The US will return a total of almost $200m to Malaysia from an international probe into funds missing from Kuala Lumpur’s state investment fund 1Malaysia Development Berhad, including money linked to the film company that produced The Wolf of Wall Street.
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The US Department of Justice has already returned about $57m linked to Red Granite Pictures, the US-based production company accused of using misappropriated 1MDB funds to finance movies, such as the 2013 Martin Scorsese film about financial excess.
The US will “soon” remit another $139m linked to the sale of a stake in New York City’s Park Lane Hotel allegedly bought using 1MDB money, Tommy Thomas, Malaysia’s attorney-general, said in a statement on Tuesday.
The reimbursements are a victory for Malaysia, which launched an immediate investigation into 1MDB — from which the DoJ alleges $4.5bn had gone missing — after Prime Minister Mahathir Mohamad ousted Najib Razak in elections last year on a platform condemning corruption.
The Mahathir government’s commitment to the probe has added to efforts in countries from the US to Singapore and Switzerland to track the alleged misuse of 1MDB funds across the globe. The US alone in the past three years has filed forfeiture complaints to seize $1.7bn in assets allegedly acquired with 1MDB proceeds.
“1MDB asset recovery efforts across the globe are still ongoing, and Malaysia is optimistic of recovering further monies in the coming months,” said Mr Thomas.
The reimbursement announcement comes one day after Roger Ng, one of two former Goldman Sachs bankers indicted by the DoJ, pleaded not guilty in Brooklyn federal court to allegations of bribery and money laundering in the 1MDB scandal, after his surprise extradition to the US from a Malaysian jail.
The first tranche of the $200m that has already been transferred to Malaysia derives from a $60m settlement paid in 2018 to the US government by Red Granite Pictures, a company co-founded by Riza Aziz, stepson of Mr Najib.
A deduction of about $3m was made from the total for investigation costs incurred by the DoJ and the FBI, according to the statement.
The $139m tranche was obtained from the sale of a stake in Manhattan’s Park Lane Hotel formerly owned by Jho Low, a Malaysian financier accused of masterminding the 1MDB scheme. A sum will also be deducted for US authorities’ investigation costs.
Mr Najib set up 1MDB in 2009 and is facing trials for alleged abuse of power, breach of trust and money laundering linked to the fund and other state entities.
Malaysia has so far recovered $322m worth of 1MDB assets since the start of investigations in May 2018, according to Mr Thomas’s statement.
Among these is a super yacht formerly owned by Mr Low, which Kuala Lumpur sold for $126m to Genting, the Malaysian casino operator. The vessel is among the many assets, including Picasso paintings and bespoke jewellery, that were allegedly purchased using proceeds siphoned from the state fund.
Singapore, one of the countries involved in the international 1MDB probe, has ordered an additional sum of S$50m (US$37m) to be credited to Kuala Lumpur, S$15m of which has already been returned. The balance will be transferred shortly, according to Mr Thomas’s statement.
Mr Najib is standing trial in Malaysia on corruption charges. Mr Riza has been questioned in connection with missing 1MDB funds, but has not been charged. Mr Low, who has been charged in connection with the missing funds remains at large. All three have denied any wrongdoing.
Mr Low’s spokesman and Mr Riza’s lawyers declined to comment on the US remittance announced on Tuesday.
Culled from Financial Times
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