Malaysian Financier Jho Low Tried to Keep Yacht Outside US: Court Papers

An elusive tycoon from Malaysia accused of taking part in embezzling billions of dollars from a Malaysian state fund has been battling to keep his mega-yacht away from American authorities, U.S. court documents show.

Businessman Jho Low gave instructions for the $250-million yacht Equanimity to avoid territorial waters of known American allies, such as Australia and Singapore, as soon as news broke that a California court had ordered its seizure in June last year, U.S. attorneys said.

Indonesian and U.S. authorities impounded the Equanimity, a Cayman Islands-flagged vessel, while it was moored off the Indonesian island of Bali last month. The U.S. Department of Justice (DOJ) alleges that Low bought the luxury vessel with money stolen from the state fund known as 1Malaysia Development Berhad (1MDB).

“In the months following the issuance of the court’s [seizure order], there is significant evidence that Low instructed claimants to keep the Equanimity outside the government’s hands and outside the United States,” according to documents filed by the U.S. Department of Justice (DOJ) at a California court on Monday.

Four companies have been named in the federal court papers as claimants representing Jho Low, whose full name is Low Taek Jho.

A lawyer for one of the claimants said U.S. authorities were thinking of sailing the yacht to the United States with only eight crew members.

The DOJ sought to sail the yacht to the United States, where it would be seized and sold, but claimants said eight people could not safely operate the vessel, which has a current rotational crew of 55.

“It is my understanding from industry professionals that such a reduced number would seriously jeopardize the safety of the crew and would be disastrous for the preservation of the asset,” lawyer Naeun Rim said, according to court documents.

On June 15, 2017, the United States filed a civil forfeiture lawsuit against the vessel, claiming Low purchased it with funds “stolen and embezzled” from 1MDB.

After news broke that a California court had ordered the yacht’s seizure, the claimants hid the Equanimity in a series of foreign locations, frustrating the government’s efforts to bring the asset for forfeiture in the United States, according to the newly filed court documents.

FBI Special Agent Justin McNair, in a statement filed in court, alleged that Low had issued instructions to the vessel’s captain, via the mobile messaging application WeChat, to turn off Equanimity’s Automatic Identification System (AIS) after news got out about the yacht being targeted for seizure.

“While vessels may sometimes turn off their AIS to ‘hide’ themselves when they are in high-risk territories with serious pirate concerns, the Equanimity was not in a high-risk territory when it turned off its AIS right after new broke about (possible seizure),” McNair said.

He said another directive from Low was for the captain to avoid “major problems” by not entering U.S. territorial waters and those of certain jurisdictions, but instead keep the yacht in “safe places” like Vietnam and Cambodia.

But the claimants debunked the FBI agent’s claim, saying in court papers that the vessel employed a long-range identification and tracking system, which had never been turned off and was different from AIS.

In order to preserve the yacht’s value and to protect the rights of third parties, a California court on Monday ordered that the yacht remain in Indonesia “until a court orders otherwise.”

Pursuing criminal action

In August 2017, DOJ announced it was pursuing criminal action against those involved in the misappropriations and fraudulent diversion of funds from 1MDB, an entity wholly-owned by the Malaysian government.

The department asked the court to set aside its civil lawsuits seeking to recover more than $1.7 billion in real-estate and other assets because it was trying to protect evidence and witnesses in its criminal investigation.

1MDB, which is at the center of money-laundering investigations in at least six countries, including Switzerland and Singapore, was formed in 2009 ostensibly to pursue projects that would benefit Malaysian citizens through development projects that primarily relied on the issuance of debt securities, U.S. officials said.

Money from the fund was used instead to feed the ostentatious lifestyle of those with power over it during a five-year period, between 2009 and 2014, according to court documents.

Low, who has been identified in court documents as an adviser on the creation of TIA, the predecessor entity of 1MDB, has publicly denied any involvement with the state fund after its inception. His current whereabouts remain unknown.

The state fund has also been tied to corruption allegations surrounding Prime Minister Najib Razak, who founded 1MDB. He has denied any wrongdoing in connection with deposits into his private bank accounts of nearly U.S. $700 million in money linked to the fund.

Jho Low has never held a formal position at the state fund but he “nevertheless exercised significant control over 1MDB” during the acquisition of the Equanimity, according to the DOJ lawsuit.

The yacht, built in 2014 in Rotterdam, Netherlands, is equipped with a helicopter landing pad, an onboard gymnasium, a cinema, a massage room, a sauna and a plunge pool, court documents said.

Funds used to buy the Equanimity were diverted from 1MDB and funneled through a bank account controlled by Low “in a manner intended to conceal the origin, source, and ownership of the criminal proceeds,” DOJ said in its lawsuit.

“Low knew those funds were misappropriated from 1MDB,” the department said.