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FCPA Blog Daily News

« What did the alleged 1MDB looters buy with $1 billion? Here's the list | Main | Martin Kenney: How, then, do we stop the fraudsters among us? »
Wednesday
Jul202016

DOJ seeks forfeiture of $1 billion linked to Malaysia state fund

The DOJ filed a civil forfeiture complaint Wednesday against assets allegedly bought with money looted from Malaysia's sovereign wealth fund, 1Malaysia Development Berhad.

More than $3.5 billion was misappropriated from the fund, the DOJ said.

It filed the 144-page complaint in federal court in Los Angeles.

The forfeiture action targeted about $1 billion in assets located in the United States, the UK, and Switzerland. The assets include mansions and penthouses, a $35 million executive jet, and artwork.

The DOJ said the assets are "traceable to an international conspiracy to launder money misappropriated from 1MDB."

In February, Singapore seized a large number of bank accounts linked to a money laundering investigation involving the Malaysia state investment fund.

And in May, Singapore shut down the local operations of Swiss-based BSI Bank and named six bankers suspected of possible criminal conduct in connection with the handling of the Malaysian government fund.

It was the first time the Monetary Authority of Singapore had closed a bank since 1984.

1MDB is chaired by Malaysia Prime Minister Najib Razak.

Wednesday's DOJ lawsuit didn't name Najib.

The suits named his step son, Riza Aziz, as a "relevant individual" in the case.

The civil complaints also named Low Taek Jho, also called Jho Low, a private businessman, and two Abu Dhabi government officials -- Khadem al-Qubaisi and Mohamed Ahmed Badawy Al-Husseiny.

Riza Aziz is part owner of Red Granite Pictures, a movie production company that funded The Wolf of Wall Street. The DOJ filed forfeiture claims against the royalties from the movie.

Money diverted from 1MDB was also used to buy luxury real estate, pay gambling expenses at Las Vegas casinos, and purchase more than $200 million in artwork, including a van Gogh drawing, the DOJ said.

The real estate included a penthouse in the Time Warner building in Manhattan.

The alleged offenses occurred from 2009 through 2015, according to the complaints.

Switzerland and Luxembourg have also opened money laundering investigations into 1MDB.

The DOJ set up the Kleptocracy Asset Recovery Initiative in 2010 to take away safe havens for kleptocrats and their stolen money. This is the biggest forfeiture action since the initiative started.

____

Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016.

Reader Comments (2)

One wonders why DOJ has made Malaysia its poster child for this initiative: Mexico is so much closer and corruption there is directly related to the safety and security of American citizens.
July 20, 2016 | Unregistered CommenterMichael Deal
For what I have known, to move a sovereign wealth fund, it requires many procedures and steps to follow. Apparently there have been many leaks, doors and windows were wide open to siphon off $1 (one) Billion whilst all known and unknown people were normally conducting their daily routines.
It boggles my mind to understand when $1 (one) Billion was invested in nearly 20 institutions, where were those Compliance Officers in these institutions. Setting aside the fact that there were no Compliance Officers, how these transactions could have passed thru Attorneys of repute both nationally and internationally, Public Accountants acting as External auditors, National and International Bankers, Brokers, Consultants without knowing basic question of “source of funds”, KYC procedures, and their origin. Where were those due diligence procedures? Were they set side as these professional saw “Opportunities”?
Surely every professional involved in these $Billion must have had field days, bonuses and lots of “pats” on their backs?
Every time I see these kinds of “Management Overrides”, it reminds me of a caption I learnt decades ago: “Never mind the quality, feel the width”.
July 22, 2016 | Unregistered CommenterSubash Murray
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