Electronic or digital financial fraud is the current, extremely distasteful description of a blight that has hit the entire globe; a menace that is perpetrated through an unbelievable labyrinth of interconnected dishonourable and nasty manoeuvres. In an era where our financial lives are increasingly becoming digital, the “perfect financial crime” no longer requires a getaway car. It just needs a high-speed internet connection and stupendously brilliant, depraved and Machiavellian minds.

Modern scams have advanced far beyond the poorly spelt emails of the past. They are now extremely sophisticated operations exploiting psychological manipulation and deep-fake technology. Financial fraud has evolved from simple street-level deception into a complex, multi-billion-dollar industry. It has been manipulated through many different currencies in different parts of the world. In Sri Lanka, the landscape of scams has shifted from traditional “pyramid” schemes to sophisticated digital heists and institutional bond scandals that threaten the very fabric of our national economy. From an international outlook, financial fraud is becoming increasingly transnational. Sri Lanka is currently under intense scrutiny by the FATF (Financial Action Task Force). Sri Lanka falling onto the “Grey List” again would have severe repercussions, potentially causing international banks to suspend payments to the island, severely upsetting our exporters.

The financial fraud profile of Sri Lanka has gone from “Bonds” to “Glitches”. Our country has been rocked by high-profile financial irregularities that serve as a stark warning about institutional integrity. First was the Treasury Bond Scandal. Often cited as the largest financial scam in the nation’s history, the Central Bank bond issuance of 2015 highlighted the risks of Insider Trading and the manipulation of government securities. The fallout cost the public billions of rupees, demonstrating how high-level collusion can bypass traditional safeguards.

The recent problem where the Treasury remitted a very large amount of foreign currency to a different portal to which money should not have been sent is a special type of Financial Fraud problem that seems to have been instigated by a deceptive email. It is under investigation at present, and it appears that it is the money that had been earmarked for foreign debt reconciliation. It is the taxpayers’ money that has been allowed to be swindled by unscrupulous crooks.

Then there is the National Development Bank (NDB) “Glitch” Controversy.

The entire banking sector was shaken to its roots by reports of a massive multi-billion-rupee fraud at the NDB. This incident, often referred to in local circles as “The Glitch,” involved the alleged diversion of funds through a sophisticated manipulation of the bank’s internal accounting systems.

Then there are the perceived Guardians, who often serve as Whistleblowers. The fight against such deep-seated corruption rarely begins with a regulator; it often starts with an individual. It is just someone who smells a rat. Maya Senanayake, a forensic expert at NDB, has emerged as a symbol of integrity in this landscape by identifying anomalies that others chose to ignore. Whistleblowers like Senanayake face immense personal and professional risks. Their role is a “Herculean effort”, very often battling institutional stonewalling to bring the truth to light. Without such individuals, “Suspense Account” spikes and “shell-company diversions” would remain invisible to the public eye.

Having mentioned just two of the buzz phrases in circulation, given in Italics above, it is pertinent to provide definitions for some of these phrases that are being bandied about very frequently in articles on the main subject of this article.

· SCAM – It is a fraudulent scheme or deceptive act performed by an individual or group to trick a victim into giving up something of value, typically money, personal information, or assets. It is a blatant lie or a misrepresentation of the truth. Unlike theft (where something is taken by force), a scam usually involves the victim “willingly” handing over assets because they believe the fraudster’s story. Scams often rely on psychological manipulation, such as creating a sense of urgency, fear, or the promise of a “too good to be true” reward.

· HACKERS –

The term has evolved significantly and carries different meanings depending on the context. In the broadest sense, a hacker is someone who uses technical skills to overcome a problem or bypass a system’s limitations. The cybersecurity industry generally classifies hackers by their intent, often using a “hat” colour system.

The White Hat Hackers are an ethical group that is hired to detect vulnerabilities. They are legal and helpful as they improve security by reporting bugs.

The Black Hat Group are cybercriminals who break into systems illegally. They are malicious, steal data, plant malware, or disrupt services.

