News - Matugama swindle: ‘Executive director’ remanded

A man who claimed to be an ‘executive director’ of a non-existing financial institution, which swindled money from many residents around Matugama through the promise of an attractive interest rate on their investments, was remanded until July 20 by Matugama Magistrate Indika Kalingawansa on Thursday.

The suspect Malwatta Jayatilake is currently charged with 9 cases of fraud, with the sum involved being Rs. 7.8 million. Vipula Kularatne, the ‘chairman’ of the financial institution, was taken into custody last year by the Wattala Police. There was no given name for the ‘financial institution’ as it was claimed the money was being mainly invested in the stock market and in the money market.

“Malwatta and Kularatne convinced prominent businessmen, doctors and lawyers to invest in their scheme by falsely claiming to invest their clients’ money in the stock market and the money market,” OIC of the CID in Matugama Sub-Inspector Parakrama Gunaratne told The Sunday Times.

At the beginning, the ‘financial institution’ offered its clients a monthly interest rate of 8 percent. Then, with the intention of attracting more people into the scheme, it offered a weekly interest rate of 2 percent on the clients’ investments. The interest rate later offered rose to as high as 3.5 percent per two days,” he said.

“After the collapse of the ‘financial institution’, Jayatilake went into hiding. During the past 1 ½ years, he was said to have been hiding in Sigiriya, Anuradhapura and Kirindiwela, ultimately ending up in Pugoda, where we found him on the evening of Poson Poya,” he said.

Among those swindled were Mr. Deepthi Gamage who invested Rs. 2.5 million and Mr. Ajith Kumara who invested Rs. 1 million, he said.

“I have known both Malwatta and Kularatne for sometime before I invested in their venture in November at the rate of 8 percent. I gave Rs. 2.5 million to Malwatta and Rs. 4.5 million to Kularatne. They promised me a higher interest rate of 14% if I increased my investments,” Mr. Gamage told The Sunday Times.

Kularatne had falsely informed his clients that he was a lawyer, and used false seals on documents to support his claim. “Malwatta and Kularatne approached bankers who held high executive positions, doctors and businessmen to invest their money with them. They also approached residents who held respected positions to ultimately entice them to invest with them,” Mr. Gamage said.

“I invested in Malwatta’s institution in November 2004, after being continuously canvassed since 2003. I knew him for sometime before I invested in his venture,” Ajith Kumara told The Sunday Times.

“I went on a trip with my family in December and before I went, I met Malwatta and deposited more money in his venture. When I returned, I was told that all my investments had disappeared and nothing was left,” Mr. Kumara said.

“Malwatta had already fled the area at this time. Only Kularatne was left of the ‘board of directors’. His clients clamoured demanding their money back. After the 2004 tsunami, Kularatne also disappeared,” he said.

“There are many residents around Matugama who didn’t receive any documents to prove they had invested in the venture. I was one of the few who received a cheque for my investments. Those who do not have proper documents are left without the option of filing charges against these men,” he said.

An extensive investigation into this case is launched under the supervision of the SSP Kalutara Police Ravi Wijeygunawardane, ASP Matugama Priyalal Dassanayake. SI Gunaratne, SI Perera, Sergeant Neil Priyantha and Sergeant Sunethra are in the investigation team.