The scam was simple. These businesses obtain fake documents for exported shipments that do not actually exist or for containers that have been exported containing no cargo at all. Somehow they hold the actual Bills of Lading and export invoices valued as high as $100,000 or more. With this in hand they are able to process the documents through the tax offices to receive a VAT (Value Added Tax) rebate. The process is made even easier when you have corrupt official’s who approve your rebates without any hassle. How much could they possibly be making with such a simple hustle? The current audit is for Rp.19 Trillion or US$2.02 Billion paid out in 2005 alone!!! US$ 2,020,000,000.00 that’s a shit load of zeros mate.
This con has existed for decades now. Back in the 70’s and 80’s before the existence of VAT, the exporters claimed rebates on items that were specially promoted for export with incentives. But Indonesia is not the only place where this happens. In Nigeria people would import empty containers or low valued items and declare the shipment to be 10 or even 100 times more than its actual cost. In this manner they could transfer funds out of the country against documents at a fixed bank rate. The exchange rate of their currency at the bank against the US dollar would sometimes be as low as 30% less than the black market rate. That means you are earning 30 cents on your dollar every time you rotate! Such an operation thrives in countries where dollars are not easily available to the government banks. For companies operating house to house trading between here and Nigeria, millions of dollars have been generated on both ends. It sounds like small potatoes but the numbers really ad up fast. Especially when you turnover more than $100 million a year.
What is it that separates these criminals from the common man who grabs a purse from an old lady in the market, or even a thug who robs someone’s car at gun point? These white collar criminals are depriving a whole nation of people from the benefits of better public schooling, safe policing, and more government housing, apart from so many other things. Their actions are affecting the entire nation. These same business people would never consider robbing a 7/11 but somehow they experience no guilt ripping off the government so blatantly. These same people spend Sundays at church, their temples, or at their mosques, not praying for forgiveness but maintaining their respectful posture in society. The truth is that as long as they are loaded they have nothing to be ashamed of, within their social groups at least. Sad, but true.
An overhaul is what the system needs. It is not only seedy businessmen that are to blame, but also the corrupt tax officials. From what I am reading in the Jakarta Post, it seems that the government realizes this. They also acknowledge that it is their collectors who occasionally target small businesses by presenting them with heavily inflated bills. In order for the company to appeal they must fist pay 50% of the total amount. The collectors will basically settle out of court for half that amount. I have personally dealt with such individuals. It is extremely frustrating to be driven into a corner by those leaches.
Making the front page headlines yesterday we had Mr. David Nusa Widjaya. He was convicted in 2002 for a scam involving the Indonesia Liquidity Support Bank, where he allegedly embezzled Rp1.3 Trillion. He split town during a lapse in the renewal of his travel ban that was somehow only reinstated 5 months after he split to Singapore and then the States. The guy has gained some sort of celebrity status here now and is not even being made to wear handcuffs as he is transported. He wears that smug smile on his face and he says he is out to “seek justice”. He was captured in San Francisco on the 15th of Jan and given the option to face detention in America or to be deported to Indonesia. He chose the later claiming that reformed Indonesian justice system motivated him. It could not be the corrupt judicial system that seemed more appealing. But he also added a far more serious reason, and I quote, “I can’t stand living in a foreign country… I miss the food here”. ADUHHHH!!!!! How did such a dumb fuck embezzle all that money?? However, we can all rest assured that he is getting the best Nasi Goreng, Ikan Bakar, and Gado-Gado that money can buy, right there in jail.
We have yet to see what fate these criminals will meet. Numerous other con artists that have ripped of the Indonesian Government and are still at large probably in far away lands, never too far away from the casinos though. Others are just biding their time in Singapore until they can strike a deal with authorities to close a case. While I was spotted in Singapore last weekend by some fellow Sindhi’s, they asked me straight up if I was on the run. I laid it out that if I was, I would probably be checked in at the Four Seasons with 5 Eastern European women rubbing me down with scented massage oils. Seriously though, I really don’t care to judge all the moral implications. In this life you gotta to do what you gotta to do in order to attain what you need to survive, and if driving a Mercedes 500 SL is one of your basic needs than by all means go out and get it. Give it all you got and go as far as your conscience allows you to. But if you are ready to do the crime, you damn well better bite down on your lip and do the time. Its just business baby!