US to seize more 1MDB assets, Malaysia gov’t remains in denial

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The US Department of Justice said it will seek to recover $540 million in assets that were allegedly stolen from Malaysia’s troubled sovereign wealth fund 1Malaysia Development Berhad.

The assets include a superyacht, valuable paintings presented as a gift to actor Leonardo DiCaprio, among them an original Picasso, royalties of movies produced by an involved film studio, as well as diamond necklaces worth more than $6 million, gifts for  Australian model Miranda Kerr handed over by 1MDB “consultant” Jho Low.

The action, announced on June 15, is part of an effort by US authorities to seize ill-gotten assets linked to fraud at the government-controlled Malaysian fund, which originally was intended to promote economic development projects in the country, but has been at the center of a massive embezzlement scandal.

In court cases launched in 2016, the US sought to confiscate more than $1 billion allegedly embezzled by businessmen with political connections in Malaysia. After a close investigation of money flows from 1MDB, US investigators set the total amount of allegedly embezzled funds to $4.5 billion.

“This money financed the lavish lifestyles of the alleged conspirators at the expense and detriment of the Malaysian people,” acting US Assistant Attorney General Kenneth Blanco said in a statement.

The case is the largest single action the Justice Department has taken under its Kleptocracy Asset Recovery Initiative, launched in 2010, which seeks to recover foreign bribery proceeds and embezzled funds.

The scandal has rocked the Malaysian government, exposing Prime Minister Najib Razak to allegations of corruption and of personally profiting from the alleged theft, which he keeps denying.

In response to the US authorities, the Attorney General’s Chambers of Malaysia released a statement on June 16, expressing frustration that “yet again” they were not informed or alerted by the US Department of Justice, adding that there was “no evidence” to back up the action.

“We note that there has been no evidence from any investigation conducted by any law enforcement agencies in various jurisdictions that shows that money has been misappropriated from 1MDB; and that there have been no criminal charges against any individuals for misappropriation of funds from 1MDB,” the chamber’s statement said.

It added that there have been numerous and extensive investigations by Malaysian authorities into 1MDB, but no crime has been found, concluding that “until then, unproven allegations should not be taken as facts.”

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The US Department of Justice said it will seek to recover $540 million in assets that were allegedly stolen from Malaysia's troubled sovereign wealth fund 1Malaysia Development Berhad. The assets include a superyacht, valuable paintings presented as a gift to actor Leonardo DiCaprio, among them an original Picasso, royalties of movies produced by an involved film studio, as well as diamond necklaces worth more than $6 million, gifts for  Australian model Miranda Kerr handed over by 1MDB "consultant" Jho Low. The action, announced on June 15, is part of an effort by US authorities to seize ill-gotten assets linked to fraud...

Reading Time: 2 minutes

The US Department of Justice said it will seek to recover $540 million in assets that were allegedly stolen from Malaysia’s troubled sovereign wealth fund 1Malaysia Development Berhad.

The assets include a superyacht, valuable paintings presented as a gift to actor Leonardo DiCaprio, among them an original Picasso, royalties of movies produced by an involved film studio, as well as diamond necklaces worth more than $6 million, gifts for  Australian model Miranda Kerr handed over by 1MDB “consultant” Jho Low.

The action, announced on June 15, is part of an effort by US authorities to seize ill-gotten assets linked to fraud at the government-controlled Malaysian fund, which originally was intended to promote economic development projects in the country, but has been at the center of a massive embezzlement scandal.

In court cases launched in 2016, the US sought to confiscate more than $1 billion allegedly embezzled by businessmen with political connections in Malaysia. After a close investigation of money flows from 1MDB, US investigators set the total amount of allegedly embezzled funds to $4.5 billion.

“This money financed the lavish lifestyles of the alleged conspirators at the expense and detriment of the Malaysian people,” acting US Assistant Attorney General Kenneth Blanco said in a statement.

The case is the largest single action the Justice Department has taken under its Kleptocracy Asset Recovery Initiative, launched in 2010, which seeks to recover foreign bribery proceeds and embezzled funds.

The scandal has rocked the Malaysian government, exposing Prime Minister Najib Razak to allegations of corruption and of personally profiting from the alleged theft, which he keeps denying.

In response to the US authorities, the Attorney General’s Chambers of Malaysia released a statement on June 16, expressing frustration that “yet again” they were not informed or alerted by the US Department of Justice, adding that there was “no evidence” to back up the action.

“We note that there has been no evidence from any investigation conducted by any law enforcement agencies in various jurisdictions that shows that money has been misappropriated from 1MDB; and that there have been no criminal charges against any individuals for misappropriation of funds from 1MDB,” the chamber’s statement said.

It added that there have been numerous and extensive investigations by Malaysian authorities into 1MDB, but no crime has been found, concluding that “until then, unproven allegations should not be taken as facts.”

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