US recovers over RM211m in 1MDB funds

The US govt has recovered or assisted in the recovery of nearly RM4.8b in assets associated with the 1MDB

by NG MIN SHEN/ pic by AFP

THE US has reached a settlement to recoup over US$49 million (RM211.68 million) in stolen monies relating to the Malaysian investment development fund 1Malaysia Development Bhd (1MDB).

The US Department of Justice (DoJ) said it has settled its civil forfeiture cases against assets acquired by former International Petroleum Investment Co (IPIC) MD Khadem Al-Qubaisi using funds allegedly misappropriated from 1MDB and laundered through financial institutions in several jurisdictions including the US, Switzerland, Singapore and Luxembourg.

“These assets are estimated to be worth over US$49 million. With the conclusion of this settlement, together with the prior disposition of other related forfeiture cases, the US has recovered or assisted in the recovery of nearly US$1.1 billion in assets associated with the 1MDB international money laundering and bribery scheme,” it said in a statement on Wednesday.

According to DoJ estimates, over US$4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level 1MDB officials and their associates, including Al-Qubaisi between 2009 and 2015 in a criminal conspiracy involving international money laundering and bribery.

1MDB was formed by the Malaysian government under former Prime Minister (PM) Datuk Seri Mohd Najib Razak to promote economic development in the country through global partnerships and foreign direct investment.

Al-Qubaisi was reportedly sentenced to prison for 15 years in 2019, according to a Wall Street Journal report citing sources. Under his leadership, IPIC guaranteed bonds for 1MDB in 2012 with Goldman Sachs Group Inc as an arranger.

“As alleged in the forfeiture complaints, Al-Qubaisi and others laundered billions of dollars embezzled from 1MDB,” assistant AG Brian A Benczkowski (picture) of DoJ’s Criminal Division said.

Instead of benefitting Malaysians as intended, the money was used by the alleged co-conspirators to finance lavish acquisitions of personal property, luxury real estate and business investments in the US and elsewhere.

“This settlement agreement ensures that nearly US$50 million in stolen funds will be recouped, and sends a clear signal that the DoJ is committed to tracing, seizing, and forfeiting criminal proceeds that are laundered through the US financial system,” Benczkowski added.

It also represents the largest recovery to date under the department’s Kleptocracy Asset Recovery Initiative and the largest civil forfeiture ever concluded by DoJ. Under the terms of the settlement, the Atlantic Property Trust (APT), which oversees the assets at issue in these forfeiture actions, agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest.

The trustee, who is Al-Qubaisi’s wife, is also required to cooperate and assist DoJ in the orderly transfer, management and disposition of the relevant assets.

The assets subject to the settlement agreement include the sale proceeds of high-end real estate acquired in Beverly Hills as well as a luxury penthouse in New York City that Al-Qubaisi allegedly acquired with funds traceable to misappropriated 1MDB monies.

The assets being forfeited subject to this settlement are in addition to the more than US$1 billion in assets the US previously forfeited in connection with the DoJ’s 1MDB investigation.

Several civil forfeiture complaints arising from the 1MDB conspiracy remain pending against assets associated with other alleged co-conspirators, the DoJ said.

The trial of Najib, who is facing corruption and money laundering charges involving RM2.3 billion worth of 1MDB funds, resumes next Wednesday (May 13).

Proceedings were adjourned on March 12 following concerns that the PM’s defence team may have been exposed to the Covid-19 virus.