- Domestic probes have found no wrongdoing, government says
- 1MDB remains subject of police investigation in Malaysia
Malaysia’s government said it will cooperate with lawful investigations of local companies or its citizens, as U.S. prosecutors seek to seize $1 billion in assets they say are linked to a fraud trail leading from a Malaysia state fund.
“As the prime minister has always maintained, if any wrongdoing is proven, the law will be enforced without exception,” Tengku Sariffuddin, press secretary to premier Najib Razak, said in an e-mailed statement on Thursday.
1Malaysia Development Bhd., or 1MDB, has been the focus of multiple probes in Malaysia and a comprehensive review by the country’s attorney general found no crime was committed, Najib’s office said in the statement. 1MDB remains the subject of an investigation by Malaysian police, it said.
More than $3.5 billion was misappropriated from the fund, and about $1 billion was laundered through the U.S. banking system, the U.S. Justice Department said, laying out its case in a dozen filings Wednesday. The alleged scheme of international money laundering and misappropriation stretched from 2009 to 2015, it said.
The civil suit seeking the seizure of the assets says some funds were used for the personal benefit of Malaysian public officials and their relatives and associates. Money went to buy luxury real estate in the U.S., pay gambling expenses in Las Vegas and acquire $200 million in artwork, prosecutors said.
1MDB is at the center of several international investigations into alleged corruption and money laundering by public officials. Prosecutors in at least four countries -- Singapore, Switzerland, Luxembourg and the U.S. -- are looking into money flows from the investment vehicle, which was established for national development.
The U.S. complaint mentioned Najib’s stepson, Riza Aziz, and a Malaysian financier, Low Taek Jho, who is known as Jho Low. Riza partly owns Red Granite Pictures, a Hollywood production company that backed “The Wolf of Wall Street.”
The U.S. move lays the groundwork for tension with Malaysia, a longtime ally on issues including counterterrorism and trade. Malaysia is a member of the U.S.-led Trans-Pacific Partnership trade pact. U.S. President Barack Obama and Najib have met several times and have played golf together.
Malaysia Communications Minister Salleh Said Keruak urged caution on any claims related to 1MDB. The fund has been the subject of unprecedented politically-motivated attacks aimed at unseating Najib, Salleh said Thursday in a statement via state news agency Bernama.
“Any claims relating to 1MDB must be treated with caution, follow due legal process and adhere to the principle of ‘innocent until proven guilty’,” he said. “No one should rush to judgment before allegations are proven in court.”
U.S. prosecutors refer to a top Malaysian official who controlled accounts that received hundreds of millions of dollars. The official isn’t accused of wrongdoing. The anonymous description lines up with that of Najib, who until a few months ago served as the chairman of 1MDB’s advisory board.
Najib has previously acknowledged receiving almost $700 million in his personal bank accounts before the 2013 general election. He said the money was a personal donation from the Saudi Arabian royal family and most of the money was later returned. He was cleared by the attorney-general of any graft over the case.
“Unfortunately and tragically, a number of corrupt officials treated this public trust as a personal bank account,” Attorney General Loretta Lynch said at a briefing in Washington. The civil action and asset seizures represent the “largest single action ever brought” by the Justice Department’s six-year-old Kleptocracy Asset Recovery Initiative, she said.
Lynch declined to comment on the identity of the unnamed top Malaysian official.
1MDB said in a statement it will cooperate with investigators and had not been contacted by the Justice Department. It said it “is not a party to the civil suit, does not have any assets in the United States of America, nor has it benefited from the various transactions described in the civil suit.”