SCAMS IN THE CITY

A Ger­man and his In­done­sian wife con­vinced an Aus­tralian and his In­done­sian wife to in­vest over US$700,000 in the ex­pan­sion of a re­sort in Bali. They then used the money to buy a house in New Zealand.

Indonesia Expat - - CONTENTS - By Ken­neth Ye­ung

Ger­man Ex­pat and In­done­sian Wife Jailed for Bali Re­sort Swin­dle

Ger­man na­tional Gor­don Gil­bert Hild (38) and his In­done­sian wife Is­mayanti have been jailed for swin­dling Rp.8.5 bil­lion (around US$640,000) out of an In­done­sian woman and her Aus­tralian hus­band over an in­vest­ment in a Bali re­sort.

Hild and Is­mayanti were tried and con­victed at South Jakarta District Court, rather than in Bali, as the case stems from a failed busi­ness part­ner­ship made in Jakarta.

On Fe­bru­ary 13, the court sen­tenced Is­mayanti to 2.5 years in jail. Hild’s ver­dict was due on the same day, but he was ap­par­ently too sick to show up. In­stead, he ap­peared on Fe­bru­ary 20 and was sen­tenced to three years. The cou­ple’s lawyer said the two are plan­ning to ap­peal.

Back in Au­gust of 2010, Hild and Is­mayanti opened the Ke­lapa Re­treat in Peku­tatan vil­lage, over­look­ing black sand beaches on the south­west coast of Bali. It seemed like a dream busi­ness in a per­fect lo­ca­tion. Lo­cated about 80 kilo­me­tres north­east of Ngu­rah Rai In­ter­na­tional Air­port, the ‘lux­ury bou­tique ho­tel’ ini­tially had just eight units and a restau­rant.

It was later ex­panded to 23 pri­vate vil­las and be­came a pop­u­lar re­sort, re­ceiv­ing over­whelm­ingly pos­i­tive re­views. By Fe­bru­ary of 2017 it had amassed 228 TripAd­vi­sor re­views, of which 197 were ‘ex­cel­lent,’ 25 were ‘very good’ and none was ter­ri­ble.

The main re­sort is still op­er­at­ing de­spite the tra­vails of the own­ers. Ad­ver­tised room rates range from US$302++ to US$675++. The plus-plus stuff means an­other 21 per­cent is added to the bill, so ac­tual prices range from US$365.42 to US$816.75. If you phone and ask for a deal, the lo­cal price ranges from Rp.1.5 mil­lion ( US$115) to Rp.4.5 mil­lion ( US$340) per night.

In­vi­ta­tion to In­vest

After the re­sort be­came a suc­cess, Hild and Is­mayanti had a meet­ing in Pon­dok In­dah, South Jakarta, with Aus­tralian busi­ness­man Craig Cur­tis, an ex­ec­u­tive in the con­crete in­dus­try, and his In­done­sian wife Yenny Su­naryo. The two were in­vited to in­vest in an ex­pan­sion of the re­sort, to be known as Villa Ke­lapa Re­treat II, fea­tur­ing 16 rooms.

Hild and Is­mayanti said the new ho­tel and villa com­plex would be op­er­at­ing within two years. They promised to draw up a part­ner­ship agree­ment and es­tab­lish a for­eign in­vest­ment lim­ited li­a­bil­ity com­pany, known lo­cally as a PT PMA.

Su­naryo sub­se­quently made a se­ries of trans­fers to Is­mayanti’s bank ac­counts, from 2013 to 2015, to­talling Rp.8.5 bil­lion (then equiv­a­lent to about US$714,000). She and her hus­band then waited for the part­ner­ship agree­ment and es­tab­lish­ment of the PT PMA, but the doc­u­ments never even­tu­ated. Their calls to Is­mayanti’s cell phone went unan­swered. When they tried to visit Villa Ke­lapa Re­treat II to check the progress of their in­vest­ment, they were al­legedly turned away. Dis­ap­pointed, they ini­ti­ated le­gal ac­tion. On March 17, 2016, po­lice sealed off the en­trance to Villa Ke­lapa Re­treat II, putting up a no­tice that the land and build­ings were part of a crim­i­nal in­ves­ti­ga­tion by Jakarta Po­lice. Lo­cal politi­cians ex­pressed con­cern that the dis­pute could lead to em­ploy­ees be­ing laid off, point­ing out that all 67 staff at the two re­sorts were lo­cals.

