Scam Trail

November 2, 2006 (LBO) – Authorities who are probing the Seagullsoftware Ponzi scam have found that the firm had accounts in at least two commercial banks, while its participants say cheques have cleared through yet another bank. Seagullsoftware ran a pyramid scam variant, which masqueraded as a business process outsourcing company.

Banking sources say about 113 million rupees have officially passed through bank accounts discovered so far, but victims believe a much larger amount was scammed.

Officials also suspect that cash may have been hand-carried through the airport as Sri Lankan rupees, because Sri Lanka currency has a demand in South India.

Nations Trust Bank (NTB), where Seagull members were asked to open accounts had first alerted authorities after the activities of the firm intensified to unusual proportions.

Investigators also learnt that the two scam operators, who came from India, had first remitted money to the local branch of ICICI Bank to open an account.

Regulators usually advise banks to follow the ‘know your customer’ principle in order to keep criminal activities out of the banking system, but critics say Sri Lanka seems now to have become a hot destination for firms engaging in intern