US Seeks $1 Billion in Mansions, Paintings and Major Assets From Massive Malaysian Scheme

More than $3.5 billion of taxpayer money in Malaysia was allegedly stolen.

ByMike Levine
July 20, 2016, 6:05 PM
PHOTO: One of multiple assets sought for forfeiture by the Justice Department is a $31 million mansion in Beverly Hills, California.
One of multiple assets sought for forfeiture by the Justice Department is a $31 million mansion in Beverly Hills, California.
Department of Justice

— -- Gambling debts at Las Vegas casinos, posh penthouses in New York City, sprawling mansions in Los Angeles, paintings by Monet and Van Gogh and a luxurious private jet were all paid for with money stolen from innocent citizens, according to U.S. authorities.

The thefts were part of a global scheme they said was tied to at least one senior government official in Malaysia. In all, more than $3.5 billion of Malaysian taxpayers’ money was allegedly “misappropriated” through U.S. banks and other financial institutions around the world. As a result, U.S. officials are trying to recover more than $1 billion in assets associated with the crime.

“Why does this matter so much to us? Certainly there’s a lot going on in the world right now –- terrorist attacks, violent crime, serious threats to American citizens and people around the world. Why does a corruption case halfway around the world matter so much to us?” FBI Deputy Director Andrew McCabe wondered today at a press conference in Washington.

“When corrupt officials bring their ill-gotten gains to the United States, they also bring with them their corrupt practices and disregard for the rule of law," he continued, "and that presents a threat to our economy, it impacts trade and investment, it fuels the growth of criminal enterprises and undermines our fair democratic processes.”

In addition, the more the U.S. government can do to promote stable governments, “the more we do to ensure U.S. national security,” McCabe said.

In 2009, the Malaysian government set up an investment fund, known as 1Malaysia Development Berhad, or “1MDB," to seek foreign investors and boost economic development in Malaysia.

But almost immediately, billions of dollars received by 1MDB were “siphoned off” into a “complex web” of foreign bank accounts and shell companies run by senior 1MDB officials and their associates, according to the assistant attorney general Leslie Caldwell, head of the Justice Department’s criminal division.

In court documents filed today, federal prosecutors and investigators say they want to recover the more than $1 billion in assets paid for with money laundered through the United States and traceable to the conspiracy.

Some of the money allegedly stolen from 1MDB was used toward a movie studio that helped produce the award-winning film “The Wolf of Wall Street,” starring Leonardo DiCaprio. U.S. authorities also want to seize any future profits from that investment.

Court documents name a relative of Malaysian Prime Minister Najib Razak as one of those who received money from 1MDB and implicate a person identified only as “Malaysian Official 1." Federal authorities today would not say whether “Malaysian Official 1” is the prime minister.

“We will not allow the United States to become a playground for the corrupt, a platform for money laundering or a place to hide and invest stolen riches,” said Eileen Decker, the U.S. Attorney for the Central District of California.

Caldwell called today’s announcement “a significant milestone” in the fight against global corruption.

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