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US Moves to Seize Assets Allegedly Bought with Stolen Malaysian Funds

by Ken Bredemeier July 20, 2016

The United States is trying to seize more than a billion dollars' worth of luxury real estate, artwork and jewelry that authorities allege was bought with assets stolen from a Malaysian state fund.

The U.S. Justice Department filed lawsuits in Los Angeles claiming officials close to embattled Prime Minister Najib Razak diverted more than $3.5 billion from the fund from 2009 to 2013, using money intended for economic development projects in the southeast Asian country to buy the U.S. properties and pay for lavish parties, gambling and entertainers.

The lawsuits did not name Najib, the focus of rising popular discontent amid investigations in Malaysia and elsewhere over the fund he oversees, called 1Malaysia Development Berhad, or 1MBD.

But the suits named his step-son, Riza Aziz, a Hollywood movie producer, as a "relevant individual." A Malaysian financier, Jho Low, and Abu Dhabi government officials Khadem al-Qubaisi and Mohamed Ahmed Badawy al-Husseiny were also named in the lawsuits.

The U.S. alleges that some of the misappropriated money was used by Aziz to finance production of a popular 2013 U.S. movie "The Wolf of Wall Street," a fictionalized account of a real-life Wall Street swindler.

The people named in the lawsuits have not been charged with crimes, but criminal charges could still be brought.

The suits allege that most of the misappropriated funds from 1MBD were moved to the co-founder of PetroSaudi International, an oil company that had a joint venture with 1MBD, and then to a high-ranking official with the Malaysian government it identified only as "Malaysian Official One."

The suits said the stolen funds were used to buy penthouses, mansions, artwork and a private jet. The lawsuits allege the misappropriated funds paid for "lavish lifestyles," including the hiring of musicians and for celebrities to attend parties.

The U.S. case was brought by the Justice Department's Kleptocracy Asset Recovery Initiative. The United States is among several governments that have investigated 1MBD, including Malaysia, Singapore and Switzerland.