Updated at 12:06 p.m. ET on 2020-07-03
United States justice officials have announced their efforts to recover another U.S. $96 million in assets, including paintings by Claude Monet and Andy Warhol as well as high-end Parisian properties, purchased allegedly with money misappropriated from Malaysian fund 1MDB.
This comes as questions surround the new government in Putrajaya over whether it is serious about prosecuting cases linked to beleaguered state development fund 1Malaysia Development Berhad, including those involving former Prime Minister Najib Razak. More than $4.5 billion was embezzled from the fund founded by Najib in 2009 to jump start economic development in Malaysia, officials with the U.S. Department of Justice have alleged.
“The complaints filed today in the Central District of California identify additional assets traceable to the 2012 and 2013 bond offerings. These assets include luxury real estate in Paris, artwork by Claude Monet and Andy Warhol and accounts maintained at financial institutions in Luxembourg and Switzerland,” the DOJ said in a news release issued Wednesday.
“These seemingly endless civil forfeiture complaints associated with the 1MDB scandal are representative of the seemingly endless schemes used to hide and launder money as part of the sophisticated efforts to steal from the Malaysian people,” Don Fort, chief of the Criminal Investigation department at the U.S. Internal Revenue Service, said in the release.
Fort said the forfeiture complaints would return millions more to Malaysia.
“[W]here it belongs and where it can finally be used for its original intended purpose – to improve the lives of everyday Malaysians,” he said.
The leader of the Malaysian Anti-Corruption Commission said he had been in touch with U.S. investigators.
“We were aware of the DOJ action before the announcement was made. We are always in contact related to 1MDB case,” MACC chief Azam Baki told BenarNews on Thursday.
He said Malaysia had established an international task force in 2018 with the U.S., Switzerland, Singapore, Canada, Luxembourg and other countries related to the 1MDB investigation in connection with international investigations into billions of dollars that went missing from the fund.
Previously, officials had said that 1MDB money was believed to have been laundered through financial institutions in several jurisdictions including several of the countries mentioned above.
Charges dropped against Najib relative
Meanwhile, Malaysian Prime Minister Muhyiddin Yassin, who took office in March, and his government have been criticized for 1MDB-related issues following a decision by prosecutors to discharge criminal money-laundering charges against Najib’s stepson, Reza Aziz.
Reza who allegedly used funds to set up a film production company, Red Granite, which produced the Academy Award-nominated film “The Wolf of Wall Street,” struck a deal with the government to forfeit about $107 million of 1MDB assets.
Muhyiddin said he did not have a role in the deal.
In a blog post on June 25, Mahathir Mohamad, who succeeded Najib as prime minister in 2018 after his Pakatan Harapan coalition pulled off an election upset, alleged that Muhyiddin was planning to free Najib from all 1MDB-related charges.
“Far from fulfilling his pledge to bring down Najib, Muhyiddin is now trying to ensure Najib is exonerated from all charges and will be able to contest in the upcoming election. Najib then would no longer need Muhyiddin, because Najib himself is hoping to be the prime minister once more,” Mahathir said.
Muhyiddin took over as unelected prime minister after Mahathir resigned from the post and his government collapsed, when Muhyiddin and other MPs quit the coalition to form a new alliance with other parties including Najib’s United Malays National Organization (UMNO). Since then, Mahathir has sought to have Muhyiddin removed from the top government office.
Najib, for his part, faces a total of 42 criminal counts linked to abuse of power and money laundering connected to 1MDB and a subsidiary. He could face decades in prison if convicted.
The former prime minister is awaiting a July 28 verdict on seven charges linked to a 1MDB subsidiary, SRC International, and continues to stand trial on 25 charges linked to 1MDB.
The 1MDB trial was to resume on Thursday but the Kuala Lumpur High Court agreed to Najib’s request for a delay to allow him to campaign in Chini in Pahang state to increase voter turnout in a by-election for a state government seat. The 1MDB trial is to resume July 15.
In addition, Najib is standing trial for alleged abuse of power in tampering with 1MDB audit report along with Arul Kanda Kandasamy, the fund’s former CEO.
To date, the Department of Justice has turned over $620 million to Malaysia from the liquidation of assets, including those that financier Low Taek Jho, better known as Jho Low, agreed to return as part of a settlement with the DOJ in 2019.
The agreement did not constitute an admission of guilt or liability on the part of Low or the asset owners, an attorney for Low said in a message to BenarNews. "Mr. Low maintains he has engaged in no wrongdoing in relation to 1MDB," the attorney, Benjamin Haslem, wrote.
The subject of an international manhunt, Low faces criminal charges in Malaysia for his role in allegedly embezzling billions of dollars from 1MDB through his relationship with Najib.
This report has been updated to include a statement from an attorney for Low Taek Jho.