Category Archives: PPATK

50 officials suspected of money laundering

Esther Samboh, The Jakarta Post, Jakarta | Wed, 04/13/2011

Over 50 officials who are clients of alleged Citibank embezzler Inong Malinda, aka Melinda Dee, are suspected of being linked with the fraud case that may also indicate money laundering, Financial Transaction Reports and Analysis Centre (PPATK) officials say.

Chairman Yunus Husein said on Wednesday that the PPATK was studying money-laundering indications in 28 transaction reports from two insurance firms and eight banks, including unidentified state-owned, private and foreign-owned lenders.

“We have not figured out if the large amount of private banking funds came from money laundering … If we were to guess, using income statement analyses, or lifestyle and network analyses, we could jump to that conclusion. How come they have little income but the account shows huge amounts of money?” he said at a press briefing at the PPATK office in Jakarta, adding that there were several “former officials” who were clients of Malinda.

The National Police are currently investigating a case of alleged embezzlement of client’s funds and have taken into custody the 47-year-old former Citigold wealth manager, who, according to the PPATK, used four different identification cards in her alleged embezzlement operation.

When asked how many high-ranking officials were suspected of money laundering in the Citibank fraud case, PPATK supervisory and compliance director Subintoro said it “may be more than 50”.

“The modus operandi is rolling over funds into other funds. For instance, [Malinda] withdrew Rp 5 billion (US$580,000) from Customer A, which goes straight into her office. Later on, she covers the Rp 5 billion with Rp 10 billion withdrawn from Customer B. Then she will withdraw from another big customer. That goes on,” Subintoro said.

PPATK, Bank Indonesia (BI) and the police plan to cooperate in investigating the Citibank fraud case, which may be worth more than the initial Rp 16 billion, all of which belongs to Citibank’s first-class customers.

Yunus said that Malinda should definitely be charged with money laundering, as she “withdrew and shopped funds that were not hers but her customers’ without their permission”.

Article 4 of the Law on Money Laundering stipulates that charges of money laundering could carry a 20 year prison sentence and a Rp 10 billion fine.

Citibank's country corporate affairs chief Ditta Amahorseya said, in response to the PPATK findings, "The information is not true. All Citibank accounts have gone through the KYC (know your customer) process."

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Indonesia Corruption Watch Alleges Senior Police Officer Has $10 Million Bank Account

Jakarta Globe, Nivell Rayda. June 09, 2010

Danang Widoyoko, chairman of Indonesia Corruption Watch, has laid a complaint with the Corruption Eradication Commission linking a bank account containing Rp 95 billion ($10.3 million) to a senior officer from National Police headquarters.

The country’s most prominent antigraft watchdog officially lodged a complaint with the Corruption Eradication Commission on Wednesday linking a bank account containing Rp 95 billion ($10.3 million) to a senior officer from National Police headquarters.

Danang Widoyoko, chairman of Indonesia Corruption Watch, said there were indications of bribery and illegal gratuities linked to the account, allegedly belonging to a two-star police general identified as “BG.”

Danang brought along several documents to support the group’s claim. It is still not known whether the documents submitted include classified dossiers from the Financial Transaction Reports and Analysis Center (PPATK), which is able to monitor suspicious transactions at virtually all financial institutions in the country.

“We are disappointed that the National Police have refused to investigate how the officer was able to obtain such a vast wealth,” ICW deputy chairman Emerson Yuntho said in a text message to the Jakarta Globe.

“It shows that the police are not ready to reform.”

Earlier, National Police chief of detectives Comr. Gen. Ito Sumardi said the PPATK had forwarded documents linked to the suspicious account but claimed that no indications of any criminal activities had been discovered.

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Anti-graft Commission Examines Police Fat Accounts

Police Promise to Probe Officer’s Rp 95b Account

Jakarta Globe, May 02, 2010

Police have vowed to launch an investigation into one of their own after an antigraft watchdog claimed a senior officer had bank accounts containing more than Rp 95 billion ($10.55 million).

“We’ll probe the accounts to see if there’s any truth to the allegations,” Insp. Gen. Edward Aritonang, a spokesman for the National Police, said on Sunday. “If they prove true, then we won’t hesitate to conduct an internal inquiry or even charge the person in question.”

