The Onmax DT scam and Sri Lanka’s struggle against pyramid schemes - EDITORIAL

In recent years, Sri Lanka has witnessed an alarming surge in the proliferation of pyramid schemes that prey on the innocent public’s desire for quick wealth. The Onmax DT scam, which came to light not too long ago, has shed light on the magnitude of this issue and exposed the vulnerability of countless Sri Lankans to fraudulent financial schemes. This scheme, in particular, has drawn attention due to its audacity, with its board members allegedly amassing millions of rupees through illegal pyramid transactions.

The Colombo Chief Magistrate Prasanna Alwis on Monday issued orders to prohibit the sale or transfer of properties worth over Rs. 630 million belonging to one of the accused, Sampath Sandaruwan. This move came in response to the discovery that the suspect had transferred ownership of eight properties to his wife and 12 to a friend on a single day.

Furthermore, the Central Bank of Sri Lanka (CBSL) has taken action, requesting the Attorney General to file criminal cases against three prohibited pyramid schemes, including Onmax DT. This move aligns with Section 83C of the Banking Act, which aims to safeguard the financial interests of the public and curtail fraudulent financial activities. The CBSL’s determination to take legal action against these schemes and their operators is a commendable step toward holding those responsible accountable for their actions.

The Onmax DT scam is not an isolated incident; rather, it is a reflection of a broader issue that has plagued Sri Lanka for years. The legacy of pyramid schemes in the country dates back to notorious instances like Goldquest, which defrauded thousands of Sri Lankans in the early 2000s. These schemes often masquerade as legitimate businesses, luring individuals with promises of substantial returns on their investments. Once entrapped, victims find themselves embroiled in a complex web of deceit, unable to recoup their investments.

What makes pyramid schemes particularly insidious is their reliance on recruitment and the exploitation of social networks. They prey on trust and familiarity, often targeting vulnerable communities with the false promise of financial security. This modus operandi not only damages individuals’ financial well-being but also erodes the social fabric of communities as relationships are strained or shattered by the schemes’ inevitable collapse.

It is concerning to note that despite the lessons learned from past pyramid schemes, new iterations continue to emerge, finding fresh victims to exploit. The lure of quick wealth remains a potent temptation, especially in a country where economic disparities persist, and the pursuit of financial stability is a constant struggle for many.
The revelations surrounding Onmax DT and the actions taken by the authorities should serve as a clarion call for greater vigilance and awareness among the public. Education plays a pivotal role in safeguarding individuals from falling prey to such scams. Initiatives that promote financial literacy and raise awareness about the risks associated with pyramid schemes are crucial in preventing future victimization.

In addition to education, regulatory bodies must exercise greater oversight and enforcement to curb the growth of these schemes. The CBSL’s efforts to take legal action against pyramid schemes are commendable, but they should be part of a sustained and coordinated effort across multiple government agencies. This approach will not only deter potential scammers but also send a clear message that fraudulent financial activities will not be tolerated.
Furthermore, the media plays a pivotal role in exposing these scams and educating the public about their dangers. Investigative journalism can uncover the inner workings of pyramid schemes, providing invaluable information to potential victims and law enforcement agencies alike. It is essential for media outlets to continue their vigilance in reporting on financial fraud and scams.

The Onmax DT scam serves as a stark reminder of the persistent threat of pyramid schemes in Sri Lanka. The financial and emotional toll on victims is immeasurable, and the damage to trust within communities is equally devastating. To combat this menace, a multi-pronged approach is necessary, encompassing education, regulation, and media scrutiny. Sri Lanka must stand united in its efforts to protect its citizens from falling victim to the allure of quick riches, ensuring that the innocent public is shielded from the clutches of pyramid schemes.