The Grey Hats Individuals who may break laws to access a system, but without malicious intent. They are individuals who might find a bug without permission and then offer to fix it for a fee.

· MONEY LAUNDERING – It is the process of “cleaning” illicitly-earned money by passing it through complex bank transfers or commercial transactions.

· TREASURY BOND –

A government debt security that provides a fixed interest rate. Manipulating these affects the nation’s debt and interest rates.

· WHISTLEBLOWER –

It is an “insider” who reports and even makes public, concealment of illegal or unethical activities within an organisation to the public or relevant authorities.

· SUSPENSE ACCOUNT –

A temporary account used to hold funds while their final destination is determined. These are frequently used in fraud to “hide” money during transfers.

· SHELL COMPANY –

No., NO…, it is not the Shell Company that deals with fuel. This terminology refers to a company that exists only on paper and has no active business operations. It is very frequently used to obscure the identity of those moving money. They become “Ghosts”.

· FORENSIC AUDIT –

An examination of financial records to find evidence that can be used in a court of law or for legal proceedings.

When one examines some of these frauds and scams, it becomes clear that at the bottom of the distasteful occurrences lie systemic inadequacies. Scrupulous attention to all details of financial transactions, trustworthy and fool-proof systems dealing with financial transactions, utmost vigilance and a very high degree of suspicion are the incontrovertible needs of the hour. The powers-that-be in all things that deal with financial transactions must consist of people with unblemished honesty, unbridled integrity and honour.

International best practices now emphasise a shift from “rules-based” to “risk-based” oversight, even going to the extent of utilising Artificial Intelligence (AI) to detect suspicious patterns in money laundering and financial fraud that a human eye might miss.

For individuals and the general public, the Three Golden Rules for Protection are as follows”

· Demand Transparency:

Whether you are an investor or a depositor, always ask for the audited financial statements of the institution.

· Verify the Chain:

In government securities, ensure you are dealing through registered primary dealers.

· Support Protections:

Advocate for stronger Whistleblower Protection Acts to ensure that those who speak the truth are not penalised by the system they seek to save.

The trick is to protect ourselves from the Invisible Thief by protecting ourselves from Modern Scams. Here is a breakdown of the most prevalent threats today and how to safeguard your assets.

A. The “Urgent Authority” Tactic

Scammers often impersonate trusted institutions such as banks, financial institutions, tax offices, or law enforcement. They create a sense of artificial urgency, claiming your account has been compromised or you owe an immediate fine.

· The Red Flag: Any request to move money to a “safe account” or pay via untraceable methods like gift cards or cryptocurrency.

· The Defence:

Hang up immediately or delete the message if it is on email. Contact the institution using a verified phone number from their official website or the back of your bank card to check the veracity of the request.

B. Investment and “Get Rich Quick” Schemes

With the rise of digital assets, “pig butchering” scams have become rampant. Fraudsters build a relationship with the victim over weeks (the “fattening”) before suggesting a “guaranteed” investment opportunity in crypto or forex (the “slaughter”).

· The Red Flag: Returns that consistently outperform the market with “zero risk.”

· The Defence:

If an investment opportunity sounds “too good to be true”, it almost always is. Professional financial advisors do not solicit clients via WhatsApp or dating apps.

C. Phishing and Smishing (SMS Phishing)

These are deceptive messages designed to steal login credentials. You might receive a text stating a package delivery failed, or your Netflix subscription has lapsed, followed by a link to a “login” page that looks identical to the real thing.

· The Red Flag: Unusual URLs (e.g., wellsfarg0.net instead of wellsfargo.com) and unexpected attachments.

· The Defence:

Never click links in unsolicited messages. Use Multi-Factor Authentication (MFA) on all sensitive accounts; even if a thief gets your password, they won’t get the secondary code.

4. The AI Impersonation (The Grandparent Scam)

Advancements in AI voice cloning allow scammers to mimic the voice of a loved one in distress. They may call claiming to be in a car accident or legal trouble, begging for immediate funds.