Despite the strong words, however, Aritonang said the police did not yet know who the watchdog, Indonesia Corruption Watch, was referring to.

ICW has alleged that two shady accounts belonging to a two-star police general currently serving at National Police headquarters contained a total of more than Rp 95 billion. The organization, however, will not divulge the general’s name before submitting its report to the presidentially appointed Judicial Mafia Eradication Task Force this week.

“From 2005 to 2008, this general received payments from individuals and private companies,” said Tama S Langkun, an ICW researcher. “We hope the task force can order the PPATK [ Financial Transaction Reports Analysis Center] to trace the transactions back to their sources.”

PPATK chairman Yunus Hussein is also a member of the task force.

“If the money was obtained legally, there should be no problem,” Tama said. “However, as a law enforcer, the general must disclose his wealth and be held responsible should the task force find indications of money laundering, gratuities or even bribes.”

Task force officials could not be reached for comment on Sunday.

Bambang Widodo Umar, a legal analyst at the University of Indonesia, criticized the National Police for its “soft stance” against corruption within the force.

“The PPATK automatically reports any suspicious transactions to the police, so you have to wonder why the police never picked up on this,” he said.

In 2005, the PPATK reported that 15 high-ranking officers had suspicious bank accounts with money that could be traced to illegal logging, counterfeit money and gambling cases being investigated by police.

The National Police, which was helmed at the time by Gen. (ret.) Sutanto, who is now head of the State Intelligence Agency (BIN), claimed “there is no evidence of money-laundering or bribery” linked to the accounts of the 15 officers. Nivell Rayda

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Police chief denies Rp 95b in high-ranking officer’s bank account

Yunus Husein: Anti-money laundering czar

Rendi A. Witular, The Jakarta Post, Jakarta | Mon, 04/26/2010 9:54 AM

Yunus Husein, chairman PPATK (JP/P.J. Leo)

Amid the widespread corruption permeating through almost all state institutions, few have survived unscathed in keeping vested interests and political meddling at bay.

But one such rare bird is the anti-money laundering watchdog, the Financial Transaction and Report Analysis Center (PPATK).

And it is thanks to its first chairman, Yunus Husein — who set up the institution from scratch in mid-2002 after the passing of the anti-money laundering law, that the institution boasts an exemplary track record in maintaining integrity among its officials.

Eight years on, Yunus’s hard work presents society with an unchallenged legacy, not only of a corruption-free institution but also a money-laundering detection system that has effectively spotted many suspicious transactions stemming from illegal practices.

Yunus’ days at the PPATK are now numbered as he has to relinquish his job in October this year after serving two terms. Each term spanned four years.

Captaining the PPATK is a mammoth task not only for Yunus but also for his successor given law enforcers and politicians’ penchant for tapping into the agency’s findings for their personal gain.

When PPATK spotted suspicious transactions last year involving low-ranking tax official Gayus Tambunan and high-ranking tax official Bahasyim Assifie, the police allegedly used the evidence to seek bribes from the suspects, instead of dragging them to justice.

Yunus once recalled how several lawmakers and case brokers had even colluded with the police to take advantage of PPATK highly classified findings to extort the suspects.

While the police are authorized to follow up and receive PPATK findings, few of those findings have actually found their way into a court of law, according to Yunus.

To force the police to seriously combat money laundering, Yunus once tried to apply pressure on them in mid-2005 by revealing the existence of suspicious bank savings owned by 15 mid- and high-ranking police officers worth more than Rp 1 trillion (US$109 million) in total.

Although the findings were reported to then police chief Gen. Sutanto, no investigation was ever initiated to solve the case and bring corrupt officers before the law.

Instead of expressing gratitude, the police threatened Yunus over his remarks on the findings.

“I’m not frustrated with law enforcers. What matter most is that I’ve done my part well,” said Yunus in a recent interview.

It takes courage for Yunus to confront recalcitrant law enforcers as death threats have not been uncommon.

Yunus’ own former deputy Comr. Gen. Susno Duadji reportedly threatened Yunus last year over PPATK’s decision to pass on suspicious transactions in his bank accounts to the Corruption Eradication Commission (KPK). Susno was the police chief detective at the time, and was being targeted by the KPK.

