Residents of Pannalgama, a village under the Damana Divisional Secretariat in Ampara, have fallen victim to a large-scale ponzi-style scam that has left nearly every household in debt. The fraudulent scheme, which began several months ago, has reportedly defrauded villagers of over Rs 2000 million before its masterminds fled the area, Ada.lk reported.
According to residents, the operation began innocently as a small incense stick (handunkuru) making venture named “Arunalu Pahansilu”, started in a village home. Within weeks, it evolved into a so-called “incense stick business,” attracting widespread participation from locals who were promised lucrative returns.
Under the scheme, participants were asked to invest Rs 50,000 and were given 1,000 boxes of incense sticks to package and return. In exchange, they were promised a payment of Rs 75,000. Encouraged by the initial payouts, the operation rapidly expanded, drawing in villagers not only from Pannalgama but also from nearby areas such as Thottama, Kumana, Bakmitiyawa, Higuranne, Thimbirigolla, Madawalalanda, Ekgaloya, Uhana, Koknahara, Siyambalanduwa, Wellawaya, and Monaragala.
As the scheme grew, organisers began demanding larger deposits—up to Rs 250,000—claiming investors would receive Rs 400,000 in return after packaging 6,000 boxes. Many villagers sold their paddy lands, pawned jewellery, and borrowed at high interest rates, some investing as much as Rs 1 million to Rs 4 million each.
However, when raw materials stopped arriving and payments were delayed, suspicion grew. A few managed to recover their money, but others were told to wait another month for the issue to be “resolved.”
A crisis meeting was held on 29 September at the Pannalgama temple, attended by victims and local political representatives. At the meeting, the main organisers — identified as Suranga Sandaruwan and Piumi Buddhini Jayatunga — promised to repay the investors within a month, claiming the delay was due to “production problems.”
But on 3 October, both Suranga and Piumi fled the village, leaving their infant child behind. Relatives later handed the child back to their parents.
The couple’s parents remain at the residence, now besieged by angry crowds. On 4 October, villagers gathered outside the house throughout the day, demanding their money back. Some women were seen weeping, cursing the fugitives who had deceived them.
Investigations revealed that receipts issued to investors were stamped “PAID,” suggesting that the money given to the organisers had been falsely recorded as already settled.
Unofficial sources estimate that the couple collected nearly Rs 2000 million through the scheme, which also drew in public servants, health workers, police officers, teachers, and small business owners. Complaints have been lodged with the Damana Police and the Fraud Investigation Unit of the Ampara Police Division.
Many villagers, especially women, are now in dire financial distress. Some had borrowed money at 10 percent interest, while others had secretly handed over their family savings without informing their husbands, leading to domestic disputes.
Pannalgama has effectively become a village in mourning, with residents unable to finance paddy cultivation or other agricultural work for the upcoming season.
Despite warnings from a few who recognised the scam early on, the promise of quick profits drew almost the entire community into the fraudulent scheme. (Courtesy: Ada.lk)