· The Red Flag: High emotional pressure and a demand for secrecy.

· The Defence:

Establish a “family password” – a unique word or phrase only your inner circle knows. If the caller cannot provide it, they are not who they say they are.

The Three Golden Rules for Financial Safety are

· Slow Down and Do Not Get Frightened:

Scammers rely on panic. Taking five minutes to think or consult a friend usually breaks the spell of the scam. It is also important to realise that some scammers try repeatedly.

· Verify the Source:

Never trust Caller ID, as numbers can be easily “spoofed” to look local or official.

· Protect Your Data:

Be wary of how much personal information you share on social media. Scammers use these details to make their impersonations more convincing.

Your bank will NEVER EVER ask for your Personal Identification Number (PIN), your Account Password, One-Time-Password (OTP) or request you to transfer money to an entirely new, unknown account. If any such request comes, do not fall for it and immediately contact the institution through their standard publicised telephone lines to check on the veracity of the request.

If you suspect you have been targeted, report it to the bank or financial institution, your local authorities and the legal investigative portals…, IMMEDIATELY.

(Some of the material presented

in this article was extracted with the help of AI.)

by Dr B. J. C. Perera
MBBS(Cey), DCH(Cey), DCH(Eng), MD(Paediatrics), MRCP(UK), FRCP(Edin), FRCP(Lond), FRCPCH(UK), FSLCPaed, FCCP, Hony. FRCPCH(UK), Hony. FCGP(SL)
Specialist Consultant Paediatrician and Honorary Senior Fellow, Postgraduate Institute of Medicine, University of Colombo, Sri Lanka.
An independent free-lance correspondent.

The passing of Professor M S M Mookiah is a great loss to the National Peace Council of Sri Lanka and to all who knew him. He was a steadfast supporter of our mission of peacebuilding and our commitment to inclusion and justice for all communities. Since 2006 he has served loyally as a member of the NPC Governing Council and Board, bringing to our work the benefit of his long experience in public life and academia. He believed deeply in the possibility of healing divisions through dialogue and understanding. What gave him satisfaction was participation, service, and the opportunity to contribute to a better future.

Professor Mookiah was an alumnus of the University Peradeniya, a Commonwealth Scholar at the University of Wales, Institute of Science and Technology, Cardiff and returned to Peradeniya and served and Head Geography at the University of Peradeniya. Subsequently he served as Vice Chancellor of Eastern University, Sri Lanka and later as a member of the Public Service Commission of Sri Lanka. He carried these responsibilities with dignity and humility. Even after retirement, there was nothing he enjoyed more than travelling to distant parts of the country to meet people and discuss the challenges of reconciliation and post war reconstruction. He believed strongly in dialogue, coexistence, and the possibility of building a more just society focusing on subjects such as Pluralism, Transitional Justice, Social Cohesion and Reconciliation.

His scholarly contributions were not merely academic but deeply rooted in social justice. He acted as a catalyst and inspiration for thousands of students, particularly helping students from Hill Country enter higher education. He mentored thousands of students and stood as a primary source of inspiration for students from Hill Country to break barriers and enter the sphere of higher education. He remained deeply loyal to the hill country where he was born and to the Malaiyaha Tamil community whose advancement he quietly supported throughout his life.

He understood the hardships faced by plantation families and the barriers confronting young people seeking higher education. One of his most meaningful contributions was the scholarship scheme he initiated in 2014 together with his brother Dr S. Kanapathyraja. Through the support of the Rotary Club of Carmarthen in Wales and later other well-wishers abroad, the scheme enabled university students from plantation communities to pursue higher education. It continues to this day and stands as a lasting part of his legacy.

