Mansions, Wolf of Wall Street proceeds eyed in $1.4b fraud case

July 21, 2016 8:00 am

Leonardo DiCaprio played Jordan Belfort in The Wolf of Wall Street.

prosecutors are seeking to seize New York City penthouses,
Hollywood and Beverly Hills mansions, a private jet and even some future
proceeds from the award-winning movie The Wolf of Wall Street in a forfeiture case that alleges a breathtaking level of fraud surrounding a Malaysian-government investment fund.
In
total, the Justice Department is seeking to recover more than US$1
billion ($1.4 billion) in assets that prosecutors allege are ill-gotten
gains from an effort by Malaysian officials and their associates to
misappropriate money from the government-owned fund.
That fund,
known as 1MDB, was supposed to pursue projects to benefit residents of
Malaysia but was used instead to sate the expensive tastes of those with
power over it, officials said.
“Unfortunately, sadly,
tragically, a number of corrupt 1MDB officials treated this public trust
as a personal bank account,” US Attorney General Loretta Lynch said.

The complaint alleges that more than US$730 million of what
seemed to be 1MDB money was ultimately routed to the personal bank
account of “Malaysian Official 1,” a thinly veiled reference to
Malaysian Prime Minister Najib Razak. It is unclear what the money was
spent on, and the Malaysian Attorney-General has asserted that US$620m
was returned.
The civil forfeiture complaint undeniably puts the
Malaysian Government, viewed by the Obama Administration as a key Asian
ally, in an uncomfortable position. The Administration has worked to
foster closer ties with Malaysia as part of a strategy to cultivate
partners in Asia who can act as a counterweight to China. In 2014, Najib
was invited by President Barack Obama to go golfing in Hawaii. Asked
about the matter, Lynch said Malaysia “does continue to be an ally of
ours,” particularly on counter-terrorism matters.
Since the
scandal broke in Malaysia, Najib has called the issue an “unnecessary
distraction” and asserted that no crime was committed. The country’s
Attorney-General said his own investigation supported that assertion.
Federal
prosecutors did not charge anyone criminally in connection with the
alleged misdeeds. In a series of extensive complaints filed in US
District Court for the Central District of California, they merely
sought to take control of assets that were a part of corrupt schemes.
Lynch said the US$1 billion in assets the Justice
Department is seeking represent just a portion of the more than US$3
billion they believe was stolen from 1MDB. The case, she said, is the
largest single action in the history of the Justice Department’s
kleptocracy initiative, which seeks to stem international corruption by
reclaiming the money it produces.
Among the assets federal
prosecutors want are the L’Ermitage Hotel in Beverly Hills,
condominiums, penthouses and mansions in California and New York, and
all the rights and interest that the film production company Red Granite
Pictures own to the movie The Wolf of Wall Street. Company co-founder Riza Shahriz Bin Abdul Aziz is the Malaysian Prime Minister’s stepson.
Federal prosecutors allege tens of millions of dollars were diverted from 1MDB to fund Red Granite Pictures and The Wolf of Wall Street, some distributed by Malaysian financier Low Taek Jho, who also goes by Jho Low.

Najib Razak, Malaysia’s Prime Minister. Photo / Bloomberg
Prosecutors noted that actor Leonardo DiCaprio – who is not
named in the complaint but can be identified based on the information
contained in it – thanked Aziz and Low when he won a Golden Globe for
his role in the movie. They also alleged that DiCaprio gambled on Low’s
tab at the Venetian casino in July 2012.
A representative for
DiCaprio did not immediately return a message seeking comment. A
representative of Red Granite Pictures said she was looking into a
reporter’s inquiry. Efforts to locate a phone number for Low or a
representative were not immediately successful.
Federal
prosecutors alleged that the fraud involving 1MDB spanned from 2009 to
at least 2013 and that those involved used complicated financial
transactions involving banks in Switzerland and Singapore to hide their
wrongdoing. The money often travelled complicated paths, and Lynch said
prosecutors moved to seize only that which went through the US financial
system and thus gave federal prosecutors jurisdiction to act on it.

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