Photo via Pixabay
Photo via Pixabay

Federal prosecutors filed a series of complaints in Los Angeles Wednesday seeking to recover more than $1 billion they claim was stolen from a Malaysian investment fund and used for purposes such as buying high-end Southland real estate and even investing in the 2013 film “The Wolf of Wall Street.”

Court documents filed by the Justice Department allege high-ranking officials of 1Malaysia Development Berhad, which was created by the Malaysian government, misappropriated more than $3.5 billion from the wealth fund between 2009-15.

Prosecutors are trying to recover more than $1 billion they claim was laundered through the United States.

Federal authorities allege the stolen funds were used for elaborate purchases such as high-end real estate and hotels in Los Angeles and New York, artwork by Vincent Van Gogh and Claude Monet, an interest in the music- publishing rights of EMI Music and the production of “The Wolf of Wall Street,” starring Leonardo DiCaprio.

“The Department of Justice will not allow the American financial system to be used as a conduit for corruption,” U.S. Attorney General Loretta Lynch said.

“With this action, we are seeking to forfeit and recover funds that were intended to grow the Malaysian economy and support the Malaysian people,” she said. “Instead, they were stolen, laundered through American financial institutions and used to enrich a few officials and their associates. Corrupt officials around the world should make no mistake that we will be relentless in our efforts to deny them the proceeds of their crimes.”

Federal authorities said the 16 complaints filed in Los Angeles represent the largest single action ever brought under the Justice Department’s Kleptocracy Asset Recovery Initiative.

Prosecutors are targeting officials at 1MDB, their relatives and other associates who allegedly diverted more than $3.5 billion in 1MDB funds. Using bogus documents and representations, the funds were laundered through a series of complex transactions and fraudulent shell companies with bank accounts located in the Singapore, Switzerland, Luxembourg and the United States, according to the U.S. government.

The transactions were intended to conceal the origin, source and ownership of the funds, and were ultimately processed through U.S. financial institutions and used to acquire and invest in assets located in the United States, Lynch alleged.

The complaints detail the alleged misappropriation of 1MDB’s assets via at least three schemes.

In 2009, prosecutors allege that 1MDB officials and their associates embezzled about $1 billion that was intended to be invested to exploit energy concessions purportedly owned by a foreign partner. Instead, the funds were allegedly transferred through shell companies and were used to acquire a number of assets.

The complaints also allege that the co-conspirators misappropriated more than $1.3 billion in funds raised through two bond offerings in 2012 and $1.2 billion following another bond offering in 2013. The stolen funds were allegedly laundered into the United States and used by the co-conspirators to acquire and invest in various assets.

“According to the allegations in the complaints, this is a case where life imitated art,” said Assistant Attorney General Leslie R. Caldwell.

“The associates of these corrupt 1MDB officials are alleged to have used some of the illicit proceeds of their fraud scheme to fund the production of ‘The Wolf of Wall Street,’ a movie about a corrupt stockbroker who tried to hide his own illicit profits in a perceived foreign safe haven,” Caldwell said. “But whether corrupt officials try to hide stolen assets across international borders — or behind the silver screen — the Department of Justice is committed to ensuring that there is no safe haven.”

—Staff and wire reports

 

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