Institutions and individuals involved in pyramid schemes to face criminal charges

• CID to handle complaints over pyramid scams

By Darshana Sanjeewa Balasuriya   

The government has announced its plans to take action against institutions and individuals involved in pyramid schemes, stating that such fraudulent activities will be treated as criminal offenses.  

 State Minister of Finance, Ranjith Siyambalapitiya, emphasized that pyramid schemes are not legitimate businesses and those engaged in such practices will face punishment under criminal law. 

 
While the Central Bank has already prohibited these illegal schemes under the Banking Act No. 30 of 1988, the government intends to go beyond this Act and apply criminal law to ensure justice is served.   

The Attorney General will be notified of these fraudulent activities, with complaints forwarded to the police and the Criminal Investigation Department, the State Minister said.   
He said cases will be filed against the deceptive companies and individuals responsible for leading these schemes.   

Despite warnings issued by the Central Bank, a significant number of people continue to fall victim to these scams, enticed by the promise of short-term gains.   

In response, the Central Bank recently banned nine entities, including OnmaxDT and MTFE (Metaverse Foreign Exchange) SL Group, for conducting pyramid schemes. Tiens Lanka Health Care (Pvt). Ltd., Best Life International (Pvt). Ltd., Global Lifestyle Lanka (Pvt). Ltd., Mark-Wo International (Pvt). Ltd., VML International (Pvt). Ltd., Fast 3Cycle Internatioal (Pvt). Ltd. (F3C), and Sport Chain App, Sports Chain ZS Society Sri Lanka have also been prohibited from operating due to their involvement in prohibited schemes.   
The Central Bank has made it clear that participating in pyramid schemes is a punishable offense, urging the public to refrain from involvement.   
It has requested the Attorney General to consider initiating criminal proceedings under Section 83C of the Banking Act.   

The State Minister said that the government’s firm stance against pyramid schemes aims to protect citizens from financial exploitation and maintain the integrity of the country’s financial system.   

Meanwhile, ministry sources said that a large number of Sri Lankans have been victims of online scam by MTFE that recently ceased its operation after siphoning off billion of rupees from Sri Lankan investors using cryptocurrency.   

MTFE was a Canada and Dubai-based organization involved in the online and virtual trading of dollars, shares, and cryptocurrencies. The app gained popularity in several countries across Africa and Asia.   

Meanwhile, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), in which the MTFE was registered, advised those who have been a victim of fraud, to immediately contact their financial institution, local police, and the Canadian Anti-Fraud Centre.  FINTRAC is an administrative financial intelligence unit and has no investigative authority, the FINTRAC said.