Malaysia Plans Legal Moves Against Any 1MDB Defrauders, Low Saysby
U.S. Justice Department alleges embezzlement at fund
More than $3.5 billion misappropriated from 1MDB, DOJ Says
Malaysia will take legal action against those who allegedly defrauded its state investment company 1Malaysia Development Bhd. as the government seeks to defend its reputation and credibility.
The government is taking the U.S. Department of Justice’s civil complaint that mentions some Malaysians "very seriously" amid references to funds embezzled from 1MDB, Minister in the Prime Minister’s Department Paul Low said in the text of a speech prepared for delivery on Thursday.
"Should it be established that funds were taken out from 1MDB, the government will take legal action against the individuals named, or anyone else who is complicit in the scheme to allegedly defraud 1MDB," Low said. "The money – if stolen from us – must be recovered in full, and those guilty punished in accordance with our laws and those of the countries where the money was laundered."
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.
More than $3.5 billion was misappropriated from 1MDB, and about $1 billion was laundered through the U.S. banking system, the U.S. Justice Department said last month, laying out its case in a dozen filings. The alleged scheme of international money laundering and misappropriation stretched from 2009 to 2015, and money went to buy luxury real estate in the U.S., pay gambling expenses in Las Vegas and acquire $200 million in artwork, it said.
The U.S. complaint mentioned Prime Minister Najib Razak’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” movie. The Justice Department is trying to seize royalties from the film, which it said was financed with money that originated from 1MDB.
The U.S. did not name any individuals as defendants. Jho Low has said he provided consulting to 1MDB that didn’t break any laws and previous efforts to reach him were unsuccessful. Red Granite has said it’s confident that Riza and the company didn’t do anything wrong.
U.S. prosecutors also referred 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.
Najib has said the Justice Department’s action should be allowed to run its course and those accused should be permitted to defend themselves.
"The government’s credibility and reputation are in question, and therefore appropriate action must be taken against the perpetrators of the crime," Low said. "Our enforcement agencies and the Attorney General must cooperate fully with all international agencies to deal with the matter in an appropriate manner in order to allay negative perception and restore the trust and confidence of the people for the government."