(Aug 11): The US is moving forward with a criminal investigation into money stolen from a Malaysian state investment fund that allegedly was used to acquire about US$1.7 billion ($2.3 billion) in real estate, art, jewelry and other assets.
Court filings by the Justice Department Thursday show the US is escalating its probe in a worldwide effort to track how much of the money that was raised by 1Malaysia Development Bhd. was used to pay for luxury real estate in New York, London and Beverly Hills, film productions, private jets, yachts and more.
Justice Department officials asked a judge in Los Angeles to put on hold civil forfeiture lawsuits against assets acquired by Malaysian financier Low Taek Jho, also known as Jho Low, and others involved with 1MDB because pursuing these cases may hamper the criminal investigation.
The US investigation is part of a global effort to track how much of the US$6 billion ($8.2 billion) that 1MDB raised for development projects was allegedly embezzled or involved in money laundering. Switzerland, Singapore and Luxembourg are among the countries also investigating the roles played by banks and individuals.
Separately, 1MDB paid US$350 million to an Abu Dhabi sovereign wealth fund on Thursday ahead of an Aug. 12 deadline, the Malaysian Insight reported, citing bankers it didn’t identify. The payment is part of an arbitration settlement agreement with International Petroleum Investment Co. after a debt dispute that brought up further allegations of missing funds and possible fraud.
‘Destruction of Evidence’
An FBI agent warned in a US court filing that information disclosed in the civil cases may reveal “potential targets and subjects of the investigation and the investigative techniques that have been and will be used in the investigation.”
"Such disclosures could result in the destruction of evidence, flight of potential subjects and targets, or the identification and intimidation of potential witnesses," according to the agent’s declaration.
Thom Mrozek, a spokesman for the US attorney in Los Angeles, had no immediate comment on the Justice Department’s filings.
In its civil cases, the US has alleged that from 2009 through 2015, more than US$4.5 billion belonging to 1MDB was diverted by high-level officials of the fund and their associates.
The Low assets the US is trying to seize include a stake in New York’s Park Lane Hotel, a US$107 million interest in EMI Music Publishing, a US$35 million Bombardier Jet and a US$30 million penthouse at Time Warner Center in New York.
Diamonds, Picasso
In a second round of 1MDB-related forfeiture lawsuits filed in June, the Justice Department alleged that a US$1.29 million heart-shaped diamond and a US$3.8 million diamond pendant Low gave in 2014 to his then-girlfriend, actress Miranda Kerr, were bought with stolen money.
Low allegedly also gave a US$3.2 million Picasso painting to actor Leonardo DiCaprio, who played the lead in "The Wolf of Wall Street," a movie the US says was financed by Riza Aziz, a stepson of Malaysian Prime Minister Najib Razak, using misappropriated 1MDB funds.
Najib, who until last year was the chairman of 1MDB’s advisory board, has denied any wrongdoing and was cleared by Malaysia’s attorney general.
The Prime Minister’s Office, the Ministry of Finance and 1MDB didn’t immediately reply to emails seeking comment on the latest US filings. 1MDB is wholly-owned by the finance ministry and it has consistently denied any wrongdoing.
Malaysia’s prime minister and attorney general responded angrily to the US forfeiture actions in June and suggested they were politically motivated.
Low also issued a statement in June, saying the US government was continuing “inappropriate efforts to seize assets despite not having proven that any improprieties have occurred.”
“We look forward to the court being presented with the actual facts which demonstrate that the DOJ’s case is completely without foundation,” he said through a representative.
The case is US v. "The Wolf of Wall Street," 16-cv-05362, US District Court, Central District of California (Los Angeles).
