07
Oct
16

Swiss Authorities Repeat Call for Malaysia’s Help in 1MDB Probe – WSJ

Swiss Authorities Repeat Call for Malaysia’s Help in 1MDB Probe

ZURICH—Swiss authorities said they are trying to advance a probe into the alleged misappropriation of billions of dollars from a Malaysian state investment fund but haven’t yet received anticipated help from Malaysian counterparts.

Switzerland’s Office of the Attorney General said in a statement on Wednesday that its probe, begun in August last year, had uncovered an alleged “Ponzi scheme” at the fund, 1Malaysia Development Bhd., or 1MDB.

The office said it recently made an additional request for legal assistance from Malaysia. An earlier request for help, transmitted in January, is “still pending,” the statement said. A spokesman for Malaysia’s attorney general couldn’t immediately be reached.

The 1MDB scandal is the focus of investigations in a number of countries, but Prime Minister Najib Razak, who set up the fund in 2009, has shut down probes into the matter at home.

In July, the U.S. Justice Department filed civil lawsuits to seize assets, including property in Los Angeles and New York, that it said was purchased with some of the $3.5 billion allegedly misappropriated from 1MDB. Swiss prosecutors have been cooperating with the U.S. authorities, as well as investigators in Singapore, Luxembourg and other jurisdictions where money allegedly flowed.

But Malaysia hasn’t cooperated, Swiss authorities say. Last summer, Mr. Najib fired Malaysia’s previous attorney general, who was leading an investigation into 1MDB. The Wall Street Journal has reported that the new attorney general subsequently declined to act on advice from the country’s central bank to open a criminal case against the fund’s management over missing investments, citing insufficient evidence.

Global investigators believe that more than $1 billion originating from 1MDB landed in Mr. Najib’s bank accounts, the Journal has reported. Mr. Najib has denied any wrongdoing. 1MDB has denied wrongdoing and has said it is cooperating with authorities. The Malaysian attorney general said part of the money that entered the prime minister’s accounts was a legal donation from Saudi Arabia, and that most of the money was returned.

The Swiss authorities said Wednesday it appears that $800 million has been misappropriated from investments made by SRC International, a unit of Malaysia’s finance ministry that formerly was part of 1MDB, and that a “Ponzi scheme” may have helped to conceal the misappropriation of funds from both SRC and 1MDB.

…more
Swiss Authorities Repeat Call for Malaysia’s Help in 1MDB Probe
By John Letzing
Oct. 5, 2016 – WSJ


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