US goes after $1 billion taken from Malaysian fund

 

 

WASHINGTON — The United States moved Wednesday to recover more than $1 billion that federal officials say was stolen from a Malaysian wealth fund by people close to Prime Minister Najib Razak, money that was used for high-end real estate, artwork and production of the Hollywood film The Wolf of Wall Street.

The diverted funds paid for luxury properties in New York and California, a $35 million private jet and expensive paintings by Vincent Van Gogh and Claude Monet, according to federal government complaints that demand the recovery and forfeiture of the ill-gotten assets.

The complaints, filed in Los Angeles, allege a complex money laundering scheme that the Justice Depart­ment says was intended to enrich top-level officials of a government-controlled Malaysian wealth fund.

That fund, known informally as 1MDB, was created in 2009 by Najib with the goal of promoting economic development projects in the Asian nation.

Instead, officials at the fund diverted more than $3.5 billion over the next several years through a web of shell companies and bank accounts in Singapore, Switzerland, Luxem­bourg and the U.S., the complaints allege.

About $1.3 billion raised through purportedly legitimate bond offerings was swiftly transferred to a Swiss bank account and, from there, distributed to fund officials for their personal benefit, authorities say.

“In seeking to seize these forfeited items, the Department of Jus­tice is sending a message that we will not allow the United States to become a playground for the corrupt,” Eileen Decker, the U.S. attorney in Los Angeles, said at a news conference. “And we will not allow it to be a platform for money laundering or a place to hide and invest in stolen riches.”

The money the government wants to recover reflects the amount officials were able to trace through the U.S. financial system.

In a statement, Najib’s press secretary said the “Malaysian authorities have led the way in investigations into 1MDB” and that the government would fully cooperate with the U.S. investigation.

The Justice Department says the forfeiture demand is the largest single action it’s taken under its Klep­to­cracy Asset Recovery Initia­tive, which seeks to recover foreign bribery proceeds and embezzled funds.

Federal officials say the funds laundered into the U.S. for the benefit of 1MDB officials and their associates were used to pay for property including Manhattan penthouses and Beverly Hills mansions; to settle gambling debts in Las Vegas casinos; and to pay for a London interior decorator, expensive artwork and the production of films, including the 2013 Oscar-nominated movie The Wolf of Wall Street.

“Neither 1MDB nor the Malay­sian people ever saw a penny of profit from that film or from any of the other assets that were purchased with funds that were siphoned from 1MDB,” said Assistant Attorney General Leslie Caldwell, the head of the Justice Department’s criminal division.

Representatives of 1MDB said in a statement that it would cooperate.

The complaints identify by name multiple Malaysian nationals that the government alleges profited from the scheme.

Among them is Riza Shahriz Bin Abdul Aziz, who co-founded Red Granite Pictures, a movie production studio whose films include “The Wolf of Wall Street.”

According to the complaint, eleven wire transfers totaling $64 million were used to fund the studio’s operations, including the production of the movie starring Leonardo DiCaprio.

Riza is the stepson of Najib, the prime minister, who is not named in the complaints.

But the Justice Department described Riza as a relative of an unnamed “Malaysian Official 1” – a high-ranking Malaysian government official with authority to approve all appointments and removals from 1MDB’s board of directors and whose approval was needed for the fund’s financial commitments.

Phone messages left at the movie studio on Wednesday were not immediately returned.

But opposition lawmaker Tony Pua said Malaysia has become a laughing stock with the U.S. move as the government had insisted that no money was missing from the fund. He said the government must open up investigations into the fund and uncover the identity of the Malaysian senior official behind the money laundering.

 

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Thu, 11/23/2017 - 17:28

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