WASHINGTON – US authorities on Thursday moved to seize another US$540 million in assets allegedly stolen in Malaysia’s multi-billion-dollar 1MDB fraud and used to fund extravagant spending, the Justice Department announced.
The move compounded court cases launched last year in which Washington sought to confiscate more than US$1 billion allegedly embezzled by businessmen with political connections in Malaysia – bringing the total amount US officials say was stolen to US$4.5 billion.
The scandal has rocked the Malaysian governing class, exposing Prime Minister Najib Razak to allegations of corruption and of personally profiting from the alleged theft, which he has denied. 1MDB is a Malaysian sovereign wealth fund created in 2009.
“Today’s complaints reveal another chapter of this multi-year, multi-billion-dollar fraud scheme, bringing the total identified stolen proceeds to US$4.5 billion,” acting US Assistant Attorney General Kenneth Blanco said in a statement.
“This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people.”
Prosecutors have identified another US$540 million of the assets that can be seized, prosecutors said on Thursday.
The suits say the funds were used for investments such as the Hollywood film The Wolf of Wall Street – about financial crimes by wealthy businessmen – as well as high-end real estate in London, New York and Beverly Hills as assets to be seized.
In Los Angeles, actor Leonardo DiCaprio has turned over an Oscar won by Marlon Brando to US investigators probing alleged money laundering by 1MDB, his representatives said on Thursday.
DiCaprio has also initiated the return of other, unidentified items that the actor said he accepted as gifts for a charity auction and which originated from people connected to the 1MDB wealth fund.
In July, Hollywood production company Red Granite was accused in a U.S. civil lawsuit of using US$100 million that prosecutors said had been diverted from the 1MDB fund to finance DiCaprio’s 2013 film “The Wolf of Wall Street,” in which he starred.
DiCaprio said in October he was cooperating with the probe and would return any gifts or donations if they were found to have come from questionable sources.
In court papers filed Thursday in Los Angeles, federal prosecutors said that in 2014, the Malaysian businessman Jho Low stole US$850 million from funds borrowed from a syndicate of banks, ostensibly meant to repay options on bonds issued in a prior phase of the embezzlement scheme.
Instead, however, the money went to purchase a US$261 million, 91-m yacht equipped to handle 26 guests, 33 crew, with a helipad, gym, cinema and pool.
Conspirators also bought a US$3.2 million work by Picasso and a US$9.2 million Basquiat as well as investing in other Hollywood films like the comedy Dumb and Dumber To according to the Justice Department. Low has also denied wrongdoing.
The Justice Department in 2010 launched the “Kleptocracy Asset Recovery Initiative” to seize the ill-gotten gains of foreign officials which pass through the American financial system and where possible return them to the victims of fraud.
AGC MALAYSIA’S AND PMO’S STATEMENTS
In response, the Attorney General’s Chambers of Malaysia (AGC) released a statement on Jun 16 (Friday), saying it took note of the latest civil lawsuits by the US Department of Justice.
It expressed frustration that yet again AGC was not informed or alerted by DoJ of this action, the second time coming after the anniversary of the first action taken, and appears to be a repeat of it.
“We also note that there has been no evidence from any investigation conducted by any law enforcement agencies in various jurisdictions that shows that money has been misappropriated from 1MDB; and that there have been no criminal charges against any individuals for misappropriation of funds from 1MDB.”
The AGC said 1MDB is a Malaysian company and has been the subject of multiple investigations within the country, including by the Malaysian Anti-Corruption Commission, Auditor General and bi-partisan Public Accounts Committee.
After review, the AGC said it found no crime was committed by 1MDB. However, there is still an ongoing investigation by the Royal Malaysia Police.
The AGC expressed its strong concerns at insinuations made against the Prime Minister of criminal wrongdoing, saying at no point in the civil claims was the Prime Minister named as a defendant or has been alleged to have committed any wrongdoing.
“To date, AGC has yet to receive any request from DoJ to obtain any information or evidence. However, we would welcome such a request in line with our commitment to international cooperation and the fight against money laundering.”
The AGC said it would not hesitate to initiate proceedings against the perpetrators of criminal acts provided there is sufficient evidence to do so.
It said any wrongdoing will be punished and Malaysia will always uphold the rule of law.
In a separate statement, the Prime Minister’s Office said the Malaysia government will fully cooperate with any lawful investigation of Malaysia companies or citizens in accordance with international protocols.
It said there have been numerous and extensive investigations by Malaysian authorities into 1MDB, and no crime was found. “Until then, unproven allegations should not be taken as facts.”
It added that Malaysia stands firm in its support of transparency and good governance. “We are confident that justice will take its course and Malaysia will continue to cooperate with all willing international agencies.”
