ASEAN Beat

Indonesian Money Laundering Case Harks Back To Asian Financial Crisis

Recent Features

ASEAN Beat | Society | Southeast Asia

Indonesian Money Laundering Case Harks Back To Asian Financial Crisis

In Indonesia, money laundering is hard to prosecute. But in the case against disgraced tax official Rafael Alun Trisambodo, prosecutors have seemingly found an open and shut case.

Indonesian Money Laundering Case Harks Back To Asian Financial Crisis
Credit: Depositphotos

Indonesia is pressing ahead with charges against disgraced tax official Rafael Alun Trisambodo in a case that is shaping up to be a veritable romp through Indonesia’s legal system.

Prosecutors from the Corruption Eradication Commission (KPK) filed an indictment against Trisambodo last month, accusing the mid-level official of laundering some $6 million in illegal funds and accepting an eye-watering $1 million in “gifts” (known as gratification) while he worked for Indonesia’s tax office. If convicted, he could face up to 20 years in prison.

Trisambodo’s astonishing fall from grace began in February last year and was actually not of his own doing in the first instance.

His downfall came as the result of a 57-second viral video that showed his son, 21-year-old Mario Dandy Satriyo, kicking, punching, and stamping on the head of a 17-year-old teenager, who was allegedly the ex-boyfriend of Satriyo’s 15-year-old girlfriend.

The gruesome attack ended with the teenager being hospitalized in a coma, but the fallout for Trisambodo’s family continued. The viral video led internet sleuths to Satriyo’s social media pages, which showed lavish displays of wealth that seemed at odds with his father’s modest employment at the tax office.

As the uproar grew, Trisambodo was suspended, and later sacked, while an investigation into his finances took place, leading to his indictment and trial, which began on August 30.

A money laundering charge in Indonesia is always exciting, not least because it has fascinating roots that date back to the 1997 Asian financial crisis.

The crisis, which began in Thailand in July 1997 after the Thai government unwisely decided to float the baht, spread across the region as investors abandoned Asian currencies, causing the Indonesian rupiah to depreciate from July 1997, losing 30 percent of its value by January the following year.

To try and stabilize the country, Indonesia signed an arrangement for $10 billion from the International Monetary Fund (IMF) in November 1997 and another $1.4 billion in July 1998 – but the money came with an ongoing series of stipulations.

Just one of these stipulations was that Indonesia would draft and enact robust financial legislation which had previously been unknown to its legal system, particularly in reference to transparency in banking law – a stipulation from which Indonesia’s money laundering legislation was born in 2002, along with the creation of the Financial Transaction Reports and Analysis Centre (PPTAK), a government agency responsible for financial intelligence that was also involved in investigating Trisambodo’s case.

Yet despite having money laundering laws on the books, Indonesian prosecutors have often been hesitant to charge individuals as such because money laundering is a laborious crime to prosecute successfully.

Unlike other crimes, money laundering requires two illegal acts to have taken place, or something known as a “predicate crime” to have occurred before the following crime of money laundering.

In simple terms, money needs to be illegal (“dirty”) before it can be laundered (“clean”).

An example of this series of crimes would be money sourced from illegal gambling which is then laundered through a legal business to hide its “dirty” provenance.

In such a scenario, prosecutors have to prove not one but two crimes. First, the illegal gambling, with all that it entails, and then the money laundering – requiring twice the evidence, witnesses, documents, and labor involved than if only one crime had been committed.

They then also have to prove a plausible link between the two crimes.

As such, prosecutors often only prosecute the predicate crime and leave the money laundering charges to the side. When this involves officials such as Trisambodo, they are often prosecuted solely under corruption legislation, rather than corruption as a predicate crime followed by money laundering when they try to hide their illicit assets.

This makes the Trisambodo saga all the more enticing to watch, and implies that there may have been a wealth of evidence for the prosecution to feast on in order for the charges to be brought in the first place.

In Trisambodo’s case, the predicate crime appears to be gratification, which is a charge under the umbrella of Indonesia’s corruption law for accepting “gifts” (sometimes referred to as “bribes” in English although bribery is a separate crime in Indonesia), which he then allegedly tried to hide by laundering the illicit funds through different bank accounts, family businesses, and using a range of different currencies.

As by the very nature of money laundering, this is a complex case, and it will be interesting to watch its progression throughout the trial, which is not the only one that this famous family has faced.

On September 7, Trisambodo’s son, Satriyo, was sentenced to 12 years in prison for the aggravated assault of the teenager, the maximum punishment under Article 335 of the Criminal Code in line with the prosecution’s demands.

The Indonesian legal system has thrown the book at Satriyo, and it seems as if it is getting ready to do the same to Trisambodo.