'Jho Low, associate used US$13m embezzled from 1MDB to gamble'

A United Kingdom-based financial fraud investigator testified that US$13 million was embezzled from 1MDB to fund fugitive businessperson Low Taek Jho (Jho Low) and alleged associate Tan Kim Loong’s two-day gambling spree.

In his written witness statement tendered before the Kuala Lumpur High Court, Richard Templeman testified this in support of the sovereign wealth fund’s US$248 million lawsuit against Riza Aziz, the stepson of former prime minister Najib Abdul Razak.

The plaintiff’s witness said that US$13 million went to Las Vegas Sands LLC’s account with Bank America International.

Templeman said US$11 million went to Low on July 10, 2012, and US$2 million went to Tan the next day.

“Research indicates that Las Vegas Sands LLC is a casino and resort company,” the investigator said.

Templeman added that on July 23, 2012, US$7,350,500 and US$1.3 million from Low and Tan were sent out from Las Vegas Sands LLC’s account to an account held by Alsen Chance, an offshore entity.

The witness said that these payments were marked as funds due from Low and Tan, and seemed likely to be the balance from the transfers between July 10 and 11 of the same year.

His testimony on the casino spree was over part of the money trail from US$41 million of 1MDB’s funds that flowed from the account of Red Granite Capital Limited to Alsen Chance’s account on June 20, 2012.

Movies, gambling, art, real estate

1MDB contended that US$248 million of its funds were embezzled to fund the movie production of Hollywood filmmaker Riza and two other defendants, as well as for gambling and real estate.

The two other defendants are Riza’s companies, namely California-based film studio Red Granite Pictures Incorporated and Red Granite Capital.

Red Granite Pictures produced the 2013 hit “The Wolf of Wall Street”, a biographical black comedy crime film about the rise and fall of Jordan Belfort, a stockbroker in New York City who engaged in rampant graft and fraud on Wall Street. Hollywood actor Leonardo DiCaprio played the main role of Belfort.

In his testimony, Templeman noted that US$3.3 million of 1MDB’s funds went to Callamari Fine Art Incorporated on July 27, 2012, with the transaction reference being “Jean-Michel Basquiat”, a prominent American artist of the 1980s.

The witness noted that US$2,787,401 of 1MDB’s funds went to Royal Jets for what was termed “private aviation services” between July 9 and July 23 2012.

The civil suit hearing is before judge Raja Ahmad Mohzanuddin Shah Raja Mohzan.

‘Plaintiffs would have known of misappropriation’

Via the civil action filed in 2021, 1MDB and its three subsidiaries claimed that its funds were siphoned out through “various artifices, devious devices, and plain old deceit that misled various innocent third parties”.

“The plaintiffs contend that US$248 million was ultimately used for the personal benefit of Riza and his associates to fund Red Granite Pictures’ films, purchase real estate, purchase movie memorabilia, and pay for gambling expenses,” the plaintiffs contended.

Besides 1MDB, the other plaintiffs are 1MDB Energy Holdings Limited, 1MDB Energy Limited, and 1MDB Energy (Langat) Limited.

In the opening statement for the trial, the plaintiffs claimed that the defendants received the money despite knowing the funds had been misappropriated from 1MDB.

1MDB and its three subsidiaries claimed that Riza and his two firms dishonestly assisted in the breaches of fiduciary duty by Low.

The plaintiffs alleged that because Riza managed both firms, he would have known that the funds originating from 1MDB had been misappropriated.

1MDB and its subsidiaries are seeking, among others, a declaration that Riza is responsible for the misappropriated funds and to pay back the money.

Saudi loan

Through his statement of defence, Riza claimed that the money was received from a loan from Saudi royalty or the International Petroleum Investment Company (IPIC) and not from 1MDB.

The defendant claimed that it was difficult for an unknown film producer to obtain loans from commercial banks and that had compelled him to seek funding from individuals or companies.

In May 2020, the criminal court granted Riza a discharge not amounting to an acquittal (DNAA) for money laundering involving US$248 million linked to 1MDB funds.

The DNAA is only for the criminal case, which is separate from 1MDB’s ongoing civil action against him.

Riza’s stepfather Najib is serving a six-year jail sentence over the RM42 million SRC International criminal graft case.

Previously a subsidiary of 1MDB, SRC’s ownership was later fully transferred to the Minister of Finance Incorporated (MOF Inc). Najib was also finance minister during his tenure as prime minister.

Law firm Shearn Delamore & Co is acting for 1MDB and its subsidiaries.

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