US goes after $1 bn in assets linked to Malaysia fund
WASHINGTON: The US Justice Department has moved to seize more than $1 billion in assets linked to a state fund founded by Malaysia’s prime minister, painting a scathing picture of fraud on an “enormous scale”.
The lawsuits filed on Wednesday puts renewed pressure on Prime Minister Najib Razak, with court documents making thinly veiled references to him as a beneficiary in the alleged theft of more than $3.5 billion by his stepson, a family friend and various officials.
The assets targeted are believed to have been purchased with money stolen from state investment fund 1MDB and include fine art, high-end US real estate, and a business jet.
Najib’s stepson Riza Aziz also used more than $100 million in suspect funds to finance the 2013 Martin Scorsese financial crime caper “The Wolf of Wall Street,” which starred Leonardo DiCaprio, according to the Justice Department.
“The Department of Justice will not allow the American financial system to be used as a conduit for corruption,” US Attorney General Loretta Lynch said.
The asset seizure would be the largest ever under Washington’s 2010 Kleptocracy Asset Recovery Initiative, which targets ill-gotten gains of world leaders that pass through the US 1MDB, or 1Malaysia Development Berhad, was set up in 2009 by Najib and controlled by him in his concurrent role as finance minister. Its funds were to be invested in economic development projects.
“The Malaysian people were defrauded on an enormous scale,” said FBI Deputy Director Andrew McCabe.
Najib has repeatedly dismissed allegations of wrongdoing as political attacks by his domestic opponents, and has moved to thwart Malaysian-led investigations.
His spokesman responded to the US action by stressing on Thursday that Malaysian authorities had found no wrongdoing, while pledging to cooperate with any international probes.
“As the Prime Minister has always maintained, if any wrongdoing is proven, the law will be enforced without exception,” the spokesman said.
Prosecutors are seeking to seize film royalties from a production company owned by Najib’s stepson, Red Granite, including those generated by “The Wolf of Wall Street.”
Nearly 20 other assets have been targeted, including high-end real estate in Beverly Hills, New York, and London, artworks by Monet and Van Gogh, and a Bombardier Global 5000 business jet.
The US complaint alleged that highflying Malaysian businessman Low Taek Jho, or “Jho Low”, a close Najib family friend who helped create 1MDB, laundered hundreds of millions into the United States to fund such purchases and a lavish lifestyle.
In one eight-month span in 20092010, Low allegedly transferred $85 million to casinos in Las Vegas.
Najib is not named directly in the filings, but they refer to “Malaysian Official 1,” described as a “high-ranking official” with control over 1MDB.
The filing said “Malaysian Official 1” was the “ultimate beneficiary” of a Malaysian bank account that held tens of millions of allegedly misappropriated funds. Lynch would not explain why Najib was not explicitly named.
“We essentially allege what we need to allege in order to obtain the legal process that we’re trying to obtain,” said Lynch. “We don’t go beyond that.” The US filing has re-energised calls in Malaysia for Najib’s removal and prosecution.