A

Riau-based official with state-owned oil and gas enterprise PT Pertamina, identified as Yusri, has been taken into police custody for allegedly running a ship-to-ship fuel smuggling operation over the past five years.

Yusri was arrested following a police investigation based on a report from the Financial Transaction Reports and Analysis Centre (PPATK) alleging that Niwen Khairani, a civil servant in Batam, Riau Islands, logged banking transactions worth Rp 1.3 trillion (US$110.5 million) between 2008 and 2013.

Niwen turned out to be Yusri'€™s sister.

National Police economy and special crimes investigation deputy head Sr. Comr. Rahmad Sunanto said on Wednesday that Yusri, a senior supervisor of Pertamina in the Riau town of Dumai, had smuggled subsidized fuel into the black market with the help of a charter-vessel businessman, Ahmad Mahbub, as well as two temporary workers with the Indonesian Navy, identified as Dunun and Aripin.

'€œYusri, who is assigned to oversee fuel shipments from Dumai to Siak, Batam and Pekanbaru, informed Dunun about the shipping schedule. Later on, Dunun contacted AM [Achmad]'€™s vessel to load fuel from [Pertamina'€™s] tanker ship offshore,'€ Rahmad announced in Jakarta.

A preliminary police investigation found that Yusri altered shipping reports to protect his illicit business.

'€œPertamina applies acceptable loss rates at 0.30 percent of total load for every shipment. Aside from absorbing this acceptable loss quota, he [Yusri] also unilaterally added more load to the tanker, from the original 100 metric tons of fuel to 120 or 130 metric tons,'€ Rahmad said.

The police suspect that Yusri and Ahmad have been conducting the ship-to-ship fuel transfer four times a month since 2008. Ahmad allegedly sold the stolen subsidized fuel to ships passing through international waters just off Riau.

'€œThe customers come from Indonesia, Malaysia, Singapore and other countries. The fuel was sold below the market price; gasoline was sold at Rp 3,500 [US$ 0.29] per liter, solar [diesel fuel] was sold at Rp 4,500,'€ said the police'€™s money laundering subdivision head, Sr. Comr. Budi Wibowo.

'€œAfter completing the sales, AM [Achmad] went to Singapore and ordered couriers to hand over the cash in Singaporean dollar denominations to Yusri'€™s sister NK [Niwen Khairani] in stages,'€ he said.

Niwen, a low-ranking employee in the Batam administration, transferred some of the illicit proceeds to a Navy temporary worker, Aripin, who was responsible for distributing the cash to several individuals who made the smuggling scheme possible.

The National Police have named Yusri, Niwen, Achmad, Aripin and Dunun as suspects and confiscated one vessel, six cars and trucks, heavy-duty vehicles and more than 65 buildings and plots of lands belonging to the individuals.

The five will be charged with multiple violations of the 2001 Corruption Law and the 2010 Money Laundering Law.

'€œAll the suspects have been taken into custody, except for Achmad, who is still under interrogation. We have issued a travel ban against him as he once said he would go on the umrah [minor haj pilgrimage],'€ Budi said.

The National Police are closely coordinating with the PPATK and the Navy Military Police to estimate the total state losses and identify more individuals linked to the smuggling operation.

'€œWe have frozen more than 100 bank accounts belonging to the five suspects and other individuals, who may soon be investigated and named suspects,'€ Budi added.