Saturday, October 31, 2020

US seeks to recover $300 million assets traced to UK in 1MDB scandal


The Department of Justice in the United States said on Wednesday that it was seeking to recover an additional $300m in assets it says are linked to the multibillion-dollar scandal surrounding Malaysian state fund 1MDB.

The Justice Department said it had traced the assets to an escrow account in the United Kingdom.

US and Malaysian authorities estimate $4.5bn was stolen from 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials including former Malaysian Prime Minister Najib Razak, executives at US bank Goldman Sachs, and others.

Najib is on trial in Kuala Lumpur in a series of cases related to 1MDB, and has denied wrongdoing.

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In a complaint filed in the Central District of California on Wednesday, the Justice Department said the $300m was traceable to a line of credit extended by Venezuela’s state oil company Petroleos de Venezuela to Saudia Arabia’s PetroSaudi Oil Services in connection with an oil-drilling venture.

The companies are already embroiled in a legal dispute over the funds that the Malaysian high court has sought to freeze with cooperation from the UK authorities.

Billions of dollars are thought to have been looted from the now-defunct 1MDB, which was ostensibly set up to accelerate Malaysia’s economic development.

The Justice Department said it was also seeking four dozen promotional movie posters that Riza Aziz, a Hollywood producer and Najib’s stepson, acquired with more than $4m in funds traceable to assets embezzled from 1MDB.

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Prosecutors in Malaysia dropped money-laundering charges against Aziz in May after reaching a deal in which he agreed to help authorities recover 1MBD-related assets. Goldman Sachs reached a $3.9bn settlement in July, which Malaysia’s finance minister says resolves all outstanding charges and claims against the investment bank. Shortly afterwards, Najib was found guilty of all charges in the first of the 1MDB-linked cases he faces, and sentenced to 12 years in prison. He has appealed the decision.

Wednesday’s complaint brings the total value of assets the US has sought to recover in relation to the scandal to $2.1bn – the largest-ever asset recovery action brought by the agency. So far the US has recovered or assisted Malaysia in recovering nearly $1.1bn.

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