Jan 29, 2019

Massive Fraud At Sampath Bank Featured

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physician up to Rs 125 Million with no security and no proper application or evaluation of such application, and withdrawn cash.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.

(Colombo Telegraph)