DOJ: Wolf of Wall Street’ Funded With Stolen Money

Created in 2009 as Malaysian Prime Minister Rajib Nazak entered office, 1MDB “was ostensibly created to pursue investment and development for the economic benefit of Malaysia and its people”, the court complaint charged. “Malaysia does continue to be an ally of ours, particularly in counter-terrorism efforts”, she said. That process could take years – meaning the country’s leadership might be different – and in the past, the Justice Department has routed funds through trusted nonprofit groups or other organizations to prevent further corruption.

FBI deputy director Andrew McCabe told reporters the investigation is ongoing, suggesting it could yet ensnare individuals in civil or criminal charges. “As with all cases, even with civil forfeiture, we bring the action when all of the facts come together and we feel we have a cause for judicial action”, Lynch said. The bonds were guaranteed by both the Malaysian fund and an investment entity owned by the government of Abu Dhabi.

The Wall Street bank helped 1MDB raise $6.5 billion in three bond sales in 2012 and 2013 to invest in energy projects and real estate to boost the Malaysian economy. He has said 1MDB’s real problem was an overreliance on debt that it has struggled to pay back and that “attacks” by opposition politicians hurt a planned public offering.

Lynch said the $1 billion in assets the Justice Department is seeking represent just a portion of the more than $3.5 billion they believe was stolen from 1MDB. No one from either Rothschild bank was immediately available to comment.

A shell company registered in the British Virgin Islands, Tanore Finance Corporation, allegedly purchased a $367,000 work by famed Culver City artist Ed Ruscha using some of the laundered funds, according to the complaint.

A Federal Bureau of Investigation criminal investigation into money laundering and fraud also is ongoing in the US, according to a person familiar with the probe.

The move to seize the funds, which is subject to what could be lengthy legal proceedings, emerges from a 2010 Justice Department anti-kleptocracy initiative meant to confiscate the ill-gotten gains of world leaders which pass through the United States. The total amount of funds stolen from the state-run wealth fund is estimated to add up to around $4 billion.

President Barack Obama forged a relationship with Mr. Najib at a time of growing concern over China’s rise, and the two played golf together in Hawaii in 2014.

Malaysian government officials had no comment Wednesday in response to queries about reports of the Justice Department action. “But nearly immediately after receiving the proceeds of the two bond issues, roughly 40 percent of the money that was raised, or $1.37 billion, was transferred out of 1MDB’s accounts and into a Swiss bank account that was in the name of a shell corporation incorporated in the British Virgin Islands”.

The Wall Street Journal has reported that Goldman Sachs Group Inc.is under investigation for not flagging its suspicion over fund transfers related to the scandal. In the case of the Malaysian money, shell companies in DE were among those used.

A spokesperson for Mr Najib said the government would “fully co-operate with any lawful investigation of Malaysian companies or citizens in accordance with worldwide protocols”. Saudi Foreign Minister Adel Al-Jubeir said in April funds wired into Najib’s personal bank account were a “genuine” donation originating from Saudi Arabia. The money allegedly went to a number of people, including Riza Aziz, the stepson of Malaysian Prime Minister Najib Razak and co-owner of Red Granite Pictures, an L.A. -based company that was one of the producers of “The Wolf of Wall Street”.

Mr. Aziz’s spokesman has said he has committed no wrongdoing.