In a recorded meeting in mid-last year, Susno lashed at Yunus behind his back before the KPK leaders, saying the PPATK findings should be submitted first to the police, not to the KPK.

“Well, we are friends now. Pak Susno has even sought our assistance in the case involving law enforcers and Gayus,” said Yunus. Susno came to Yunus because of the latter’s role as a member of the Judicial Mafia Taskforce.

Since taking a role in the taskforce early this year, Yunus’ fight against corruption has witnessed a new twist as PPATK findings submitted to the police have never been more intensively investigated than now.

After the Gayus case, PPATK findings have also been increasingly sought by other ministries, especially the Finance Ministry, to detect corrupt officials.

“It’s good that people are now taking our work seriously,” said Yunus, who loves playing table tennis and badminton after office hours.

Yunus, born in Mataram, West Nusa Tenggara, on Dec. 29, 1956, started his career in a banking inspection position with the central bank between 1982 and 1985 and then joined its legal affairs team until 1999.

He was deputy to the central bank’s legal director between 2001 and 2002 before the then Coordinating Minister for Security and Political Affairs, Susilo Bambang Yudhoyono, proposed to then president Megawati Soekarnoputri that Yunus be the first PPATK chairman.

In 2006, President Yudhoyono reappointed Yunus for a second term until 2010 due to his proven integrity and independence.

Unconfirmed reports have circulated that Yunus might be one of the candidates that Yudhoyono will propose to lawmakers to fill the vacant KPK chairman job.

Yunus, who is known for his modest lifestyle, denied ever knowing about this proposal, or even dreaming of it.

“I don’t expect that… In life, I have no other intention than to work as well as possible wherever that is. That’s it,” he said.

Committee uncovers 12 loopholes in taxation

Aditya Suharmoko, The Jakarta Post | Fri, 04/16/2010 10:45 AM

The Taxation Oversight Committee has uncovered 12 loopholes in the taxation system that can be exploited by corrupt officials and taxpayers, chairman Anwar Suprijadi told legislators in a hearing Thursday.

The loopholes begin at the examination process where tax officials examine taxpayers tax returns. “Findings [of tax evasion] can be negotiated,” Anwar told the House of Representatives’ Commission XI overseeing financial affairs.

If taxpayers object to the findings, there is a second loophole where tax officials offer to weaken the findings before sending them to the Tax Tribunal.

The third loophole occurs at the Tax Tribunal where judges and officials make “confusing” objections to benefit taxpayers, he said.

Anwar added that the next three loopholes occur when examining preliminary evidence, making the evidence ready for prosecution and during the trial by tampering with evidence and witnesses.

The next three loopholes were the stakeholders themselves: taxpayers, tax officials and Tax Tribunal officials.

The remaining loopholes were the “tricks”, he said, in which the stakeholders could design tax evasion schemes through accounting procedures, tax facilities including tax restitution and tax regulations.

“Some of the loopholes have multiplier effects, which means that if we shut down one loophole, it can solve six to seven other loopholes,” Anwar said.

Tax officials have recently become the target of criticism following reports by the Financial Transactions Report and Analysis Center (PPATK) of Rp 28 billion (US$3.1 million) in the personal bank account of tax official Gayus Tambunan. Another tax official, Bahasyim Assifie, had Rp 64 billion.

Gayus was fired from the tax office, while Bahasyim may be temporarily suspended, Hekinus Manao, inspector general at the Finance Ministry, said.

Anwar, the former director general of customs and excise at the ministry, also pointed out six loopholes in the customs and excise office, covering service, surveillance, information and technology, customs facilities, objections and supervision.

The ministry has identified six customs and excise officials with suspicious accounts from a list of 26 names brought up by the PPATK, Hekinus said.

Anwar said the tax office had only eight investigators at the Directorate of Internal Compliance and Official Resource Transformation (KITSDA), compared to the 33,000 tax officials. “KITSDA may have to review the number of investigators they actually need,” he said.

Finance Minister Sri Mulyani Indrawati said her ministry planned to issue a regulation that would allow it to examine the financial reports of tax officials. The regulation is based on a 1986 presidential decree, which states that ministers have the authority to compare the finances of officials to their tax returns.

