New York City Debt Collection Defense Attorney

Citigroup faces lawsuit in Indonesia claiming its debt collectors beat man to death

A Bloomberg news report today tells a chilling tale of a man who was beaten to death in March by debt collectors hired by Citibank in Indonesia to collect on a $5,500 loan. The man, Irzen Octa, ran a courier and import-export business. His business slowed in 2008 with the economic downturn. According to his wife, six debt collectors came to Octa’s home last October looking for money. There was shouting and foul language. The debt collectors stayed the night on the porch but eventually left.

In March, two debt collectors again came to the house. Octa told his wife that he was being given the opportunity to repay only part of the arrears. He planned to go to Citibank the next day to settle up.

The next morning, Octa dropped his daughter at school and went to Citibank’s offices just after 10 AM. He emerged four hours later, beaten and slumped in a wheel chair. He was driven to a hospital where he was pronounced dead. Jakarta police jailed the debt collectors, and stated that Octa had been a victim of a violent assault. An autopsy revealed brain damage.

Lawyers for the three debt collectors say the collectors only “tapped Octa on the shoulder, kicked his chair, and thumped a table.” They say the brain damage shown by the autopsy was caused by a stroke, and that Octa was alive when he left Citibank.

Citigroup’s Indonesia country head (who has since been replaced) said in April that Citi’s internal investigation found no evidence that Octa was physically harmed in its offices.

Last year, CEO Vikram Pandit proudly proclaimed in the bank’s 2010 annual report that Citigroup is “America’s only truly global bank.” Since 2008, when Citi lost $27.7 billion and was saved from collapse only by a $45 billion US government bailout, Pandit’s strategy for survival has focused on emerging markets like Indonesia.

The strategy seems to be working, at least when it comes to profits. The economies of developing nations contributed more than half of Citi’s $10.6 million profit last year.

Octa’s wife is suing Citi for $348 million. Citi refused to comment to Bloomberg on the lawsuit, but said it offered to deduct 40% from the principal lawsuit, and it has made a “compassionate offer" to the family through the Indonesian Red Cross to pay the family’s living expenses, and for the children’s education.

-Sheril Stanford