It’s becoming tight for Mr. Najib: US launches corruption probe

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Najib with flagThe scandal surrounding alleged corruption at Malaysia’s state fund 1Malaysia Development Berhad (1MDB) has seemingly reached a point of no return. After US authorities started to look into Malaysia Prime Minister Najib Razak’s assets and the global trails his money movements left, it appears he is now finally standing with his back to the wall.

No sacking of domestic official investigators, state prosecutors and deputy prime ministers or threatening or arresting critics, media and whistleblowers will help in this case. Facing a US corruption inquiry is a serious issue, and if investigators – or Swiss, Singapore, Hong Kong and UK authorities, which are also probing the case – indeed find irregularities and/or indications of money laundering, then there is a possibility that Najib could be arrested by Interpol if he goes overseas.

The prime minister is scheduled to visit New York later this week for the opening of the United Nations General Assembly.

While, legally, the presumption of innocence applies to him as to anyone else unless otherwise proven, Najib and his circles in the government and in the executive probably have to blame a lot of the attention they stirred up to their own actions. If his administration has nothing to hide, it certainly isn’t behaving that way. The September 18 arrest of main critic Khairuddin Abu Hassan on his way from Kuala Lumpur to New York to visit FBI agents wasn’t a very smart move, rather a signal of extreme distress within Najib’s circles, and capped it all off.

Now, not just the FBI, but also a unit of the US Justice Department with the wonderful title “Kleptocracy Asset Recovery Initiative” are investigating the case. The latter is preparing a corruption inquiry by a federal grand jury. They can do that because money, the dubious “donation” of $680 million from a mysterious Middle Eastern patron into Najib’s private bank account at AmBank Malaysia, was routed through Wells Fargo, a US bank, and thus, the process falls under US jurisdiction.

Wells Fargo’s international branch in New York was routing the money as per instructions of the Singapore branch of Falcon Private Bank, the private banking arm of Abu Dhabi’s Aabar Investments. The US bank got involved as Falcon used an offshore company domiciled on the British Virgin Islands for the money transfer. Documents on the transaction can be found here.

The corruption inquiry will also focus on properties in the US that were purchased in recent years by shell companies that belong to the prime minister’s stepson as well as other real estate connected to a family friend, people close to the investigation said. In particular, the inquiry looks into a $31-million penthouse bought in the Time Warner Center at New York’s Columbus Circle, a $33-million penthouse in nearby Park Laurel luxury condominium tower and a $17-million villa in Beverly Hills.

The Malaysian prime minister is paid an officially gross salary of about $100,000 a year.

 

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Reading Time: 2 minutes

The scandal surrounding alleged corruption at Malaysia’s state fund 1Malaysia Development Berhad (1MDB) has seemingly reached a point of no return. After US authorities started to look into Malaysia Prime Minister Najib Razak’s assets and the global trails his money movements left, it appears he is now finally standing with his back to the wall.

Reading Time: 2 minutes

Najib with flagThe scandal surrounding alleged corruption at Malaysia’s state fund 1Malaysia Development Berhad (1MDB) has seemingly reached a point of no return. After US authorities started to look into Malaysia Prime Minister Najib Razak’s assets and the global trails his money movements left, it appears he is now finally standing with his back to the wall.

No sacking of domestic official investigators, state prosecutors and deputy prime ministers or threatening or arresting critics, media and whistleblowers will help in this case. Facing a US corruption inquiry is a serious issue, and if investigators – or Swiss, Singapore, Hong Kong and UK authorities, which are also probing the case – indeed find irregularities and/or indications of money laundering, then there is a possibility that Najib could be arrested by Interpol if he goes overseas.

The prime minister is scheduled to visit New York later this week for the opening of the United Nations General Assembly.

While, legally, the presumption of innocence applies to him as to anyone else unless otherwise proven, Najib and his circles in the government and in the executive probably have to blame a lot of the attention they stirred up to their own actions. If his administration has nothing to hide, it certainly isn’t behaving that way. The September 18 arrest of main critic Khairuddin Abu Hassan on his way from Kuala Lumpur to New York to visit FBI agents wasn’t a very smart move, rather a signal of extreme distress within Najib’s circles, and capped it all off.

Now, not just the FBI, but also a unit of the US Justice Department with the wonderful title “Kleptocracy Asset Recovery Initiative” are investigating the case. The latter is preparing a corruption inquiry by a federal grand jury. They can do that because money, the dubious “donation” of $680 million from a mysterious Middle Eastern patron into Najib’s private bank account at AmBank Malaysia, was routed through Wells Fargo, a US bank, and thus, the process falls under US jurisdiction.

Wells Fargo’s international branch in New York was routing the money as per instructions of the Singapore branch of Falcon Private Bank, the private banking arm of Abu Dhabi’s Aabar Investments. The US bank got involved as Falcon used an offshore company domiciled on the British Virgin Islands for the money transfer. Documents on the transaction can be found here.

The corruption inquiry will also focus on properties in the US that were purchased in recent years by shell companies that belong to the prime minister’s stepson as well as other real estate connected to a family friend, people close to the investigation said. In particular, the inquiry looks into a $31-million penthouse bought in the Time Warner Center at New York’s Columbus Circle, a $33-million penthouse in nearby Park Laurel luxury condominium tower and a $17-million villa in Beverly Hills.

The Malaysian prime minister is paid an officially gross salary of about $100,000 a year.

 

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