By: John Berthelsen

Billions of US dollars belonging to Indonesian taxpayers have allegedly been spirited out of Indonesia and into bank accounts in Singapore, Lebanon, Russia, Cyprus, the UK and Bermuda by some of the most powerful financial figures in Jakarta with the help of an international cabal of money launderers, according to a lawsuit filed in the Supreme Court of Mauritius on Sept. 29.

Six plaintiffs led by the Mauritius-based closed-end investment company, Weston International Capital Ltd are seeking US$410 million from the Indonesian Deposit Insurance Corporation (LPS) and 12 other J Trust and LPS associated defendants that Weston claims it was defrauded out of three years ago through the sham sale of Indonesia’s Bank Mutiara to a then-unknown Japanese financial concern, J Trust, along with various money laundering, bribery and theft charges.

Weston has chased the money in court cases from Mauritius to Singapore to Switzerland and now to Cyprus and Thailand and claims through a spokesman that it is either nearing collection on monies owed or in the alternative moving for the bankruptcy, liquidation and collapse of J Trust Co. Ltd, J Trust Asia Pte, PT J Trust Investments Indonesia, Group Lease PCL and the Indonesian Deposit Insurance Corporation (LPS) and their shareholders.

Indonesia’s notoriously corrupt courts have traditionally ignored a long list of international creditors attempting to collect in any manner on international legal judgments against Indonesian corporate deadbeats.  However a Weston spokesman contends that “it is time for either the LPS to settle these debts and self-report these charges to global regulators or for the Indonesian banking system to face further intense global anti-money laundering scrutiny and embargos.”

Saga of Bank Century

The Weston lawsuit revolves around the long-running takeover of the remains of a failing Indonesian financial institution previously named Bank Century, which nearly capsized in 2008 during the global financial crisis.

According to a series of Asia Sentinel stories, Indonesian Deposit Insurance Corporation (LPS) officials reportedly were ordered to pour US$830 million at then-prevailing exchange rates into the bank from 2008 to 2013. These capital injections were intended to conceal the fact that the bank’s former owner, Robert Tantular, was allowed by the Indonesian government to steal more than US$500 million of the bailout funds and launder them back out of Indonesia to Singapore, Cyprus, Switzerland, Russia, the USA and Lebanon through the likes of Standard Chartered Bank Singapore, Wells Fargo Bank N.A., Federal Bank of Lebanon and FBME Bank.

The attempt to prop up the bank in 2008 and 2009 nearly brought down the entire Indonesian financial system and led to the ouster on what are widely regarded as trumped-up charges of Sri Mulyani Indrawati, the internationally-respected finance minister in 2016, who quit and joined the World Bank as its managing director. Sri Mulyani’s return as finance minister has led to little progress in correcting the Indonesian banking system’s anti-money laundering concealment program.

LPS Takes Over Bank Century

In 2008, the sinking Bank Century was expropriated by the Indonesian Deposit Insurance Corporation, a quasi-government agency. The bank was renamed Bank Mutiara and sold to J Trust, a Tokyo-based consumer finance company partly owned by and advised by the US activist hedge fund Taiyo Pacific LLP, the California Public Employee Retirement System (CalPERS), Invesco Capital and WL Ross & Co, headed by Wilbur Ross, the current Secretary of Commerce. As Asia Sentinel has reported, J Trust appears to have illicitly paid just US$28.5 million instead of the publicly claimed US$368 million to acquire 99.996 percent of Bank Mutiara, which was later renamed Bank JTrust.

There is little about the Japanese parent, J Trust Co. Ltd, that inspires confidence. Its CEO, Nobuyoshi Fujisawa, was president of several units of Livedoor, a Japanese internet service provider that went belly-up in a 2006 Ponzi scheme amid charges of market manipulation and securities fraud. J Trust is also connected closely to Takefuji Co. Ltd., another notorious Japanese US$5.2 billion pyramid fraud and bankruptcy that ended in its demise in 2010.

It is now affiliated with and announced it intends to take over Group Lease PLC, a Bangkok-based hire purchase lender whose share price has collapsed and whose shares were recently suspended from trading by the Thailand Securities and Exchange Commission and the Stock Exchange of Thailand (SET) because of fraud, corruption and money laundering charges.

