Suits targeting those who allegedly siphoned off 1MDB funds

PETALING JAYA: The civil suits by the US Department of Justice are seeking to seize US$1bil (RM4.02bil) worth of assets allegedly obtained using funds siphoned from 1Malaysia Development Bhd (1MDB).

The lawsuits filed on Wednesday are seeking to recover assets belonging to several high-profile individuals closely linked to the state investment arm that was set up in 2009.

In the 136-page document, US prosecutors led by Attorney-General Loretta Lynch alleged that the individuals had conspired to launder US$3.5bil (RM14.07bil) from 1MDB to fund their lifestyles.

The individuals, some of whom were named while the identities of several others were withheld, had reportedly used a host of offshore bank accounts and shell companies to conceal their activities over a four-year period beginning 2009.

The lawsuits were submitted by the Justice Department’s Kleptocracy Asset Recovery Initiative, which deals specifically with the seizure of proceeds obtained from foreign corruption.

Among the allegations in the lawsuits is that US$681mil (RM2.74bil) was transferred to a personal bank account of “Malaysian Official 1”.

The official complaint also revealed that from October 2009 to June 2010, more than US$85mil (RM342mil) was spent by the individuals concerned on gambling in Las Vegas, jet rentals, yachts and other payments.

It said that the US$150mil (RM603mil) used for luxury properties in New York and California came from 1MDB’s collapsed joint venture deal with PetroSaudi International, as did US$44.8mil (RM180mil) to buy a hotel in Beverly Hills and US$35.4mil (RM142mil) for a jet.

It was alleged that money from the Goldman Sachs bond deals was used to purchase US$130mil (RM522.6mil) worth of artwork at auction, as well as an interest in the music rights of EMI.

“The funds diverted from 1MDB were used for the personal benefit of the co-conspirators and their relatives and associates, including to purchase luxury real estate in the United States, pay gambling expenses at Las Vegas casinos, acquire more than US$200mil (RM804mil) to invest in a major New York real estate project and fund the production of major Hollywood films.

“1MDB maintained no interest in these assets and saw no returns on these investments,” the suits read.

A key individual named in the official complaint by U.S. prosecutors was Riza Aziz, who is the stepson of Prime Minister Datuk Seri Najib Tun Razak. Riza is the founder of Red Granite Pictures, which produced the Oscar-nominated The Wolf of Wall Street in 2013.

Others named in the suits included prominent Malaysian businessman Low Taek Jho, better known as “Jho Low”, and Abu Dhabi government officials Khadem Abdulla Al-Qubaisi and Mohammed Ahmed Badawy Al-Husseiny as “relevant individuals” in the case.

Al-Qubaisi and Al-Husseiny were former officials at a sovereign wealth fund in the United Arab Emirates that was involved in deals with 1MDB in that period.