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US chases penthouses and Beverly Hills mansions in 1MDB lawsuit
[WASHINGTON] One apartment in Manhattan's Time Warner Centre has a 64-ft-long (19.5m) terrace outside a master suite with a walk-in closet, two bathrooms and a separate dressing room. A mansion in Beverly Hills features a pyramid in the middle of an indoor pool.
Those are two of the 11 pieces of real estate the US government is trying to seize as part of an investigation into the alleged misappropriation of US$3.5 billion (S$4.7 billion) from Malaysian state fund, 1Malaysia Development Berhad (1MDB), according to a court filing on Wednesday by the US Justice Department.
The US links most of the real estate to Riza Aziz, a stepson of Malaysia's Prime Minister Najib Razak, and Jho Low, a friend and financier known for partying with celebrities Lindsay Lohan and Paris Hilton.
Riza produced "The Wolf of Wall Street", a movie about decadence and greed starring Hollywood star Leonardo DiCaprio, and Low got an on-screen credit and a mention in the actor's Golden Globes speech.
Money they allegedly diverted from the fund was raised through bond offerings underwritten by Goldman Sachs Group Inc, according to the complaint.
"Unfortunately and tragically, a number of corrupt officials treated this public trust as a personal bank account," attorney general Loretta Lynch said on Wednesday.
Among the other properties is a US$33.5 million condominium at the Park Laurel near Lincoln Centre, allegedly boughtÂ by a shell company controlled by Riza. It has a 1,244-sq-ft (116-sq-m) terrace wrapping around a corner, according to a listing that mentions soundproofing and heated marble floors.
Low is said to have spent US$39 million on another mansion in Beverly Hills that once belonged to "Fantasy Island" actor Ricardo Montalban, and then built a gym and upgraded the audio-visual system, the complaint says.
Money travelled through shell companies, checks, wire transfers and accounts with JPMorgan Chase & Co, Deutsche Bank AG, Rothschild Bank AG and BSI Bank Ltd, according to the Justice Department, which didn't accuse them of wrongdoing.
The deal for the US$30.6 million Time Warner penthouse allegedly involved money diverted from 1MDB to a Swiss bank account to one in Singapore to an account in the name of Low's father, according to the complaint.
Low has said he provided consulting to 1MDB that didn't break any laws, while the fund and Mr Najib have both denied wrongdoing. The investment fund said in a statement that it wasn't a party to the suit and hasn't been contacted by the Justice Department.
The government wants to seize more than US$1 billion of assets. Besides residential real estate, money that allegedly ended up with public officials and their relatives and associates was spent on a private jet, Monet paintings, a stake in Central Park South's Park Lane Hotel and gambling expenses at Las Vegas casinos, the Justice Department alleges. Its complaint says Low gambled in Las Vegas with actor DiCaprio.
The latter's character in "The Wolf of Wall Street" has a condominium in midtown Manhattan, complete with a terrace that his friends use to dangle a man over the street.
In real life, it sold for less than US$8 million, a fraction of the US$50.9 million price for the penthouse in Chelsea's Walker Tower allegedly bought by an associate, Khadem Al Qubaisi. The former United Arab Emirates official diverted funds to buy it, the Justice Department said.
Ms Lynch said the civil action and asset seizures are the largest ever brought by the department's six-year-old Kleptocracy Asset Recovery Initiative, set up to combat corruption and money laundering.
Jordan Belfort, the real-life stockbroker played by DiCaprio, was convicted in 2003 of money laundering and securities fraud. He served about half of a four-year prison sentence.