Two senior Indonesian bank officials have been handed down sentences of life and 16 years' imprisonment for their part in the US$184 million letter of credit (L/C) frauds that rocked state-owned Bank Negara Indonesia (BNI) last year (DC World News, 4 November 2003, 6 November 2003 & 20 November 2003).

A lifeterm is rare for this kind ofconviction in Indonesia and the defendants look likely to appeal theirsentences.

Jail and fines

The former head of the BNI's Kebayoran Baru branch's foreign customer service division, Edi Santoso, received a life sentence and was ordered to pay a fine of around US$100,000 or face an additional year in jail. The former head of the branch, Kusadi Yuwono, received a 16-year sentence and was ordered to pay a fine of around US$50,000 or face a further six months in jail.

Heavier sentence

The panel of three judges at the South Jakarta District Court said the two bank officials had "legitimately and convincingly" been proven guilty of swindling funds from BNI by issuing fake L/Cs during 2002 and 2003.

Santosa received the heavier sentence because he had issued most of the bogus L/Cs the panel said.

Defence rejected

During his trial, Yuwono argued that he had been tricked by Santoso and was unaware of the fraud.

The court rejected this defence and found that while Santoso was solely responsible for the release of 24 L/Cs, Santoso and Yuwono had jointly released 13 of the L/Cs.

Key conspirator

Santoso was nevertheless singled out as a key conspirator in the fraud.

"The deviation involving the L/Cs was included in a document that was made by the head of the foreign customer service division and the supervisor," the presiding judge said.

Appeal calls

The court found that funds were channelled through 37 L/Cs for supposed export transactions to the Gramarindo Group between December 2002 and July 2003. Prosecutors had argued that 41 fictitious L/Cs had been issued, including some to businesses in the Petindo Group.

Santoso says he is confused by the verdicts and now argues that the judges' ruling and the sentences have been influenced by external factors. The defendants' lawyers have said they would appeal the verdicts.

Absconded

The presiding judge said the actions of the former bank officials had undermined public confidence in the banking sector and resulted in the dismissal of all staff at the BNI branch's foreign customer service division.

Police have named 16 people as suspects in the BNI frauds and one of the chief suspects, Maria Pauliene Lumowa, has moved to Singapore, which has no extradition treaty with Indonesia, apparently in order to avoid prosecution.

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