounts, the branch manager had described it as a “glitch” in the system. Moreover, he had assured them that it would be fixed soon.
The manager had apparently approved ODs for the complainant physician up to Rs 125 Million with no security and no proper application or evaluation of such application, and withdrawn cash. He had then transfered money to people chosen by him and later converted them into loans.
“There is evidence that some of these ODs were approved on bank holidays. Some ODs were approved for accounts opened under victims’ spouses with or without their knowledge. These staff members of the Sampath Bank have been operating a lucrative private bank within the bank, siphoning money off their customers. In order to entice the customers, they have approved overdrafs to such vulnerable customers with no security. In such dubious circumstances some of the customers have allowed the manager to withdraw further funds from their accounts,” our sources added.
A couple months ago, when the manager was transferred to another branch, the victims of the fraud had started receiving letters from the bank asking them to settle those dues, which they never obtained. When the victims complained to the bank, the bank officials had not taken their concerns into consideration. In fact, a senior official at the bank had informed one of the victims in writing that nothing illegal had happened as per their regulations.
It was at this point that the Physician had sought the assistance of the Criminal Investigation Department. After a prolonged investigation, the CID was able to uncover the extent of the fraud. During the period, some victims had even received threatening calls. During the investigation, it was revealed that the fraud was an organized crime.
The victims also claim that the Central Bank of Sri Lanka was in a deep slumber while Sampath Bank was siphoning off the customers’ money.
In a qualified denial, Sampath Bank PLC stated that “some parts” of the story appeared in the media referring to a massive fraud at the bank were inaccurate and misleading.
However, the bank, which has come under great public scrutiny following our story, failed to say which part of the story was inaccurate.
“Due to ongoing investigations, the Bank is not in a position to disclose detailed information,” the statement by the bank said.
Admitting that there was a massive fraud at the bank, the statement said this incident occurred a few months back and the Bank had already taken appropriate measures to correct the situation and ensure no-recurrence.
“We wish to assure the public that we have taken steps to ensure that our customers will not be affected in anyway due to the incident reported,” it started.
The statement by Sampath Bank, curiously, has not made any specific reference to the Colombo Telegraph story which provided extensive details relating to the fraud. The same statement has also been sent to the Chief Operating Officer of the Colombo Stock Exchange.
Sampath Bank, however, has failed to respond to following questions sent to its Chief Legal Officer, Senaka Hewavitharana by Colombo Telegraph.
- Which parts of the story appeared in Colombo Telegraph are factually incorrect?
- Has the former Manager of Sampath Bank (Thalahena branch) Manoj Rodrigo been arrested by the CID in connection with a fraud committed on an Ayurvedic Physician a customer of the same Bank? Has he been remanded for 14 days by the Kaduwela Magistrate?
- Are you in the process of investigating whether any other officials of the bank are involved in the fraud?
- Did your internal audit initially look into the complaint and exonerate the official who is now under arrest?
- Were there other officials the bank who were involved in the fraud, apart from the arrested official?
- Have you by now at least apologized to your customer Ayurvedic Physician and reassured him that all the monies illegally obtained from him by your bank would be refunded with any loss incurred by him has further damages?