Two arrested for $2.3m graft case
Evi Mariani, Jakarta
A businessman and a local bank employee were arrested over the weekend by the Jakarta Police over an alleged fraud involving a letter of credit (L/C) worth US$2.3 million following a complaint filed by Citibank, police sources revealed on Monday.
The head of corporate affairs at Citibank's parent company, Citigroup Indonesia, Ditta Amarhoseya, confirmed the alleged fraud, saying that Citibank filed the complaint on April 29.
"Yes, we have uncovered an L/C fraud totaling $2.3 million, but right now, as the case is still under investigation, I cannot give you any further details," she told The Jakarta Post by phone.
Police sources said that businessman Suparman Atmaja and bank employee Sutrisno had violating Criminal Code Articles 263 on forgery and 378 on embezzlement.
The alleged swindlers are said to have proposed the L/C for the international trading of 40,000 metric tons of coal. It is alleged that the documents submitted by the swindlers when proposing the L/C were counterfeit ones.
An L/C is an instrument commonly used in international trade to provide a guarantee that funds are available to pay for goods being sent from abroad. It is necessary that the L/C be issued by a reputable bank.
One of the detained suspects is the director of the company proposing the L/C while the other is an employee with a local bank, police sources said.
When reporters tried to confirm the arrest to with the chief of the Jakarta Police's special crimes unit, Sr. Comr. Edmon Ilyas, he only said that he would disclose the details of the case later as it was still under police investigation.
The counterfeiting of documents for L/C proposals is a relatively common method of swindling money from banks. A major criminal case currently being investigated by the National Police concerns a Rp 1.7 trillion fraud involving officials of state bank BNI.
Police investigators usually charge suspected swindlers under Law No. 10/1998 on banking and Law No. 25/2003 on money laundering, besides charging them with the relevant offenses under the Criminal Code.