USA TODAY International Edition
FEDS MOVE TO SEIZE ‘ WOLF OF WALL STREET’ PROFITS
Billions of dollars allegedly diverted from Malaysian sovereign wealth fund for luxury, gambling, personal use
The Department of Justice on Wednesday moved to seize roughly $ 1 billion in assets, including future proceeds from the 2013 film The Wolf of Wall Street, Old Masters art works and U. S. luxury real estate in an international corruption investigation targeting officials who allegedly profited off of a Malaysian sovereign wealth fund, possibly including the country’s prime minister.
Conspirators allegedly misappropriated more than $ 3.5 billion from 1Malaysia Development Berhad ( 1MDB) in a vast money laundering scheme from 2009 through 2013 and then used a network of shell companies to buy U. S. mansions and luxury condominiums, pay gambling expenses at Las Vegas casinos, purchase paintings by Van Gogh and Monet and finance other personal expenses, investigators alleged.
Federal officials said the case represents the largest attempted seizure under anti- kleptocracy laws in U. S. history.
“It should make clear to corrupt officials around the world that we will be relentless in our efforts to deny them the proceeds of their crimes,” Attorney General Loretta Lynch told reporters in a news conference.
The complex case revolves around accusations that certain corrupt Malaysian officials — including possibly Prime Minister Rajib Nazak — conspired to divert 1MDB capital that was supposed to benefit Malaysia’s economy as assets for their personal enrichment, entertainment and daily comfort.
Among the assets the government is seeking are the L’Ermitage Hotel in Beverly Hills, rights to the Wolf of Wall Street film starring Leonardo DiCaprio, multiple Beverly Hills mansions, sev- eral New York City luxury condominiums, rights to EMI Publishing songs, a Bombardier jet and a quarter- billion dollars in capital invested in New York’s Park Lane hotel.
While Lynch declined to say whether Najib is a target of the probe or suspected of involvement, the forfeiture complaint filed in a federal court Wednesday describes one beneficiary of the corruption, “Malaysian official 1,” as someone who had the powers typically ascribed to Najib.
Those named include Malaysian national Riza Shahriz Bin Abdul Aziz, co- founder of Hollywood studio Red Granite Pictures; Malaysian national “Eric” Tan Kim Loong, holder of bank accounts that received 1MDB assets; United Arab Emirates national Khadem Abdulla Al Qubaisi; and U. S. citizen Mohamed Ahmed Badawy Al- Husseiny. FBI deputy director Andrew McCabe told reporters the investigation is ongoing, suggesting it could yet ensnare individuals in civil or criminal charges. For now, the government’s case focuses exclusively on seizing assets, such as Red Granite’s rights to Wolf of Wall Street, which was allegedly financed using $ 64 million in 1MDB funds. “We will not allow the United States to become a playground for the corrupt,” Los Angeles- based U. S. Attorney Eileen Decker said. In a statement, 1MDB said it was not a party to the Department of Justice action, has no U. S. assets and didn’t benefit from the alleged transactions. The fund added that it would “fully cooperate with any foreign lawful authority, subject to international protocols governing such matters and the advice of the relevant domestic lawful authorities.” The initial diversion involved purported investment in a joint venture between 1MDB and a private Saudi oil extraction company called PSI, the complaint charged. An estimated $ 1 billion in 1MDB funds allegedly flowed to a Swiss bank account held in the name of Good Star Limited. Contrary to representations by 1MDB officials, the account was beneficially owned by Low Taek Jho, a Malaysian national who had no formal position with the fund but was involved in its creation, the complaint charged. Low laundered more than $ 400 million into the U. S. for the “personal gratification of Low and his associates,” the filing alleged.
“We will not allow the United States to become a playground for the corrupt.” Eileen Decker, Los Angeles- based U. S. Attorney
Subsequent alleged diversions include a substantial portion of the proceeds 1MDB raised through two bond offerings arranged and underwritten by U. S. investment bank Goldman Sachs. The bonds were guaranteed by both the Malaysian fund and an investment entity owned by the government of Abu Dhabi.
Officials of 1MDB wired approximately $ 1.367 billion, or more than 40% of the net proceeds raised by the bond offerings, to a Swiss bank account belonging to a British Virgin Islands entity known as Aabar Investments, the complaint charged. Some of the money was diverted to a Singapore bank account controlled by Tan Kim Loong, an associate of Low, and “distributed for the personal benefit of various individuals,” the complaint alleged.
Additonally, officials of 1MDB and other individuals allegedly diverted more than $ 1.26 billion from a third bond offering Goldman Sachs arranged in 2013. The diverted funds were laundered through a complex series of transactions that in some cases involved bank accounts in the U. S., Singapore, Switzerland and Luxembourg, the complaint charged.
Balance sheets for Red Granite Pictures allegedly showed no payments indicating any investment return to 1MDB from The Wolf of Wall Street, which ironically depicted the real- life corruption downfall of stockbroker Jordan Belfort.
Lynch said the government currently is seeking only about $ 1 billion in assets because that’s how much investigators have been able to conclusively trace. Some of the rest may be traceable elsewhere or may have been “dissipated” already — that is, spent in various ways and thus not retrievable.