The former Army commander is already in military custody facing charges of conspiracy against the government.

The Criminal Investigations Department (CID) began investigating after 527,000 dollars in cash were found in the bank locker of a close relative of Fonseka last week, the Sunday Times in Colombo reported.

Sri Lankan law limits the possession of US bank notes to 2,000 dollars without government permission, it said.

The report said the CID sought the help of Interpol headquarters in France to try to determine the source of the currency.

Detectives were also interviewing officials of the Central Bank and local banks, the news report said.

The money was found in one of safety deposit boxes under the name of Asoka Tillekeratne, whose son Danuna is married to a daughter of Fonseka, it said.

Detectives said Danuna Tillekeratne is wanted in connection with alleged fraudulent activity in supplying military items to the Army, and is evading arrest. They were also investigating reports that he had fled Sri Lanka under a false name, the paper said.

Fonseka was the army commander for four years and led it to the final military victory over the separatist Liberation Tigers of Tamil Eelam in May 2009.