A month-long police hunt came to an end at midnight on Sunday after the owner of the Tripanca Group, Sugiharto “Alay” Wiharjo, was arrested at Soekarno-Hatta International Airport outside Jakarta.

A joint Lampung and Jakarta police task force said Alay was captured as he was trying to flee the country.

Alay was declared a suspect in an embezzlement case, following a Lampung Police inquiry into 12 reports filed over fictitious credits worth Rp 378 billion (US$34.3 million), deception and embezzlement. He had been sought by the police since Dec. 2, after disappearing from Lampung in early October 2008.

After his arrest, he was flown to Lampung for detention at the Lampung Police headquarters. An investigation by the Lampung Police indicates Alay and directors at Bank Tripanca may have violated Article 49 of the 1992 Banking Law as revised in 1998, and could face jail time of between five and 15 years, as well as fines of Rp 10 billion to Rp 200 billion.

Lampung Police spokeswoman Adj. Sr. Comr. Fatmawati confirmed Alay had been arrested, but declined to elaborate on further police action in the case.

Investors and coffee growers who had deposited their money in Bank Tripanca responded to the arrest with delight.

“With Alay’s arrest, I hope I can get my money back soon,” said Lina, 38, an investor who lost Rp 1 billion after the bank collapsed.

Ketut Erawan, speaker of the East Lampung Regency Legislative Council, welcomed news of the arrest, but cautioned against expecting a speedy return of the regency’s funds totaling Rp 107 billion, also lost in the bank.

“The money should have gone to the development budget of East Lampung and the 2009 regional budget. The failure to disburse it has caused a deficit in the 2009 budget,” he said.

The police have questioned 36 witnesses believed to be implicated in the case.

Alay has become something of a folk legend among Lampung residents. The man from Malang, East Java, began his career in the late 1970s sorting different types of coffee and tasting them for quality specifications, eventually emerging as Lampung’s own coffee czar.

Though the rise of his business empire was meteoric, its collapse was just as spectacular, rocking not only coffee entrepreneurs in Lampung, but also customers of Bank Tripanca, which he owned, and regional officials and journalists.

Most said they were shocked because they had trusted Alay as a “friendly and kindhearted man”, with many politicians even borrowing money through his bank.

Along with Artalyta Suryani, now serving prison time for her role in bribing a prosecutor in a separate, Alay was renowned as a “boss” who provided generous loans to candidates running for local offices in Lampung. Local journalists were also close to Alay, whom they dubbed a “walking ATM”.

Alay is believed to have conducted most of his business through underhand transactions, with funds gleaned on the basis of trust. With high confidence in Alay, many officials, investors and regional administrations reportedly deposited their funds in Tripanca in large amounts.

The East Lampung budget, worth Rp 107 billion on December 2007, was also deposited in the bank. Most of the investors were drawn to the 30 percent interest the bank promised.

The collapse of the Tripanca empire is believed by analysts to have stemmed from the high confidence investors had in Alay. As a result of this, he had to make good on his pledge to pay the impossibly high interest.

The growth of Alay’s business empire was so rapid it aroused suspicion that his companies, PT Tripanca Group and PT Cideng Makmur Pratama (CMP), were involved in money laundering operations for notorious tycoons such as Syamsul Nursalim and Artalyta.

Alay has strongly denied these accusations.

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