Gene Maddaus
Variety
15th Sept 2017
Red Granite Pictures, dogged for more than a year by its connection to a massive Malaysian corruption case, on Friday reached a settlement with federal prosecutors.
The Department of Justice filed a civil forfeiture case in July 2016, seeking to recoup proceeds from “The Wolf of Wall Street.” Prosecutors alleged that Red Granite — whose CEO, Riza Aziz, is the step-son of Malaysia’s prime minister — used funds embezzled from a Malaysian development authority to produce the film.
The case was one part of a much broader effort to seize more than $1 billion in assets, out of $4.5 billion allegedly stolen from the development fund, known as 1MDB. Prosecutors have seized a Picasso and a Basquiat that were gifted to Leonardo DiCaprio, as well as an Oscar statuette that once belonged to Marlon Brando.
Details of the deal were not released. Red Granite has consistently maintained that it did not knowingly accept stolen funds.
The company has been working for several months to resolve the case, and agreed to the appointment of an outside fiduciary to oversee the company’s operations. In an apparent vote of confidence, prosecutors in August agreed to put the company’s CFO back in charge of the company’s finances.
Red Granite is seeking to release “Papillon,” a remake of the 1973 Steve McQueen film that stars Charlie Hunnam, and has sought to dispel the cloud of alleged corruption surrounding the company.
In addition to resolving the government’s initial claim for “The Wolf of Wall Street” proceeds, the settlement resolves a subsequent claim for revenues from two other films, “Daddy’s Home” and “Dumb and Dumber To.”
The settlement does not end the legal difficulties for Aziz, who is also alleged to have used embezzled funds to purchase luxury real estate. In its original complaint, the government alleged that Aziz used stolen money to buy a $35 million condominium at the Park Laurel in New York, a $41.8 million townhouse in London, and a $17.5 million mansion in Beverly Hills. The civil cases seeking to seize each of those properties remain unresolved.
In a recent filing, in which prosecutors sought to put the asset forfeiture cases on hold, the government identified Aziz as one of the figures allegedly involved in criminal activity. U.S. investigators are working with their counterparts in several other countries to pursue criminal charges in the 1MDB scandal.
In a statement, Red Granite said, “We are glad to finally put this matter behind us and look forward to refocusing all of our attention back on our film business.”
The statement did not address Aziz’s position or future with the company.