The United States Department of Justice (DOJ) last night announced its most significant milestone since July 21 last year, when US investigators first went public on the 1MDB scandal and declared that Malaysians had been defrauded on an enormous scale.
At that time, US investigators said more than US$3 billion was allegedly misappropriated from 1MDB and sought to seize around US$1 billion in ill-gotten assets.
In the third and latest filing last night, the DOJ now puts the allegedly misappropriated figure at US$4.5 billion and is seeking to seize US$1.7 billion in assets purportedly acquired using funds stolen from 1MDB.
Among the list of items to be seized are a yacht, diamond jewellery, fitness chain and artworks.
“Today’s complaints reveal another chapter of this multi-year, multi-billion-dollar fraud scheme, bringing the total identified stolen proceeds to $4.5 billion,” said acting assistant attorney-general of the DOJ's criminal division Kenneth A Blanco in a media conference call.
“This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people.
"We are unwavering in our commitment to ensure the US is not a safe haven for corrupt individuals and kleptocrats to hide their ill-gotten wealth or money, and that recovered assets be returned to the victims from which they were taken," he added.
The US$1 billion forfeiture sought in the first filing on July 21 last year, as well as the second filing of US$100 million last week and another US$540 million in the latest filing, makes this the largest action brought by the DOJ's Kleptocracy Asset Recovery Initiative.
Acting US attorney Sandra R Brown said the billions of dollars was meant to help the Malaysian people but was instead "used by a small number of individuals to fuel their astonishing greed".
Meanwhile, the Federal Bureau of Investigation's (FBI) criminal investigation division deputy director Stephen E Richardson highlighted the agency's role in combating international corruption.
“When corrupt foreign officials launder funds through the US in furtherance of their criminal activity, the FBI works tirelessly to help hold those officials accountable, and recover the misappropriated funds,” he said.
More 1MDB funds allegedly siphoned
The new filing is significant as it highlighted the existence of a previously unknown phase in which more funds were allegedly siphoned from 1MDB, taking place in 2014.
It revealed how US$850 million out of US$1.225 billion in loans 1MDB took from Deutsche Bank was siphoned off in what it described as the "Option Buyback" phase.
Previously, the DOJ highlighted how at least US$4.053 billion was diverted from 1MDB in the Good Star, Aabar BVI and Tanore phases.
However, the SRC International phase, which had been highlighted by Swiss investigators, remains a mystery even though the DOJ in its latest filing touched on some details of how the former 1MDB subsidiary was used for pass-through transactions.
Among the additional assets, allegedly acquired using stolen 1MDB funds, which the DOJ seeks to seize in the new filing include:
- The Equanimity yacht;
- 2.5 million shares of Series D Preferred Stock in Palantir Technologies, a software company;
- All rights and interests in the Electrum Group, an investment manager company;
- Rights to the film "Dumb and Dumber" produced by Red Granite Pictures;
- Rights to the film "Daddy's Home" produced by Red Granite Pictures;
- A single frame 3-sheet colour lithograph poster by German artist Heinz Schulz-Neudamm for the 1927 silent film "Metropolis";
- All rights and interests in Fly Wheel Sports, a fitness club chain;
- One 11.72-carat heart-shaped diamond;
- One 8.88-carat fancy intense pink diamond pendant surrounded by 11-carat fancy intense pink diamonds;
- One 18-carat white gold diamond jewellery set, including a diamond necklace, diamond earring, diamond bracelet, and diamond ring;
- One pair of diamond earrings and matching diamond ring, consisting a 7.53-carat flawless type 2A diamond, a 3.05-carat flawless type 2A diamond and a 3.08-carat flawless type 2A diamond;
- A painting entitled “Nature Morte au Crane de Taureau” by Pablo Picasso;
- A collage entitled “Redman One” by Jean-Michel Basquiat;
- A photograph entitled “Boy with the Toy Hand Grenade” by Diane Arbus;
The assets which the DOJ sought to seize in previous filings include:
- The L’emritage property, including the L'Ermitage Hotel at 9291 Burton Way, Beverly Hills, California 90210;
- The L’ermitage business assets that include all chattels and intangible assets, inventory and equipment maintained by LBH Real Estate;
- Hillcrest property 1: a real property located in Beverly Hills, California;
- The Park Laurel condominium located in New York that is owned by Park Laurel Acquisition LLC;
- A Bombardier Global 5000 jet with the manufactured serial number 9625 and registration number N689WM, with two Rolls Royce engines;
- Time Warner Penthouse located in New York owned by 80 Columbus Circle (NYC) LLC;
- The Oriole mansion located in Los Angeles, California;
- The Greene condominium located in New York, owned by 118 Greene Street (NYC) LLC;
- EMI Assets of any rights including copyright and intellectual property rights, as well as the right to collect and receive any profits owned by JW Nile (BVI) Ltd;
- Symphony CP (Park Lane) LLC assets, which is a Delaware limited liability company owned directly or indirectly by Symphony CP Investments LLC and Symphony CP Investments Holdings LLC, based in New York, which owns what is known as the Park Lane Hotel;
- The Walker Tower Penthouse which is located in New York, and owned by 212 West 18th Street LLC;
- The Laurel Beverly Hills mansion, located in Beverly Hills, California, and owned by Laurel Beverly Hills Holdings;
- Hillcrest Property 2: which like Hillcrest Property 1, is located in Beverly Hills, California;
- A Vincent Van Gogh Artwork titled “La maison de Vincent a Arlest”;
- A Claude Monet painting titled “Saint-Georges Majeur”;
- Another Claude Monet painting titled “Nympheas avec Reflets de Hautes Herbes”; and
- The Qentas townhouse located in London, UK.
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