Trial

Hild and Is­mayanti were charged with fraud and em­bez­zle­ment un­der Ar­ti­cles 378 and 372 of the Crim­i­nal Code. They went on trial sep­a­rately in Jakarta in Novem­ber of 2016. Hild was ini­tially to have been de­tained, while Is­mayanti was spared de­ten­tion as the cou­ple has a three-year-old son. Hild’s lawyer said his client was sick, so judges per­mit­ted him to be held at the de­ten­tion wing of South Jakarta Pros­e­cu­tor’s Of­fice, which is usu­ally just for cor­rup­tion sus­pects and is more pleas­ant than reg­u­lar de­ten­tion cen­tres. He was later placed un­der city ar­rest on humanitarian grounds at the pre­sid­ing judge’s dis­cre­tion.

The Ger­man told the court that the money trans­ferred to his wife’s ac­count had been put toward the pur­chase of a US$900,000 prop­erty cov­er­ing 804 square me­ters in New Zealand. Is­mayanti said Su­naryo had been in­formed the money was used as ‘a de­posit’ for the New Zealand house.

State pros­e­cu­tors de­manded four years’ im­pris­on­ment for Hild and 3.5 years for Is­mayanti. Chief pros­e­cu­tor Um­ri­ani said Is­mayanti had never kept her part of the deal to make a part­ner­ship agree­ment or a com­pany, de­spite re­ceiv­ing the money. Su­naryo’s lawyer Tomy Alexan­der re­jected the two de­fen­dants’ claim that they in­tended to re­pay the money, say­ing the in­ten­tion ex­isted only in their imag­i­na­tions. He said his client had made it quite clear to them that the case would not reach court if they re­im­bursed her in­vest­ment.

Alexan­der said that in ad­di­tion to suf­fer­ing a loss of Rp.8.5 bil­lion (around US$640,000), Su­naryo also risked los­ing her own­er­ship of a 40 per­cent stake in Ke­lapa Re­treat II, in­clud­ing own­er­ship of 50 per­cent of two hectares of land at the site.

The court heard that after the ini­tial agree­ment, the two de­fen­dants had said there was a mis­cal­cu­la­tion and asked for a larger in­vest­ment. They said Su­naryo should have in­vested an ad­di­tional Rp.1.5 bil­lion (around US$114,000) as proof of her com­mit­ment to their part­ner­ship. “And when she re­ported the case, we were also ready to re­turn the money that was in­vested, but she did not want [that],” said Is­mayanti.

Alexan­der coun­tered that Su­naryo had been try­ing to re­solve the prob­lem long be­fore the case reached court, but Hild and Is­mayanti had al­legedly cut off all com­mu­ni­ca­tions and could not be reached. The lawyer said four no­taries in Bali and Jakarta had been en­gaged to fa­cil­i­tate the pa­per­work, but noth­ing ma­te­ri­al­ized be­cause Hild and Is­mayanti al­ways dodged them with a va­ri­ety of ex­cuses.

Sen­tenc­ing

Pre­sid­ing judge Made Sutrisna found the two de­fen­dants guilty of fraud be­cause they had de­lib­er­ately mis­used and failed to re­pay the in­vest­ment money. He said the new vil­las had opened with­out Su­naryo’s knowl­edge, even though she was a busi­ness as­so­ciate. He said she was told they were still in a pi­lot stage, whereas they had earned a profit of Rp.1.2 bil­lion ( US$89,000). With­hold­ing this in­for­ma­tion was deemed an act of de­cep­tion and fraud.

The judge re­jected de­fence ar­gu­ments that the case should have been in the civil realm, as the pro­posal made by Hild and Is­mayanti clearly stated their obli­ga­tions, which they had failed to meet. “The de­fen­dant [ Is­mayanti] then pre­cisely ter­mi­nated the con­tract uni­lat­er­ally, so the judges re­ject all the ar­gu­ments made by the de­fence at­tor­ney.”

Sutrisna said the only mit­i­gat­ing fac­tors in Hild and Is­mayanti’s favour were that they had no prior con­vic­tions and they have a young child. Is­mayanti looked weary but calm as her ver­dict was an­nounced in the ab­sence of her hus­band. A week later, she was present for his sen­tenc­ing.

Pros­e­cu­tor Um­ri­ani said the ver­dict gave a sense of jus­tice to the vic­tims. Su­naryo’s lawyer Alexan­der wel­comed the rul­ing, say­ing it helped to pro­vide a sense of le­gal cer­tainty to in­vestors in In­done­sia’s lead­ing tourism des­ti­na­tion. He ex­pressed hope the ver­dict could also serve as a de­ter­rent to other po­ten­tial fraud­sters and en­cour­age greater in­vest­ment.

Ke­lapa Re­treat Bali ( image via TripAd­vi­sor)

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