The Jakarta Post, Jakarta | Tue, 04/19/2011 11:10 PM

http://www.thejakartapost.com/news/2011/04/19/money-laundering-probe-starts-citibank.html

Officials launched a money laundering investigation at Citibank on Monday, amid allegations that several public officials had accounts with implausibly large balances at the bank.

The investigation would also follow the trail of funds related to the alleged embezzlement perpetrated by Inong Malinda, a high-value client manager at Citibank, Financial Transaction Reports and Analysis Centre (PPATK) chairman Yunus Husein said late on Friday.

“The watchdog wants to verify indications that public officials are laundering their money at the bank. That’s why, as of Monday, we will deploy our investigators to look into the bank’s accounts,” he said.

Yunus said the PPATK would also verify Citibank’s compliance with the Money Laundering Law, including the exercise of due diligence on “politically exposed” customers such as public officials, who were thought to have a greater potential to engage in money laundering.

The investigation follows in the wake of allegations that Malinda embezzled at least Rp 17 billion (US$2 million) from Citibank customers and laundered the proceeds through material purchases and an investment company.

The PPATK found indications that public officials were among Malinda’s clients in Citibank’s Citigold program, which requires customers to have a balance of at least Rp 500 million.

“There are indications that there was a public official who had at least Rp 2 billion at Citibank. We should be suspicious about the source of his money,” said a source at PPATK who declined to be named.

Under existing regulations, banks and financial institutions are required to tell the PPATK about suspicious transactions worth more than Rp 500 million, particularly those related to the accounts of public officials and their families.

Ministers and legislators typically have a monthly take-home pay of around Rp 35 million, while the highest military and police generals as well as some echelon I civil servants earn around 15 million.

Top civil servants at the tax and customs offices earn more than Rp 25 million a month.

Indonesia was rated 110th by Transparency International’s 2010 Corruption Perceptions Index, making it one of the world’s most corrupt nations, well behind Thailand, Malaysia and Singapore.

Legislators and analysts have called on the PPATK and the central bank to not ignore money laundering allegations involving the accounts public officials at Citibank or any other lender.

On the PPATK’s investigation, Citibank spokesperson Ditta Amahorseya said on Monday the bank would fully cooperate with related agencies, including the PPATK, to probe the embezzlement allegations.

Citibank has recently been plagued with other problem. A bank credit card client, Irzen Octa, died while discussing his account balance with three debt collectors employed by the bank on March 29 at Citibank’s branch on Jl. Gatot Subroto, South Jakarta.

OC Kaligis, the lawyer of Octa’s family, said on Monday he demanded that the police authorize a second autopsy for Octa after the first examination was mired in controversy.

Kaligis said there were two contradictory reports on Octa’ autopsy at Cipto Mangunkusumo Hospital that were released almost simultaneously.

“We have consulted on the case with numerous physicians, all of whom have said that there was no way to have two autopsy reports released at the same time with two contradictory results.”

Ditta said previously Citibank’s internal investigation had found no indications that Octa was physically harmed at the bank’s offices.