Indonesian arrested for embezzling $40m

Indonesian arrested for embezzling $40m

Police have arrested real estate agency owner Christopher Andreas Lie for allegedly embezzling at least 400 billion rupiah (S$40 million) from prospective apartment and condominium hotel buyers, in what has been described as the biggest property scam in the country.

Christopher's Jakarta-based PT Royal Premier International through its real estate agency Century 21 allegedly lured customers by offering units with friendly payment terms, prizes such as cars and fat cash-backs, and guarantees that they would be tenanted.

The agency made deals with 12 developers to pre-purchase units in their projects - mostly condominium hotels - located in Jakarta, Bandung, Bali and Yogyakarta, to be pre-sold to home buyers. The problem occurred when the agency pre-sold the units multiple times and never handed over the units' titles to the home buyers after they had paid for the units in full.

The prices of the units range from 500 million rupiah to 2 billion rupiah and the units were sold between early 2012 and late 2013.

Condo hotel units are typically owned by individuals who rent them out when they are not using the homes.

Century 21 made orders to buy the apartment and condo hotel units with a total value of 802 billion rupiah. Many of the 1,157 buyers had paid for their units in full, but only 155 billion rupiah was paid to the developers.

Another 245 billion rupiah never went to the developers but was used, among other things, to buy insurance products under the names of Christopher and his wife and his business partner and his wife. Police are after his business partner.

Christopher was arrested late last month. Police started probing the case in December 2014 after home buyers filed a report. Lieutenant-Colonel Arie Ardian, a senior detective in charge of special crime investigation at Jakarta police station, told The Straits Times: "Christopher, through Royal Premier, bought a well-known franchise 'Century 21' to convince prospective home buyers, and it worked."

He added that Christopher was offering payment terms that were "too good to be true".

For instance, home buyers were given a car for making instalment payments earlier than scheduled and cash backs every month amounting to 2 per cent of what they had paid to the agency.

"This is the largest fraud case in the property sector," Mr Arie said, adding that Christopher faced a jail term of up to 20 years if found guilty.

This article was first published on May 28, 2015.
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