US seeking to seize $1B in assets in Malaysian embezzlement case

The United States is seeking to seize more than $1 billion in assets purchased with funds allegedly embezzled by high-level officials in Malaysia from an investment fund aimed at growing the Southeast Asian nation's economy.

The Justice Department on Wednesday filed a civil complaint against 1 Malaysia Development Berhad (1MDB), a company owned by Malaysia’s government and overseen by its embattled prime minister, Najib Razak, for laundering more than $1 billion through the United States over a six-year period. 

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In total, the complaint estimates that more than $3.5 billion was allegedly misappropriated and laundered by fund officials and their associates between 2009 and 2015. 

“The Department of Justice will not allow the American financial system to be used as a conduit for corruption,” said Attorney General Loretta Lynch. 

“With this action, we are seeking to forfeit and recover funds that were intended to grow the Malaysian economy and support the Malaysian people,” Lynch said.

“Instead, they were stolen, laundered through American financial institutions and used to enrich a few officials and their associates," she said.

The complaint represents the largest single action ever brought under the Kleptocracy Asset Recovery Initiative.

The complaint says that the officials allegedly used some of the fund's proceeds from their fraud scheme to fund the production of the movie “The Wolf of Wall Street," which starred Leo DiCaprio as a corrupt stockbroker who lived a lavish lifestyle before getting caught by the FBI. 

In addition to the movie, the assets allegedly were used to purchase high-end real estate and hotel properties in New York and Los Angeles, a $35 million jet aircraft and works of art by Vincent Van Gogh and Claude Monet.

“Stolen money that is subsequently used to purchase interests in music companies, artwork or high-end real estate is subject to forfeiture under U.S. law,” said U.S. Attorney Eileen Decker of the Central District of California.

The officials allegedly diverted more than $3.5 billion in 1MDB funds using fraudulent documents and laundered the funds through a series of complex transactions and shell companies with bank accounts located in the Singapore, Switzerland, Luxembourg and the United States.  

"These transactions were allegedly intended to conceal the origin, source and ownership of the funds, and were ultimately processed through U.S. financial institutions and were used to acquire and invest in assets located in the United States," Justice said in a release.