Victims of Financial Fraud - Business Law - Lecture Slides, Slides of Commercial Law

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Victims of Financial Fraud 1 Docsity.com Some Legislation Concerning the Victim  Until 2006 there is no special law that gives the crime victims the right for compensation from the state or restitution from the offender.  However, in the Criminal Procedure Code (KUHAP-Kitab Undang-Undang Hukum Acara Pidana) of 1981 the victim of a crime is recognized as a party in the criminal process against the offender : a) the right to complain if either the police or the prosecutor does not continue to process the case against the offender (pra-peradilan); b) the right to ask the prosecutor to join in a civil suit for damages with the criminal charges to the offender (penggabungan perkara ganti kerugian).  Note: 1) A claim for compensation from the state is also possible, for a defendant who is found not guilty by the court and suffered unlawful conduct from the police; 2) In conditional sentencing, the court may order the offender to pay restitution to the victim as a condition of the sentence (Penal Code of 1918). 2 Docsity.com Victim Protection Mechanism  Law No 13 of the year 2006 on the Protection of Witnesses and Victims (Perlindungan Saksi dan Korban)  The main purpose of this law is to protect victims who act as witnesses;  One of the reasons stated is that the success of the trial of an offender is the existence of evidence and a witness - the victim as a witness is crucial for the case and many times witnesses are afraid or reluctant to appear before the police or in court – victims are regarded as the main source of information about crimes and offenders - they shoud not be re-victimized by the justice process.  An institution/commission is established to fulfill the purpose of this law – it is named “The Institution For The Protection of Witnesses and Victims” (Lembaga Perlindungan Saksi dan Korban – LPSK );  Article 7 : -A victim can through LPSK submit/apply to the court : a) (the right) for compensation in grave human rights violations; b) (the right) for restitution or damages (which is the responsibility of the offender) 5 Docsity.com (Victim Protection … )  The following are a.o. the rights also granted to a victim (article 5): a) protection for personal safety, safety of the family and property. and to be safe from any intimidation to act as a witness in his/her case; b) participation in choosing the procedure and form of protection and safety; c) to receive information about the development of the case; d) to receive information about the decision of the court; e) to receive information when the offender is released from prison; f) to receive a new identity; g) to receive a “new place to live” (tempat kediaman baru); h) to receive temporary living allowance, until his/her protection is ended. These rights are not automatically granted to the victim as a witness – the Commission (LPSK) will make the decision based on the merrit of the case. It is assumed that priority will also be determined by the availibility of the budget. 6 Docsity.com A Non-violent Crime - Fraud  Fraud is a non-violent crime – unlike violent crimes, they usually don’t get much attention from the media or the public;  More attention is given to violent crimes because it is considered to be committed against people – while the non-violent crimes are usually committed against property;  However, when there are “collective/multiple victims” in a fraud case, the media tends to cover it and gives it special attention. Celebrity cases are e.g. Maddox (with his Ponzi scheme); Enron and WorldCom (investment fraud thru the public stock exchance) – in Indonesia e,g. Global Bank; Century Bank; and Citibank.  What is needed is a law which provide for Victim Restitution for the financial and emotional suffering from fraud – especially when the fraud is a white-collar crime or a corporate crime ! 7 Docsity.com Restitution for Financial Fraud (Principle vs Problem)  Society should punish it wrongdoers, but should also insure that the offender is required, if possible , to restore the victim to his/her prior state of wellbeing – this principle is especially true for fraud victims which suffer “a financial nightmare” (pension money; savings;etc) – this is possible by the payment of restitution.  A problem is when the offender has spend the money and have no resources with which to repay victims – a legal problem is when the offender has place assets in the name of others (friends or family) or hidden the money in offshore accounts in tax heaven countries or countries who are unwilling to enter into an extradition agreement with Indonesia.  In Indonesia many fraud victims know from experience “that it is one thing to obtain a judgement in your favor; but quite another to enforce/collect the restitution “ 10 Docsity.com Possible Solutions ???  For offshore hidden “stolen money” of fraudelent transaction – recovering the money thru tracing of laundered money – an optimistic approach is the StAR (Stolen Asset Recovery) innitiative from UNCAC (anti-corruption convention).  For domestically hidden “stolen money” – the breakthrough is in the new money laundering act (UU no 8/2010 tentang Pencegahan dan Pemberantasan Tindak Pidana Pencucian Uang), with its provision of the “reversal of the burden of proof” - “civil action in rem” – “civil forfeiture” – and “in absentia court process”.  For cooperative offenders, the Restorative Justice Principle “to heal and put right the wrong” may also be a solution – however with collective victims the process of reconciling the conflicts between offender(s) and victims will not be easy – a consensus should be reach among the victims that the “retributive and revenge” approach is not suitable in the respective case. 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