Subject: Indonesian defence ministry party to massive forgery: report

Indonesian defence ministry party to massive forgery: report

JAKARTA, July 26 (AFP) - A trial witness has implicated Indonesia's defence ministry in a forgery ring which churned out 2.1 million dollars worth of fake local currency notes, a report said Wednesday.

A police witness in the forgery trial at the Central Jakarta District court testified that one of the defendants had told police questioners that the defence ministry had provided forgers with the serial numbers for the counterfeit bills, the Jakarta Post said.

The witness, senior police inspector Umar Faroq, also said that the same defendant also indicated the involvement of officials in the central bank and the state mint PT Peruri, the Post said.

Retired army Major Ismail Putra "told the detectives including myself that he got the numbers from the ministery of defence," the Post quoted Faroq as telling the court on Tuesday.

Ismail, one of nine defendants in the forgery case, was also alleged to have said the bank had provided him with six numbers -- FRM, LZN, LZO, RPM, TWR and YBD -- to be used on the notes.

Faroq also told the court that Ismail had told investigators in March that it was usual practice for the central bank to disclose the serial numbers to the ministry.

The inspector also said that during the arrest of another of the defendants, identified as Junie, at the printing company where the notes were made, he found records detailing the purchase of ink, paper and other supplies.

"One entry also states that 10 million rupiah (1,111 dollars) was paid to the state-owned Perum Peruri since it provided the defendants with the (bank note) negatives," Faroq said.

The Post quoted a third defendant, Ardy Sukarman, as saying in a February 25 police report read to the court that Major Ismail had told him he was representing the defence ministry when he allegedly persuaded Sukarman to join the counterfeit project.

"Ismail told me that he was ordered by the central bank to carry out the project, and that as a representative of the ministry of defence, he was ordered to print money which would be used for the ministry's operational costs in Aceh," the Post quoted the Sukarman testimony as saying.

In earlier testimony Ismail had implicated Indonesian army chief of staff General Tyasno Sudarto in the forgery ring, and said the general had visited the printing press.

Sudarto later denied the charges and said they were a part of a campaign to discredit the military.

"Mr. Darto (Sudarto) knew very well that this fake money production was for the interest of the Indonesian military and ... East Timor," Ismail told the court on July 11, according to trial reports carried by the Jakarta Post.

Sudarto was the chief of the Indonesian Military Intelligence Agencyfrom January 1999 until he was appointed army chief of staff in November last year.

"He sanctioned the process. The (former) BIA chief also visited Yustinus Kasminto's house in Palmerah, West Jakarta, where the printing was done," Ismail told the court then.

The fake money, worth 19.2 billion rupiah (2.1 million dollars) was produced by the defendants between July last year and February this year, the court was told.

The counterfeit bills are in 50,000 rupiah denominations, the last notes in the country bearing the likeness of former president Suharto.

On Monday the government ordered the withdrawal of the "Suharto" notes.

Bank Indonesia's announcement did not give a reason for the withdrawal of the notes, but newer versions of the same denominations have since been issued.

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