MIL-OSI Security: Justice Department Repatriates $1.4B Misappropriated 1MDB Funds to Malaysia

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Source: Office of United States Attorneys

The Justice Department announced today that it has repatriated an additional $156 million in misappropriated 1Malaysia Development Berhad (1MDB) funds to the people of Malaysia, bringing the total returned by the department to approximately $1.4 billion.

According to court documents, the funds from 1MDB, formerly Malaysia’s investment development fund, were laundered through major financial institutions worldwide, including in the United States, Switzerland, Singapore, and Luxembourg. As alleged in the civil forfeiture complaints, from 2009 through 2015, high-level officials of 1MDB, their associates, and Low Taek Jho, also known as Jho Low, misappropriated more than $4.5 billion in funds belonging to 1MDB through a criminal scheme involving international money laundering and embezzlement. Some of the embezzlement proceeds were also allegedly used to pay bribes.

Beginning in 2016, a landmark effort encompassing 41 civil forfeiture actions filed in the U.S. District Court for the Central District of California and one in the U.S. District Court for the District of Columbia by the Money Laundering and Asset Recovery Section (MLARS) of the Justice Department’s Criminal Division led to the seizure of over $1.7 billion in stolen assets. This is the largest recovery to date under the department’s Kleptocracy Asset Recovery Initiative. The funds include both funds finally forfeited and funds the department assisted in recovering and returning. The department continues to litigate actions against additional assets allegedly linked to this scheme.

1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment. Its funds were intended to be used for improving the well-being of the Malaysian people. Instead, funds held by 1MDB and proceeds of bonds issued for and on behalf of 1MDB were misappropriated and spent on a wide variety of extravagant items, including luxury homes and properties in Beverly Hills, New York, and London; a 300-foot superyacht; and fine art by Monet and Van Gogh. The funds were also sent into numerous business investments, including a boutique hotel in Beverly Hills, a movie production company that made “The Wolf of Wall Street,” the redevelopment of the Park Lane Hotel in Manhattan, and shares in EMI, the largest private music rights holder. As alleged, other funds were provided to various public officials and co-conspirators.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division; and Chief Guy Ficco of the IRS Criminal Investigation (IRS-CI) made the announcement.

The FBI’s International Corruption Squads in New York and Los Angeles and IRS-CI are leading the investigation.

MLARS Trial Attorneys Barbara Levy, Josh Sohn, Jonathon Baum, and Sean Fern are prosecuting the case, with assistance from former MLARS Deputy Chief Woo S. Lee; Trial Attorney Kyle Freeny; and former Asset Forfeiture Section Chief Steven Welk, Asset Forfeiture Section Chief Jonathan Galatzan, and former Assistant U.S. Attorneys John Kucera and Michael Sew Hoy for the Central District of California.

The Justice Department’s Office of International Affairs is providing substantial assistance. MLARS’ Program Operations Unit and the U.S. Marshals Service also provided significant support.  

Significant assistance has also been provided to the department over the course of its work in the investigations and civil and criminal litigation by the Attorney General’s Chambers of Malaysia, the Royal Malaysia Police, the Malaysian Anti-Corruption Commission, the United Kingdom Financial Conduct Authority, the United Kingdom Prudential Regulation Authority, the United Kingdom National Crime Agency (NCA), the Attorney General’s Chambers of the Territory of the British Virgin Islands, the Attorney General’s Office of the Bailiwick of Guernsey and the Guernsey Economic Crime Division, the International Anti-Corruption Coordinate Centre, the Attorney General’s Chambers of Singapore, the Singapore Police Force–Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg, the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg, and Indonesian, Latvian and French authorities.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated MLARS prosecutors in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to seize, forfeit, and repatriate those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should email kleptocracy@usdoj.gov or submit information at https://tips.fbi.gov/.              

MIL Security OSI