Group Lease’s now-departed Chairman and CEO, Mitsuji Konoshita, has been charged by Thai authorities with fraud, theft, statutory audit fraud and money laundering. He has left Thailand ahead of the charges.

J Trust Co.’s stock ownership appears to be intertwined in a maze of cross shareholdings with APF Financial, Showa Holdings Ltd, Wedge Holdings Co., Ltd, Group Lease PCL, PT Bank JTrust Indonesia TBK in addition to Group Lease Holdings Pte Ltd (Singapore), Taiyo Pacific LLP, CalPERS and Invesco. 

Prominent Banker Accused

A leading defendant in the Weston lawsuit is Kartika Wirjoatmodjo, currently president director of PT Bank Mandiri TBK, Indonesia’s biggest bank, which is owned by the Indonesian government. Wirjoatmodjo is one of the country’s most prominent banking officials and is also the sitting chairman of the Indonesian Association of Banks.  In the lawsuit, he is referred to as “the primary architect, orchestrator and director of all of the fraudulent acts of concealment, money laundering and theft committed at Bank JTrust from 2014 until late 2015.”

Other Indonesian government officials named in the lawsuit include Sukoriyanto Saputro, Bank Mandiri’s former corporate secretary, Fauzi Ichsan, the current CEO and Commissioner of the Indonesian Deposit Insurance Corporation, Ahmad Fajar, an LPS appointed, international director and President Director of Bank JTrust Indonesia, now a Bank JTrust Commissioner, and Felix Istyono Hartadi Tiono, Bank JTrust’s chief Money Laundering Compliance Officer (MLCO) since 2014. 

Wirjoatmodjo headed the Indonesian Deposit Insurance Corporation, known under its Indonesian name Lembaga Penjamin Simpanan (LPS), from 2014 to 2015 before taking over as chief executive of Bank Mandiri. He was in charge of the LPS sale of Bank Mutiara to J Trust in 2014 under the explicit directions of the presidential office of Susilo Bambang Yudhoyono according to the suit. He is alleged to have ordered the Indonesian Financial Services Authority’s approval of J Trust Co. and Fujisawa as qualified buyers under “fit and proper test” requirements even though J Trust’s credentials to acquire a bank were considered dubious at best, much less Fujisawa’s.

Finally, several board members of PT Bank JTrust Indonesia TBK and four J Trust Co. and J Trust Asia executives are named in the Weston lawsuit as enjoined individuals, namely Nobuyoshi Fujisawa, Shigeyoshi Asano, Nobiru Adachi and Felix Istyono Hartadi Tiono, a globally registered MLCO.

Enter the Saabs

Among the most tarnished defendants named in the lawsuit are Fadi Michel Saab, Ayoub Farid Michel Saab and Michel Norbert Saab, all officers and owners of the notorious Tanzania-based FBME Bank, FBME Bank’s Cyprus branch, FBME Card Services Ltd. and the Federal Bank of Lebanon, purportedly long a bank of interest to global regulators. FBME Bank was in effect closed down by the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) earlier this year.

All of the Saabs are alleged to be the transferors and past recipients of hundreds of millions of dollars of laundered money including over US$400 million missing from the Saab Financial (Jersey/Bermuda) Ltd. offshore vehicles which have acted as the Saabs’ personal piggy bank.

It is alleged that over US$40 million has been paid by the Saabs to their legal advisers since 2014 to conceal their money laundering activities and primarily to US law firms that may face money laundering charges themselves.

The Saabs and Bank JTrust under the ownership of both Tantular and the LPS continued to launder money from 2006 to 2015, according to an explosive report authored by Peter Barrie-Brown, a UK money laundering and compliance expert. It was written for and secretly distributed only to the LPS, J Trust and Bank JTrust in mid-2014 and was concealed until 2016.

Authorities of the US Treasury Financial Crimes Enforcement Network (FinCEN) in effect shut down FBME Bank in April of this year after a three-year battle, citing massive acts of money laundering and aiding and abetting terrorist financing to the likes of Hezbollah and Syrian manufacturers of sarin gas. The Saabs recently lost their final fight before the US Appeals Court in Washington, DC to prevent FBME Banks final closure and liquidation after the government of Tanzania unexpectedly withdrew its support for the appeal on Oct. 3.