JAKARTA (Reuters) - An Indonesian court convicted on Wednesday a former relationship manager with Citibank of money laundering in a case involving Ferraris bought with ill-gotten cash that powered the lifestyles of a glamour-hungry clique.
A district court in South Jakarta sentenced Inong Malinda Dee, 49, to eight years in prison and a 10 billion rupiah fine in a measure of the seriousness of a crackdown on endemic corruption in Southeast Asia’s largest economy.
The case shook up Indonesia’s investment banking industry and prompted regulators to ban the bank from adding new clients to its wealth management business for a year from last May.
Dee ordered 117 transfers each worth up to 2 billion rupiah ($223,000) from her Citigold clients’ accounts to her or acquaintances between 2007 and 2011, prosecutors said during her trial.
The money was spent on cars by Ferrari, Porsche, Mercedes and Hummer as well on as apartments and houses, prosecutors said. The court on Wednesday ordered two Ferraris, one Hummer and a Toyota 4x4 to be returned to Citibank as well as 1.6 billion Indonesian rupiah ($175,100) in cash.
“The defendant’s crime ran contrary to the government’s program of eradicating money laundering, which is a law enforcement priority,” said Judge Kusno in a prepared verdict statement read in court.
Dee, who wore a black chiffon head scarf and pink stilettos in court, appeared tearful as she was driven away from a packed courtroom to begin her sentence.
Her case has caused a stir in a country that is creating millionaires faster than any other Asian nation, according to Julius Baer, and she has drawn media attention because of her glamorous lifestyle.
Citi, the third-largest U.S. bank by assets, ordered an internal investigation after one of its wealthy clients noticed unauthorized transfers and reported them. Dee was arrested by police last March.
The case led the central bank to launch an investigation into banks’ risk management systems and suspend some of the privileges that relationship managers can give wealthy clients, in a signal authorities wanted to get tough on banking fraud.
“We have worked closely with our customers to compensate them for the losses in their accounts caused by the former relationship managers’ unauthorized transactions,” said Citibank in Jakarta in a statement welcoming the verdict.
“We have further strengthened our internal controls to protect our customers against fraudulent activities,” the bank said.
($1 = 9137.5 Indonesian rupiah)
Reporting by Olivia Rondonuwu; Editing by Matthew Bigg and Ed Lane