Another member of former Citibank executive Inong Malinda Dee's family has been named a suspect in the embezzlement of Citibank client funds.
Ismail, the husband of Malinda's sister Fiska, was detained on Friday shortly he arrived at National Police Headquarters to visit his wife, who was arrested on Thursday.
"Both of them allegedly received around Rp 9 billion ($1.1 million) from Malinda,” said Brig. Gen. Arief Sulistyanto, the police’s director of special crimes.
“They were paid by Malinda, who borrowed their accounts to deposit laundered money of about Rp 2 million to Rp 5 million per month.”
On Thursday, a police source involved in the investigation identified Fiska as a suspect.
According to the source, Fiska recieved Rp 2 billion out of the total of Rp 20 billion in funds allegedly embezzled by Malinda from three premium Citibank clients.
“The remaining Rp 7 billion came from the accounts of five other victims,” the source said.
“However, those five customers in question didn’t file a police report. Maybe they’ve already been compensated by Citibank.” The source said that Fiska had been arrested at her office on Thursday.
Fiska and Ismail could be charged with money laundering, which carries a maximum prison sentence of five years and fines of up to Rp 15 billion.
Ismail's arrest comes two days after police arrested Andhika Gumilang, a young movie actor believed to be Malinda’s husband, for receiving at least Rp 311 million in stolen funds.
Hot Info
Saturday, April 30, 2011
BI Freeze on Banks’ Premium Business
The central bank has ordered 23 banks to stop signing up customers for high-end premium accounts for at least a month amid a probe into an embezzlement case at Citibank Indonesia’s wealth management unit, one of its executives said on Friday.
“This is an effort from Bank Indonesia and the banking sector to increase the quality of service and protection for customers,” said Bank Indonesia deputy governor Halim Alamsyah, who is responsible for banking supervision.
The move, which is due to come into effect on Monday, could prove a short-term setback to a buoyant private banking industry in Southeast Asia’s largest economy.
The move was the latest in a series of steps taken by BI as the police probed the case of a Citibank premium banking relationship manager who allegedly embezzled Rp 20 billion ($2.3 million) from the accounts of clients she handled.
Citibank, one of the leading onshore wealth managers in Indonesia along with Swiss banks UBS and Credit Suisse, said it had uncovered suspicious transactions in its Indonesian operations but would not specify the size of the loss.
“Bank Indonesia is actually trying to conduct a comprehensive audit on the banking industry. At the close of the one-month suspension period, Bank Indonesia will be able to sort out which banks need to improve their risk management and their standard operating procedure and which banks do not,” said Juniman, an economist at Bank Internasional Indonesia.
Foreign banks such as Citi, HSBC, Standard Chartered and DBS Bank, which do not have many local branches and have limited networks, would suffer more of an impact from BI’s decision than local banks, Juniman said.
Halim said the banks could still serve their existing customers as normal, though they have also been asked to improve their operating procedures and internal supervision.
Foreign banks have been trying to grow rapidly in Indonesia, which has a small but wealthy elite and relatively low levels of bank usage.
However, banking sources said much of the growing wealth from Indonesia’s millionaires is actually managed offshore, in Singapore.
“Of course, Bank Indonesia’s ruling, putting a freeze on all wealth management acquisition activities for a month, will slow down the momentum in this quarter, but in the long-term sense, business is doing well in Indonesia,” Bloomberg quoted Piyush Gupta, chief executive of Singapore’s DBS, as saying.
The suspension is the latest run-in with regulators in Asia for Citi, which is trying to expand its business in booming emerging markets.
Police say the case revolves around the money siphoned from at least three Citi accounts. They have taken into custody Inong Malinda Dee, a 47-year-old former wealth manager at Citi.
The industry-wide suspension applies to priority or premium customers, who may have savings of more than $50,000, and high net worth individuals who typically invest more than $1 million.
“This is an effort from Bank Indonesia and the banking sector to increase the quality of service and protection for customers,” said Bank Indonesia deputy governor Halim Alamsyah, who is responsible for banking supervision.
The move, which is due to come into effect on Monday, could prove a short-term setback to a buoyant private banking industry in Southeast Asia’s largest economy.
The move was the latest in a series of steps taken by BI as the police probed the case of a Citibank premium banking relationship manager who allegedly embezzled Rp 20 billion ($2.3 million) from the accounts of clients she handled.
Citibank, one of the leading onshore wealth managers in Indonesia along with Swiss banks UBS and Credit Suisse, said it had uncovered suspicious transactions in its Indonesian operations but would not specify the size of the loss.
“Bank Indonesia is actually trying to conduct a comprehensive audit on the banking industry. At the close of the one-month suspension period, Bank Indonesia will be able to sort out which banks need to improve their risk management and their standard operating procedure and which banks do not,” said Juniman, an economist at Bank Internasional Indonesia.
Foreign banks such as Citi, HSBC, Standard Chartered and DBS Bank, which do not have many local branches and have limited networks, would suffer more of an impact from BI’s decision than local banks, Juniman said.
Halim said the banks could still serve their existing customers as normal, though they have also been asked to improve their operating procedures and internal supervision.
Foreign banks have been trying to grow rapidly in Indonesia, which has a small but wealthy elite and relatively low levels of bank usage.
However, banking sources said much of the growing wealth from Indonesia’s millionaires is actually managed offshore, in Singapore.
“Of course, Bank Indonesia’s ruling, putting a freeze on all wealth management acquisition activities for a month, will slow down the momentum in this quarter, but in the long-term sense, business is doing well in Indonesia,” Bloomberg quoted Piyush Gupta, chief executive of Singapore’s DBS, as saying.
The suspension is the latest run-in with regulators in Asia for Citi, which is trying to expand its business in booming emerging markets.
Police say the case revolves around the money siphoned from at least three Citi accounts. They have taken into custody Inong Malinda Dee, a 47-year-old former wealth manager at Citi.
The industry-wide suspension applies to priority or premium customers, who may have savings of more than $50,000, and high net worth individuals who typically invest more than $1 million.
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