How do kleptocrats spend the money?
Tuesday, July 10, 2018 at 7:28AM
Harry Cassin in Gulnara Karimova, Najib Razak, Telia, Teodorin Obiang, Top Ten, VimpelCom

Last week police in Malaysia arrested former prime minister Najib Razak after seizing $273 million of loot from his houses and condos.

Prosecutors think Najib and his wife bought the loot with money stolen from Malaysia's sovereign wealth fund, 1MDB.

Najib's case appears to be following a familiar pattern among kleptocrats.

One or two handbags weren't enough. Police confiscated 457 Hermes bags worth $12 million. 

They also took 423 watches worth $19 million from Najib's homes, and 234 sunglasses worth $93,000.

There were 12,000 pieces of jewelry -- 1,400 necklaces, 2,200 rings, 2,100 bangles, 2,800 pairs of earrings, 1,600 brooches, and 14 tiaras, Malaysian police said. The jewelry could be worth around $180 million.

In the United States, the DOJ is trying to seize $1.7 billion in 1MDB-related assets, including a $5 million condo in New York City, artwork by Picasso and Basquiat, and a $260 million mega-yacht called The Equanimity.

Although Najib's case is an extreme example, it looks familiar. That's because kleptocrats apparently love to shop.

Teodoro Nguema Obiang Mangue, the second vice president of Equatorial Guinea and son of the president, once owned a $1.8 million collection of Michael Jackson memorabilia, including one of his gloves.

Teddy Obiang, as he is often known, settled a $70 million forfeiture action with the DOJ in 2014.

Among his other U.S. assets were a Gulfstream G-V jet worth $38.5 million, a $30 million mansion in Malibu, California, and a 2011 Ferrari worth $530,000.

In France, prosecutors seized assets amassed by Obiang that included a $28 million Paris mansion, a dozen luxury cars, and an art collection that featured a Degas and five works by Rodin.

When Ukraine's ruling kleptocrat, Viktor Yanukovich, was kicked out of power and left the country in 2014, he left behind a 340-acre private compound filled with loot.

There was a golf course, a helipad, and a garage filled with classic sports cars and motorcycles.

Yanukovich had a hovercraft and a jet-powered boat, along with a private zoo and a greenhouse loaded with banana plants.

Gulnara Karimova, the eldest daughter of the late Uzbek President Islam Karimov, lived in a $20 million mansion in Geneva. 

She wasn't only a big spender. She also "borrowed" freely.

After she left her Swiss mansion (and ended up under house arrest in Uzbekistan) dissidents discovered more than 60 paintings and objects pilfered from her country's state art museums.

The former socialite, fashion designer, and model allegedly took $300 million in bribes from VimpelCom and MTS of Russia and TeliaSonera of Sweden.

Thanks partly to Karimova, both Telia and VimpelCom landed on the FCPA Blog's top ten list.


Harry Cassin is the managing editor of the FCPA Blog.

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