US seeks to recover over RM1.2b 1MDB-linked assets in UK

Combined with civil forfeiture complaints filed in July 2016, the US has sought the forfeiture of over RM8.7b in assets


THE US Department of Justice (DoJ) is seeking to recover more than US$300 million (RM1.24 billion) of assets allegedly linked to 1Malaysia Development Bhd (1MDB) mostly held in the UK.

The DoJ, in a statement said it has filed civil forfeiture complaints to recoup the assets that include 48 promotional movie posters acquired by Riza Shahriz Abdul Aziz (picture) with more than US$4 million in funds traceable to assets embezzled from 1MDB and an escrow account maintained in the UK holding more than US$300 million.

The US prosecutor said the funds in the escrow account are traceable to a line of credit extended by Petroleos de Venezuela SA to PetroSaudi Oil Services Ltd in connection with the use of two drillships that PetroSaudi acquired with funds fraudulently obtained from 1MDB. Combined with earlier civil forfeiture complaints filed beginning in July 2016, the US has sought the forfeiture of over US$2.1 billion in assets traceable to funds embezzled from 1MDB.

The US has recovered or assisted Malaysia in recovering nearly US$1.1 billion in assets associated with the 1MDB international money laundering and bribery scheme, representing collectively the largest action brought under the department’s Kleptocracy Asset Recovery Initiative, as well as the largest civil forfeiture action ever instituted in the DoJ’s history.

According to the complaints, from 2009 through 2015, more than US$4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates.

“As alleged in the complaints, the members of the conspiracy — which included officials at 1MDB, their relatives and other associates — diverted more than US$4.5 billion in 1MDB funds.

“Using fraudulent documents and representations, the co-conspirators allegedly laundered the funds through a series of complex transactions and shell companies with bank accounts located in the US and abroad,” the DoJ said in the statement.

It added that, as alleged in the earlier complaints, in 2009, 1MDB officials and their associates embezzled approximately US$1 billion that was supposed to be invested to exploit energy concessions purportedly owned by a foreign partner.

Instead, the DoJ said the funds were allegedly transferred through shell companies and were used to acquire several assets.

The complaints also alleged that the co-conspirators misappropriated close to US$1.4 billion in funds raised through bond offerings in 2012, and more than US$1.2 billion following another bond offering in 2013.

The DoJ further said the complaints also alleged that in 2014, the co-conspirators misappropriated approximately US$850 million in 1MDB funds under the guise of repurchasing certain options that had been given in connection with a guarantee of the 2012 bonds.

Earlier this month, Riza Shahriz, the stepson of former Prime Minister Datuk Seri Mohd Najib Razak, agreed to forfeit assets worth over US$60 million linked to 1MDB in a settlement with the DoJ.

The DoJ said the assets that were subject to the settlement included the sale proceeds of a high-end real estate acquired in Beverly Hills, a luxury condominium in New York City, the sale proceeds of an investment made by Riza Shahriz in a Kentucky-based maintenance company, a luxury London townhouse and a promotional poster for the 1927 motion picture film “Metropolis”.

Riza Shahriz, the producer of “The Wolf of Wall Street”, was discharged not amounting to an acquittal on money-laundering charges involving US$248 million allegedly linked to 1MDB in May.