The US will return $196 million to Malaysia from seized assets during an investigation into the theft of $4.5 billion from state investment fund 1Malaysia Development Berhad (1MDB).
1MDB is a Malaysian state-owned and controlled fund created to pursue investment and development projects for the economic benefit of the country. Between approximately 2009 and 2014, an estimated $4.5 billion was allegedly misappropriated and fraudulently diverted from 1MDB.
Tommy Thomas, Malaysia’s attorney general, said that the country had already received its first tranche of returned funds under the US Department of Justice’s (DOJ) Kleptocracy Asset Recovery Initiative, which totaled just over $57 million. The amount forfeited came from Red Granite Pictures, a US-based film production company linked to former Malaysian Prime Minister Najib Razak and his stepson Riza Aziz.
Thomas also said the DOJ is in the process of remitting another $139 million, which came from the sale of a stake in Manhattan’s Park Lane Hotel that was owned by Malaysian financier Jho Low. Low, along with Ng Chong Hwa, was indicted in US federal court in November for conspiring to launder billions of dollars embezzled from 1MDB, and to pay hundreds of millions of dollars in bribes.
According to court documents, Low, Ng, and others conspired to bribe government officials in Abu Dhabi and Malaysia, including at 1MDB, to obtain and retain lucrative business for an unnamed major New York-based financial institution. They also allegedly conspired to launder the proceeds of their criminal conduct through the US financial system by purchasing, among other things, luxury residential real estate in New York City and elsewhere, and artwork from a New York-based auction house, and by funding major Hollywood films.
Low’s close relationships with high-ranking government officials in Malaysia and Abu Dhabi were allegedly central to the embezzlement scheme, and the co-conspirators allegedly used Low’s relationships to obtain and retain business for the financial institution through the promise and payment of hundreds of millions of dollars in bribes. As a result of its work for 1MDB, the financial institution allegedly received approximately $600 million in fees and revenues.
Malaysia has so far recovered $322 million worth of 1MDB assets since it launched an investigation in May 2018. A separate sum of SGD50 million ($36.6 million) of funds traceable to 1MDB have been ordered by the Singapore Courts to be repatriated.
“1MDB asset recovery efforts across the globe are still ongoing,” said Thomas in a release, “and Malaysia is optimistic of recovering further monies in the coming months.”
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Tags: 1Malaysia Development Berhad, Jho Low, Malaysia, New York, Ng Chong Hwa, Pension