Gaps in Sri Lanka law enforcement are often well known amongst the public, and the Police Department itself has built a notoriety over the years for corruption and malpractice. However, there are some crimes, especially modern ones which the local law enforcement agencies have not built capacity nor competencies to combat. Two such areas where there is an urgent need for modernisation, capacity building, upskilling and synergy are in dealing with financial crimes and crimes in the digital domain (online / via social media and other communication platforms). Case in point are the growing public security concern of pyramid schemes and other online financial scams which many vulnerable Sri Lankans fall victim to.
Over the last few years, in the face of a prolonged economic crisis that plagued Sri Lanka, a wave of desperation has gripped the nation. This, mixed with high inflation, increased taxation, and the soaring cost of living have left the population searching for ways to supplement their incomes. This dire situation has provided a fertile breeding ground for pyramid schemes, which thrive on the vulnerability and desperation of the people. Despite warnings from the Central Bank of Sri Lanka (CBSL), the influence of these fraudulent schemes appears to be spiralling out of control, ensnaring unsuspecting victims across the country. However, despite much publicity and awareness building, action being taken against pyramid schemes have been few and far apart. The Central Bank has issued a notice stating that participating in pyramid schemes is a punishable offence and has identified several entities that conduct prohibited schemes. The Police noted that several pyramid schemes are now functioning via social media and platforms such as mobile phone apps of WhatsApp and Telegram.
Recently, responding to a question raised at the Committee on Public Finance, which was held at the Parliament, Central Bank Governor Dr. Nandalal Weerasinghe said that law enforcement authorities are yet to complete any lawsuit with regard to some 20 illegal pyramid schemes which were determined by the CBSL to have been engaged in illegal activities under the Banking Act. The Governor said the oldest pyramid schemes were determined by the Central Bank in 2011, but the legal process is still ongoing.
When asked about the allegations made by the CBSL about enforcement, the Police Department acknowledged to The Daily Morning that there have been shortcomings when it comes to investigating pyramid schemes including those pertaining to technological infrastructure-related gaps and technical challenges which in turn play a role in the delay in investigating such cases. Police Media Spokesperson, SSP Buddhika Manathunga commenting on the Central Bank Governors allegations, said the Police is aware of shortcomings in the relevant legal framework, investigations and the judicial process, which need to be addressed.
It is understood that the said technical challenges include tracking down Internet Provider (IP) addresses as well as obtaining reports that come from foreign countries. “Many of these pyramid schemes that operate in our country involve a person or an entity that operates from a foreign country,” Manathunga noted, adding further that while it is not a case of lacking expertise, the Police sometimes lack the infrastructure facilities to investigate certain pyramid schemes, making them rely on other domestic entities. “We have only relied on a foreign lab for investigations once,” Manathunga said. “When we lack infrastructure facilities, we usually rely on the University of Moratuwa and the Telecommunications Regulatory Commission,” Manathunga explained, emphasising that the investigation of foreign reports often results in delays.
Given the Government's stated ‘tough stance’ on corruption and law and order, it would be prudent for them to expedite introducing new legislation, and support the capacity development and upskilling of law enforcement officers and prosecutors alike with assistance from international organisations such as the United Nations office on Drugs and Crime (UNODC) and Interpol. Sri Lanka should also expand bilateral and multilateral agreements on cross border assistance and cooperation on crimes conducted in the digital domain.