Wolf of Wall Street producer to pay US$60mil to resolve corruption allegations

LOS ANGELES: Red Granite Pictures has agreed to pay US$60mil to the US government in order to resolve allegations that it profited from a massive Malaysian corruption scandal.

The company, which produced The Wolf of Wall Street among other films, filed a joint stipulation with federal prosecutors on Tuesday. Under the agreement, Red Granite does not admit to any wrongdoing.

“We are glad to finally put this matter behind us and look forward to refocusing all of our attention back on our film business,” the company said in a statement.

Prosecutors filed a civil asset forfeiture action against the company in July 2016 as part of a much broader effort to recoup more than US$1bil allegedly embezzled from 1MDB. The Justice Department has accused financier Jho Low of masterminding a scheme to steal US$4.5bil from the fund.

Riza Aziz, the CEO of Red Granite, is the stepson of Malaysia’s prime minister and a close friend of Low’s. Prosecutors alleged that he used more than US$100mil taken from 1MDB to finance The Wolf of Wall Street, Dumb and Dumber To and Daddy’s Home. The agreement provides that Red Granite will make the forfeiture payment in three installments: US$30mil within 30 days, US$20mil within the next 180 days, and the final US$10mil within 180 days after that.

While the case has been pending, Paramount Pictures has held Red Granite’s profits from Daddy’s Home. Under the agreement, Paramount will transfer that amount to an account controlled by the US government. After the first forfeiture payment of US$30mil, the government will release US$3mil of the Paramount funds to Red Granite, to cover its operating expenses for the following 180 days. The balance of the Paramount funds will be released to the company upon full payment of the forfeiture.

Red Granite can apply to receive some of the Paramount funds early, but only if for “ordinary course” transactions. Under the terms of the settlement, Aziz is not drawing any salary from Red Granite above what is required to maintain health insurance coverage. That will continue until the US$60mil is paid in full.

Riza has claimed that he never knowingly used stolen funds for his film projects. Riza was also accused of using stolen funds to buy luxury real estate, including a US$35mil condominium in New York, a US$41.8mil London townhouse, and a US$17.5mil mansion in Beverly Hills. The US government is also seeking to seize those properties.

As part of the case, the US government has also taken possession of three artworks that Low and an associate gifted to Leonardo DiCaprio, the star of The Wolf of Wall Street. DiCaprio also agreed to turn over an Oscar that had been awarded to Marlon Brando, and which Red Granite had given him as a gift. DiCaprio was not accused of wrongdoing.