17
Jun
17

U.S.’s Latest Target in 1MDB Probe – WSJ

U.S.’s Latest Target in 1MDB Probe: Leo DiCaprio’s Art, Miranda Kerr’s Jewelry

The Justice Department files lawsuits to seize assets allegedly bought with money stolen from a Malaysian investment fund, including a $250 million yacht

U.S. prosecutors have broadened their effort to seize assets they allege were bought with money stolen in a Malaysian financial scandal, filing lawsuits to claim diamonds given to model Miranda Kerr, movie posters and artwork given to Leonardo DiCaprio, and a megayacht known as the Equanimity.

The suits, filed Thursday by the U.S. Justice Department, are the latest seeking to claim property and other assets linked to alleged fraud at a Malaysian state fund called 1Malaysia Development Bhd., known as 1MDB. Thursday’s suits aim to recover $540 million in property, bringing the total amount claimed by the U.S. Justice Department to more than $1.6 billion.

The government is also trying to seize the rights to movies “Dumber and Dumber To,” starring comedian Jim Carrey, and “Daddy’s Home,” which are held by Red Granite Pictures, a production company whose chairman is the stepson of Malaysian Prime Minister Najib Razak.

Civil asset-forfeiture lawsuits are filed against the assets themselves and not individuals. Owners of the assets can contest the forfeiture.

The latest lawsuits highlight the global nature of the scandal at 1MDB, which was launched by Mr. Najib to spur economic development. The fund borrowed more than $13 billion but had little to show for it, and the Justice Department alleges that billions of dollars were stolen by people close to the prime minister.

This is the Justice Department’s largest-ever antikleptocracy case. The alleged 1MDB fraud is under investigation in several other countries, including the United Arab Emirates, Singapore and Luxembourg. Malaysia closed all but one of its probes without finding wrongdoing.

“Today’s complaints reveal another chapter of this multiyear, multibillion-dollar fraud scheme, bringing the total identified stolen proceeds to $4.5 billion,” acting Assistant Attorney General Kenneth Blanco said Thursday in a statement. “This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people.”

The seizure lawsuits, the first of which were filed last summer, include paintings by van Gogh and Monet, luxury real estate in New York, London and Beverly Hills, and profits from the movie “The Wolf of Wall Street,” which was produced by Red Granite. Red Granite was co-founded by Riza Aziz, Mr. Najib’s stepson.

The U.S. government also moved to seize luxury properties of Mr. Aziz as well as hundreds of millions of dollars in property and investments owned by his friend and Mr. Najib’s confidant, Jho Low. Mr. Low got to know Mr. DiCaprio starting in 2009, say people familiar with their relationship, and he later gave the actor several gifts that the Justice Department alleges were bought with money stolen from 1MDB.

“This week’s activity from the DOJ is a further example of global overreach in pursuit of a deeply flawed case,” Mr. Low said through a representative. “We look forward to the court being presented with the actual facts, which demonstrate that the DOJ’s case is completely without foundation.

A spokesman for Mr. DiCaprio said the actor is cooperating with the government and has given it the items he received, including an Oscar originally won by Marlon Brando in 1955 for best actor in “On the Waterfront.” The item was given to Mr. DiCaprio as a gift by Red Granite for his work on “The Wolf of Wall Street.”

The actor also received as gifts a painting by Pablo Picasso, a Diana Arbus photograph and a collage by Jean-Michel Basquiat, according to the suit.

Mr. DiCaprio has said the gifts were donations for a charity auction for his foundation.

Red Granite said in a statement that it is cooperating with the government and remains an active movie-production company.

The government has already sued Red Granite for future income from “The Wolf of Wall Street,” and the studio has agreed to separate its future earnings from the film pending the outcome of the investigation.

Mr. Aziz couldn’t be reached for comment. Previously, he has said he had no knowledge that the funds for Red Granite originally came from 1MDB.

The lawsuits also allege that Mr. Low had given $8 million worth of jewelry to Ms. Kerr from New York jeweler Lorraine Schwartz, including an 11.72 carat heart-shaped diamond on Valentine’s Day in 2014. Mr. Low and Ms. Kerr were dating at the time, according to a person who knows them. Ms. Kerr was married last month to Snap Inc. co-founder Evan Spiegel.

Most of the assets in the lawsuits belong to Mr. Low, a flamboyant Malaysian deal maker who is a central figure in the alleged misappropriation of funds from 1MDB, according to the Justice Department. His yacht was sighted Thursday off the coast of the Cambodian island of Koh Rong, according to ship-tracking site MarineTraffic.

The lawsuits allege Mr. Low used money siphoned from 1MDB to buy jewelry worth $200 million from companies around the world between April 2013 and September 2014. Some of that was given to Ms. Kerr, and nearly $30 million was given to Rosmah Mansor, the wife of Mr. Najib, according to the suits.

Ms. Rosmah received in early 2014 a 22-carat pink diamond necklace from Lorraine Schwartz worth $27.3 million, allegedly arranged by Mr. Low and paid for with money stolen from 1MDB, according to the suit. Later that year, Mr. Low arranged for Ms. Rosmah to get a further $1.3 million worth of gold necklaces from Lorraine Schwartz. A spokesman for Ms. Rosmah didn’t respond to requests for comment.

…more
U.S.’s Latest Target in 1MDB Probe: Leo DiCaprio’s Art, Miranda Kerr’s Jewelry
June 15, 2017 – WSJ

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