KPK receives PPATK report on suspicious transactions

Antara News, Monday, April 12, 2010 22:22 WIB

Jakarta (ANTARA News) - The Corruption Eradication Commission (KPK) has received a report from the Financial Transactions Analysis and Reporting Center (PPATK) regarding suspicious transactions involving some high ranking state officials.

"It is true. We have received such a report," KPK spokesman Johan Budi said in reply to newsmen here on Monday.

Johan said the report was received from PPATK chief Yunus Husein and it was about suspicious transactions involving parliament members, a cabinet minister and director general-level officials.

Yunus had presented the report to the law enforcement agencies including KPK.

Johan admitted he had received the report some time ago. He however declined to indicate when exactly the KPK had received the report. Neither was he prepared to elaborate on its contents.

Johan said the PPATK report was not the first of its kind the KPK had received. KPK and PPATK, he said, often cooperated with each other, including exchanging data on cases being investigated.

He said KPK was planning to conduct further investigations based on the PPATK report. "We are going to analyze it," he said without elaboration.

Johan said KPK would only move if there were indications acts of corruption had been committed in a case.

Uncovering corruption money

The Jakarta Post | Mon, 04/12/2010 10:12 AM

“The road to economic hell is paved with failed anticorruption campaigns”, Berlin-based Transparency International used to say in amplifying the devastating damage corruption could inflict on a nation’s economy.

Indonesia could also fall into such a dead end if the anticorruption campaign is not stepped up amid the mounting malfeasance within the government.

Fighting corruption was on the top of the campaign platform of President Susilo Bambang Yudhoyono in 2004 and again in last July’s presidential elections.

Yet the anticorruption efforts have not been as strong and concerted as expected because they lack crucial political and institutional support.

All the laws needed to make anti-graft reforms effective have been in place but their enforcement has been acutely devoid of leadership and political resolve.

The latest case in point is the persistently feeble enforcement of the 2002 Anti-Money Laundering (AML) Law because its implementing agency, the financial intelligence unit (PPATK), has no law-enforcement mandate.

The PPATK only collects, analyzes and investigates financial transactions suspected of money laundering, based on tips provided by financial institutions and other related agencies and then passes the information on to the National Police and the Attorney General’s Office.

However, it has been almost eight frustrating years for the PPATK because of the acute lack of cooperation on the part of law enforcement agencies to follow up the suspicious transactions it has reported.

The US$3.08 million money-laundering case involving junior tax auditor Gayus Tambunan, which has made headlines for the last two weeks and led to the uncovering of widespread judicial corruption involving the police, public prosecutors and judges, was based on information provided by PPATK.

But this high-profile case is only one of tens of thousands of suspicious transactions through banks which have been reported by the PPATK.

In a yet more shocking revelation, PPATK chief Yunus Husein said Tuesday that in March 2009 he had reported to the National Police chief several suspicious transactions in the bank accounts of a retired senior tax official, many times larger than Tambunan’s, but no follow-up measures had been taken.

The National Police defensively said reports from the PPATK were not sufficient for building a case because the predicate crimes from which the money was derived had to be established first.

But this is nonsense. In fact, the anti-money laundering law could be used as a powerful instrument to uncover corruption money because the burden of proof falls on the suspect or defendant, who must convincingly prove, with the support of necessary documents, that the money flowing into their bank accounts is legitimate or derived from legal means.

It is a 99.99 percent chance that unusually big money flows into the bank accounts of Indonesian officials are from corruption or ill-gotten money. What else could it be because the highest monthly salaries of civil servants in the country do not exceed Rp 65 million ($6,500).

We believe in the high credibility of the PPATK reports because its legal and financial experts file only those cases with strong indications of money laundering. Given the non-cooperative attitude-or even resistance-on the part of law-enforcing bodies, we support PPATK’s initiative to also submit its reports on suspicious transactions to the minister or chief of the internal control departments in ministries where those suspected of money laundering work.

PPATK’s reports on suspicious transactions through bank accounts of civil servants, especially those in positions prone to corruption, could even serve as an early-warning signal for the internal control departments of government offices.