Professor Mookiah was also a warm and gracious friend. He and his wife welcomed us into their home with generosity and kindness and shared the chocolates his sons brought when they visited from abroad. In later years he spent long periods with family in Switzerland, the United States, and India, where his ashes now lie. But his life’s work belongs to Sri Lanka, to its universities, to the students he inspired, to the communities he served, and to the cause of peace and reconciliation to which he remained committed throughout his life. His presence will remain with us at NPC in his work of peacebuilding, in the scholarship scheme he helped create, and in the memories of all who had the privilege of knowing him.

We offer our prayers for his soul to rest in peace and extend our heartfelt condolences to his family, friends, and the thousands of students grieving this great loss.

By National Peace Council of Sri Lanka

Srimani Athulathmudali wanted me but Richard Pathirana prevailed

Before, I leave this chapter, I thought it would be appropriate to say something about the Minister and the Deputy Minister. I am encouraged to do this because they were some of the nicest persons anyone could work with. The Minister, Mr. Anura Bandaranaike, had great liberal instincts. A conversation with him never descended to the sordid or petty. He was very well read and principally interested in issues. He also had a lively sense of humour and a satirical eye for human foibles, which periodically resulted in a booming laugh which was heard much beyond his room.

He was broad and generous in his approach to anything and soon began to hate the interminable nit picking of trade unions. After spending much time and effort in discussions with them, one day he decided he had had enough. “Dharmasiri, you handle them. I am not going to talk to them,” he blurted out in considerable irritation. I promised I would do so and advise him if I thought that his meeting them would be absolutely necessary.

Mr. Bandaranaike dealt with policies and issues. Details bored him. He shunned micro management. He was so nice to me that most of the time he refrained from addressing me as “Secretary.” Even on official files and documents his minute would start with “My dear Dharmasiri.” One day, when I pointed this out, he merely laughed, but continued. It was a pleasure to work with him, as well as his personal staff such as his Private Secretary, the Co-ordinating Secretary and others. They were all gentlemen.

Deputy Minister Tissa Attanayake.

The Deputy Minister was Mr. Tissa Attanayake, a Member of Parliament from the Kandy district. He was young, had a good personality and was a graduate of the University of Kelaniya. At my first meeting with him, I realized that he possessed great potential. He was well balanced and mature, and what was rare for a Sri Lankan, and particularly for a politician, had the ability to listen carefully and talk sparingly. During a very troublous period, he was of great assistance to his Minister. He realized and appreciated the pressure I was under and went out of his way to relieve me whenever possible. He handled political issues with skill and patience and never shirked work or responsibility. We need young politicians of his calibre irrespective of which parties they belong to.

Post election issues and the offer of two ministries

After the elections, Cabinet formation and the selection of Secretaries took awhile. In the meantime I instructed my officers to attend to routine matters, not to sign anything of a statutory nature, because the existing Ministries were now dissolved. With the dissolution I was no longer a Secretary. I said that I would be remaining at home until the new government decided what to do with me, but that of course I would be available for any consultation or advice.

Matters were at this when Mrs. Srimani Athulathmudali phoned. She had contested the elections in the Colombo district with her husband Lalith’s old seat of Ratmalana as the base. She had done quite well polling over 100,000 votes. Mrs. Athulathmudali said that she was likely to get the Ministry of Transport, Highways and Women’s Affairs, with Environment perhaps added and she invited me to become the Secretary to the new Ministry. She said that she would appreciate my guidance and went on to say “Lalith had a very high regard for you.” I knew that the “transport” part of the Ministry was going to be quite troublesome. As a Ministry it would not have been a priority choice as far as I was concerned. But I could not decline due to the excellent relations of mutual respect and trust that Mr. Athulathmudali and I had developed working in two difficult Ministries, as well as knowing Mrs. Athulathmudali. I therefore accepted but reminded her that she should first clear this with the new Prime Minister.

She said she would. A day later I was informed that the Prime Minister had approved and I was invited to her home at Flower Terrace on the afternoon of August 21 in order to discuss arrangements in relation to the Ministry. We had almost a two hour discussion. I found Mrs. Athulathmudali to be calm and incisive in her thinking. She seemed to posses the temperament necessary for a Ministry such as Transport. It was an advantage to have a Minister who would not be easily flustered.

