Who Got Swindled at Citibank Indonesia?

The big question that Jakarta authorities appear to be dancing delicately around in the US$2.3 million Citibank fraud scandal that that has transfixed Indonesia over the past couple of weeks is who got defrauded.

National Police officers investigating Inong Malinda Dee, a curvaceous 47-year-old senior Citibank relationship manager who is accused of misappropriating her clients' money, have yet to offer any clue as to who among Dee's list of some 500 premium "Citigold" customers was defrauded.

There are growing suspicions in Jakarta that some of the swindled customers don't want their names made public because they might have to explain how they came by enough money to avail of ultra-premium private banking services normally reserved for the very wealthy.

"This is the parlor game of the moment," a Jakarta source told Asia Sentinel. "Trying to figure out who fell under the sway of the Dee."

"No one wants to admit to this," said an aide to Vice President Boediono. One senior politician just laughed. "This is all anyone is talking about," he said. "I doubt anyone will admit to losing money."

Only three victims have filed complaints with police, but even their names are not known. Dee's personal wealth, including premium luxury cars and a wide range of properties, might also give substance to allegations that she borrowed a lot more than the US$2 million from her customers' accounts.

One name that has surfaced is that of the head of internal affairs for the National Police, Inspector General Budi Gunawan, who denied he was one of her victims after being named in a Koran Tempo daily newspaper article as having filed a complaint with the police.

Intriguingly, Gunawan's name also surfaced in a Tempo Magazine article last June that listed a variety of police officials with wads of unexplained wealth. Gunawan was listed as the third richest among the bunch, with Rp4.68 billion (US$518,732.3967) in accounts as of Aug. 19, 2008. He was alleged to have opened another account with his son and deposited Rp29 billion and Rp25 billion respectively although the bank wasn't named. At the time, Gunawan indignantly said, "The report is completely not true."

National Police earlier this week officially denied that Gunawan or any other police officer had any money in Dee's keeping. "I can assure you that none of the victims is a police general. It's just a rumor, which I don't know came from where," the head of the National Police's special crimes unit, Brig. Gen. Arief Sulistyo, told reporters Wednesday.

The widespread supposition in Jakarta is that Gunawan, who was once very close to former President Megawati Sukarnoputri of the Indonesian Democratic Party of Struggle as her police aide, isn't the only official believed to have money stashed away in the Citi accounts.

These days its a head scarf and too many questions The year-old Tempo story, using information from the respected Corruption Eradication Commission (KPK), cited a raft of top police officials as having unexplained wealth. They included, in addition to Gunawan, Mathius Salempang, the East Kalimantan Provincial Police Chief; Sylvanus Yulian Wenas, chief of the Mobile Brigade Special Unit; Badrodin Haiti, Head of the Police Law Development Division; Susno Duadji, ex-Chief of the Investigation and Crime Unit, and Bambang Suparno, a lecturer at the Police Academy. All denied the Tempo story. Unknown persons who were believed to represent police officials attempted to buy up the entire monthly edition of the magazine, only to have editors order 30,000 reprints.

Of the batch named by Tempo, only the colorful Susno, once a candidate for National Police chief, came forward to say that a number of police officers had acquired wealth through soliciting bribes and other means. His attempt at whistle blowing was met by a prosecution for corruption. He was convicted on March 24 and sentenced to three-and-a-half years in prison. The sentence is being appealed.

"I wasn't surprised that there were attempts to retaliate against what I'm doing," Susno told the Jakarta Globe in an interview after his conviction. He said he was "framed" because he tried to clean up the police force.

"If it was police generals that Dee swindled this will all get very uncomfortable," a source in Jakarta told Asia Sentinel.

The three victims who have lodged complaints against Citi were all businessman, a police source told the Jakarta Globe: "One of them is Madurese. He is so rich he did not realize his money had been stolen by the suspect."

As a result of the scandal, Citibank has been suspended from recruiting new Citigold customers and become an object of widespread derision.

On Thursday, the bank was also told it could no longer issue credit cards in Indonesia because of an unrelated mess, the death of a customer inside a Citibank branch as he was undergoing a harsh grilling from the bank's debt collectors. That tragedy occurred on March 29, just five days after Dee was arrested.

Central bank governor Darmin Nasution told a House of Representatives commission Wednesday that the US bank had failed to implement a proper internal control system. The central bank said it summoned Citibank's country chief officer and related officials and imposed remedial steps.

The bank has apologized both for Dee's shenanigans and the death of its customer, a minor politician named Irzen Okta.

The two cases have become a political football in the House, with politicians playing the nationalist card to fulminate against international financial institutions, accusing Citibank of failing to protect its customers, an irony in a country which has seen a long trail of banks disappear because of fraud and mismanagement. After the Asian Financial Crisis of 1997-1998, domestic bankers stole more than US$13.5 billion from the Indonesian central bank's recapitalization lifeline to 48 ailing banks. Most of the money is believed to have been deposited in Singaporean banks, a haven for hot money from around the region.

Dee has been characterized in the country's press as a bombshell and former model who built up her considerable décolletage through plastic surgery and has a 22-year-old husband. She has been photographed demurely in a headscarf while in police custody recently and has volunteered through her lawyer, Halapancas Simanjutak, to give back any money that might accidentally have stuck to her fingers.

The money appears to have been enough to buy two luxury apartments, two Ferraris, a Mercedes-Benz and a Hummer and to take care of the boy-toy husband, who has been on a series of local television talk shows to deny any knowledge of misdeeds.

Citibank, facing a public relations nightmare, has said it is committed to recovering the money lost by its Citigold customers, while at the same time saying it does not order its debt collectors to throttle dead-beat clients. Two Citi employees and two contract debt collectors have been named suspects so far in the death of Irzen, who owed the bank some US$10,000 and whose widow has come forward to say the couple was harassed last year by debt collectors at their home.

"It is our commitment to protect the interest of our customers, including swiftly repaying all customers who suffered losses in the fraudulent transaction, fairly and timely," said Citi's Indonesia country corporate affairs head, Ditta Amahorseya, in a statement in response to Dee's embezzlement.

After the bank's contract employees were arrested in the Irzen case, Ditta issued a second statement saying the bank had a strict code of conduct with regards to debt collection. "As representatives of the bank, all our contract staff are required to adhere to [the code] during all interactions with customers," she said.