A Malaysian sovereign wealth fund has rejected US Justice Department allegations over money laundering and alleged theft of a treasure trove of assets including diamonds, a yacht and private jet and penthouse apartments. The Malaysian government-controlled fund known informally as 1MDB and other officials in Kuala Lumpur insisted today that there was no proof linking the fund to such crimes. The US Justice Department yesterday filed a civil case seeking recovery of $ 540 million in assets that it says were stolen from 1MDB, a fund intended to promote economic development projects. Overall, the Justice Department alleges that more than $ 4.5 billion has been stolen from the fund.
In a 250-page filing for the US District Court in Central California, the Justice Department outlined in detail the allegations of a complex money laundering scheme intended to enrich top-level officials of the fund, including some close to Malaysian Prime Minister Najib Razak. The 1MDB case is the largest single action the Justice Department has taken under its Kleptocracy Asset Recovery Initiative, which seeks to recover foreign bribery proceeds and embezzled funds. Several other countries including Singapore and Switzerland are conducting probes.
Last summer, prosecutors moved to recover more than $ 1 billion diverted from the fund to pay for properties in New York and California, a $ 35 million jet, art by Vincent Van Gogh and Claude Monet and other wealth used to help finance the movies, “Dumb and Dumber To” and “The Wolf of Wall Street,” which was produced by Red Granite Pictures, a studio co-founded by Najib’s stepson. The Justice Department filing drew vehement objections from Malaysia, where Attorney General Mohamed Apandi Ali said there was no evidence that money was misappropriated from 1MDB.
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Apandi also expressed “strong concerns” over suggestions Najib, who has not been named in civil cases related to 1MDB, engaged in criminal acts. The attorney general said Malaysia will uphold the “rule of law” and take action if there is sufficient evidence of wrongdoing. 1MDB likewise said there was no documentary proof or witnesses’ statements to support the Justice Department’s claim. “1MDB highlights that it is not a party to the civil lawsuit nor has it been contacted by the DOJ in relation to this matter,” the fund said in a statement.
Najib’s press secretary Tengku Sariffuddin separately voiced concern that the Justice Department didn’t seek cooperation from the Malaysian government or 1MDB. “We are also concerned by the unnecessary and gratuitous naming of certain matters and individuals that are only relevant to domestic political manipulation and interference. This suggests a motivation that goes beyond the objective of seizing assets,” he said, without elaborating. The Justice Department’s court filing shows much of the wealth in question was moved through offshore dealings and bank accounts in Singapore, Switzerland, Luxembourg and the U.S. The evidence cited includes details of wire transfers of hundreds of millions of dollars.