The US Department of Justice said Wednesday it has filed a complaint seeking forfeiture of more than $1 billion of assets acquired by Malaysian economic development fund 1 Malaysia Development Bhd., better known as 1MDB, that allegedly were purchased with misappropriated funds.
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The Justice Department filed civil complaints on Wednesday and Attorney General Loretta Lynch was expected to discuss the forfeiture demands at a news conference.
Pressure mounted on Thursday on Malaysian Prime Minister Najib Razak, with lawmakers demanding he go on leave and be held accountable after U.S. officials initiated action to seize more than $1 billion they say was stolen from a state investment fund by people close to the premier.
Najib’s family has been entangled in various alleged links to 1MDB funds, alongside a separate donation scandal that has caused more than a year of political tension in Malaysia.
Najib has consistently denied any wrongdoing in relation to 1MDB dealings. As part of the civil action, the Justice Department is seeking to seize future royalties due Red Granite from its investment in the movie. On Wednesday, US prosecutors launched a bid to recover over $1 billion (CHF1 billion) allegedly stolen from the Malaysian sovereign wealth fund.
An estimated $64 million in diverted funds was allegedly used to Red Granite Pictures, a California-incorporated movie studio that produced “The Wolf of Wall Street”, “Friends with Kids”, and “Dumb and Dumber To”. Most of the real estate has been linked to Malaysian Prime Minister Najib Razak’s stepson Riza Aziz and close associate Jho Low.
According to The Hollywood Reporter, federal authorities are targeting more than $1 billion in assets allegedly diverted by officials in the country through an investment fund and then into shell companies. Now back in the spotlight, the rollicking tale of drugs, sex and money laundering should make tens of millions of dollars more, industry analysts say.
Some of the misappropriated 1MDB funds “are directly traceable to a $700 million wire transfer and $330 million wire transfer unlawfully diverted from 1MDB to the Good Star Account”, owned by Jho Low, one of the lawsuits alleged.
The move to seize the funds, which is subject to what could be lengthy legal proceedings, emerges from a 2010 Justice Department anti-kleptocracy initiative meant to confiscate the ill-gotten gains of world leaders which pass through the United States.
Yeo Jiawei, former wealth planner with BSI Singapore, charged with money laundering following investigations into 1MDB’s money flows. Stronger laws and more effective frameworks for global cooperation are needed to close these gaps and overcome the challenges faced by law enforcement when we investigate worldwide corruption, money laundering and other cross-border crimes.
“We helped raise money for a sovereign wealth fund that was created to invest in Malaysia”.
The lawsuits do not name Prime Minister Najib Razak, who established the fund when he came into office. He added that $100 million was used to finance the film and “neither 1MDB nor the Malaysian people saw a penny of the profit from that film”.
Responding to the allegations in a statement issued yesterday afternoon, the company said its executives did not knowingly use illicit funds, United States entertainment news magazine Variety reports.
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In a statement, Red Granite said that to its knowledge, none of the funding it received four years ago was illegitimate and that co-founder Riza Aziz and the company did nothing wrong.
