“With this action, we are seeking to forfeit and recover funds that were meant to grow the Malaysian economy and support the Malaysian people”, U.S. Attorney General Loretta Lynch said in a statement.
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Federal authorities said the 16 complaints filed in Los Angeles represent the largest single action ever brought under the Justice Department’s Kleptocracy Asset Recovery Initiative.
A Bloomberg report observes that Malaysia has been a longtime ally of the United States on issues including counterterrorism and trade and that the latest development could “lay the groundwork” for tensions.
The scandal has cast a shadow over the government of Malaysian Prime Minister Najib Razak, who established the fund in an effort to promote economic investment.
The alleged offences were committed over a four-year period and involved multiple individuals, including Malaysian officials and their associates, who conspired to fraudulently divert billions of dollars from 1MDB, the lawsuits said.
The FBI as well as several other US regulators have been investigating the role of Goldman Sachs in those deals since past year, but the investigations are at an earlier stage, according to people familiar with the inquiries. “There is no Malaysian money”, he told the New York Times when questions were raised about the issue in 2014.
The Justice Department named three of those people in its filings. The federal government filed a civil lawsuit Wednesday against the makers of The Wolf of Wall Street, saying the production company used illegally appropriated money from the Malaysian people to pay for the film, as well as other perks. Another, a financier named Mr Jho Low, is a longtime friend of Mr Aziz and his family. But it was unknown what assets will be seized. Though no one faces any criminal charges at this point, Lynch said that the focus now was to “restrain the dissipation of assets” during the investigation.
The FBI has three dedicated global corruption squads-in New York City, Los Angeles, and Washington, D.C. -to deal with foreign bribery incidents that are often tied to kleptocracy, the term used when foreign officials steal from their own governments at the expense of their citizens. Al Qubaisi and Al-Husseiny could not be reached for comment.
Public concern has increased over worldwide corruption and the use of shell companies to hide assets. A day later, $577 million was wired from Falcon to an account held in the name of a shell company called Aabar-BVI, the complaint reads.
Malaysia’s ruling UNMO party will rally behind Najib and blame “foreign powers, including the Jews”, for trying to topple a democratically elected government, opposition politician Charles Santiago predicted Wednesday.
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Mr. Najib still enjoys solid support in parts of Malaysia, particularly rural areas dominated by the United Malays National Organization, which has led every Malaysian government since the country’s independence from Britain in 1957, making it one of the world’s longest-ruling political parties. She said funds diverted from one bond offering were also traced to the purchase of an interest in the Park Lane Hotel in NY.