That same night Mr. Richard Pathirana rang. He said, “You must come to Education. This is a very important Ministry and there’s a lot of work to be done.” This was quite unexpected and I was very surprised. I did not want to go back to the now reconstituted Ministry of Education and Higher Education. I had several reasons. Firstly, I had already served in the combined Ministry as well as the separate Ministry of Higher Education for a total period of over four years. Secondly, I did not really know Mr. Pathirana. I had only come across him a few times in the Parliamentary Consultative Committee on education where he functioned as the Chief Opposition spokesman on Education. He had also telephoned me a few times on some official matter. That was all.

One could also see that he had his own unique style of speaking and a bit of a temper. I was not sure how I would interact with him. But thirdly, and most importantly, and as I have already related, the officials of the Ministry and the other agencies under the Ministry had given me such an emotional send-off when I left for Public Administration that I felt it impossible to return to the same place. It was a send-off of no return! I therefore told Mr. Pathirana that I wouldn’t like to come back and explained why.

He had made up his mind and was not prepared to take “No” for an answer. He said that I should not be too sensitive about the send-off. “In any case everyone will know that it was I who called you back,” he said. My successor Mr. Weragoda, an experienced administrator was the Secretary at this time. So I told Mr. Pathirana that he already has a good Secretary and that I would not wish to displace him. He was not to be denied. “Don’t worry about Mr. Weragoda. We will find a place for him. I want you to come,” he replied. There was no point in taking matters any further.

“It’s up to the Prime Minister and you,” I said. He thanked me and said that he will get back. I did not mention about Mrs. Athulathmudali to him, because that would have been an unnecessary complication. As in the case of some previous occasions where I was involved the matter had to be now sorted out by the two Ministers with the Prime Minister.

When I informed Mrs. Athulathmudali about this latest and unexpected development, she was gravely disappointed. But she herself felt that she couldn’t fight a person of Mr. Pathirana’s seniority and standing in the party, on this issue. On the morning of August 23, a combined official farewell function for the outgoing Minister of Higher Education, Mr. Anura Bandaranaike, and a welcoming function for the new Minister of Education and Higher Education, Mr. Richard Pathirana, had been organized in the auditorium of the UGC. Some one telephoned me at home and invited me to be present. I had still not received my letter of appointment.

I therefore informed the caller that I would only participate in anything of an official nature if and when I was formally appointed. I had no status, and I thanked him and declined the offer. Mr. Pathirana was then kind enough to phone me personally and invite me to the function as his guest. It was a nice function with both Mr. Bandaranaike and Mr. Pathirana making good speeches. Mr. Pathirana publicly stated that he was glad that he was able to persuade me to return to the Ministry. The whole proceedings were encouraging because they were so amicable and civilized. When the function was over I accompanied Mr. Bandaranaike to his car. On the way he said, “Amma will become Prime Minister after the Presidential Elections and she will want you back.” I just smiled. It would have been a delight to work with her again. But what struck me most was her manner of thinking. Mrs. Bandaranaike was already in the Cabinet as Minister without Portfolio. She could have asked for me, since she was entitled to a Secretary. But she was not prepared to do that.

Knowing her, I am certain that she thought about me, and not of herself. Given my record and my seniority she would not have wanted me to be a Secretary to a Minister without Portfolio, even if that Minister was herself. She was going to wait until she became Prime Minister, so that I would then be Secretary to the Prime Minister. That this was precisely what she had in her mind was borne out by later events which I will record in the appropriate place.

In the meantime, I informed Mr. Pathirana, that I was going home since I did not wish to come to office and function, and sign official documents without receiving a letter of appointment. He agreed and said that he would get the Presidential Secretariat to expedite my letter. During the intervening period, I was encouraged by several telephone calls I received from some of my former colleagues in education welcoming me back.

(Excerpted from The Art of Governance, autobiography of MDD Pieris)