By Eileen Ng | AP
Washington Post
June 16 2017

KUALA LUMPUR, Malaysia — A Malaysian sovereign wealth fund has rejected U.S. Justice Department allegations over money laundering and alleged theft of a treasure trove of assets including diamonds, a yacht and private jet and penthouse apartments.

The Malaysian government-controlled fund known informally as 1MDB and other officials in Kuala Lumpur insisted Friday that there was no proof linking the fund to such crimes.

On Thursday, the U.S. Justice Department filed a civil case seeking recovery of $540 million in assets that it says were stolen from 1MDB, a fund intended to promote economic development projects. Overall, the Justice Department alleges that more than $4.5 billion has been stolen from the fund.

In a 250-page filing for the U.S. District Court in Central California, the Justice Department outlined in detail the allegations of a complex money laundering scheme intended to enrich top-level officials of the fund, including some close to Malaysian Prime Minister Najib Razak.

The 1MDB case is the largest single action the Justice Department has taken under its Kleptocracy Asset Recovery Initiative, which seeks to recover foreign bribery proceeds and embezzled funds. Several other countries including Singapore and Switzerland are conducting probes.

Last summer, prosecutors moved to recover more than $1 billion diverted from the fund to pay for properties in New York and California, a $35 million jet, art by Vincent Van Gogh and Claude Monet and other wealth used to help finance the movies, “Dumb and Dumber To” and “The Wolf of Wall Street,” which was produced by Red Granite Pictures, a studio co-founded by Najib’s stepson.

The Justice Department filing drew vehement objections from Malaysia, where Attorney General Mohamed Apandi Ali said there was no evidence that money was misappropriated from 1MDB.

Apandi also expressed “strong concerns” over suggestions Najib, who has not been named in civil cases related to 1MDB, engaged in criminal acts. The attorney general said Malaysia will uphold the “rule of law” and take action if there is sufficient evidence of wrongdoing.

1MDB likewise said there was no documentary proof or witnesses’ statements to support the Justice Department’s claim.

“1MDB highlights that it is not a party to the civil lawsuit nor has it been contacted by the DOJ in relation to this matter,” the fund said in a statement.

Najib’s press secretary Tengku Sariffuddin separately voiced concern that the Justice Department didn’t seek cooperation from the Malaysian government or 1MDB.

“We are also concerned by the unnecessary and gratuitous naming of certain matters and individuals that are only relevant to domestic political manipulation and interference. This suggests a motivation that goes beyond the objective of seizing assets,” he said, without elaborating.

The Justice Department’s court filing shows much of the wealth in question was moved through offshore dealings and bank accounts in Singapore, Switzerland, Luxembourg and the U.S. The evidence cited includes details of wire transfers of hundreds of millions of dollars.

It says the wife of an unnamed person identified as “Malaysian Official 1,” who has been widely inferred to be Najib, received a 22-carat pink diamond necklace worth $27.3 million in 2014 purchased with from funds stolen from 1MDB.

Other assets included diamonds given to Australian model Miranda Kerr, movie posters and artwork given to Leonardo DiCaprio, as well as rights to the movies “Dumber and Dumber To” and “Daddy’s Home” from Red Granite.

Some of the items at issue were provided to the Leonardo DiCaprio Foundation for a charity auction. A DiCaprio spokesperson said that those items and an Academy Award won by Marlon Brando which was given to Mr. DiCaprio as a set gift by Red Granite to thank him for his work on ‘The Wolf of Wall Street’” were voluntarily returned.

Red Granite released a statement saying it is trying to resolve the case and is fully cooperating with the Justice Department.

In announcing the Justice Department’s filing, Sandra R. Brown, acting U.S. attorney for the Central District of California, said the wealth alleged to have been stolen “should have been used to help the people of Malaysia, but instead was used by a small number of individuals to fuel their astonishing greed.”

“We simply will not allow the United States to be a place where corrupt individuals can expect to hide assets and lavishly spend money that should be used for the benefit of citizens of other nations,” she said.