Archive for the 'Corruption' Category


1MDB-Linked Yacht Won’t Be Setting Sail Soon

1MDB-Linked Yacht Won’t Be Setting Sail Soon

JAKARTA, Indonesia—A potentially prolonged custody battle is unfolding over a $250 million yacht allegedly connected to the 1MDB global scandal, with lawyers moving on multiple fronts to block the U.S. from seizing the boat.

The moves could upend a U.S. win against a Malaysian financier the Justice Department alleges is a central player in a $4.5 billion scandal that has spawned investigations in several nations.

Last month, Indonesian police seized the 300-foot Equanimity, acting on the request of the Federal Bureau of Investigation, who had sought the vessel for months. The U.S. has asserted in court filings that U.S. laws were broken in the larger 1MDB case, and that gives it rights to seize assets.The Justice Department had hoped to quickly transport the boat to the U.S. to sell, but a legal challenge to invalidate the seizure has been launched by Indonesian lawyers representing a claimant to the Equanimity in the Indonesian court system.

On Wednesday, a Jakarta court spokesman said hearings in the case would begin April 9, with a decision expected by mid-month. Legal experts said that either party losing the decision would likely take further legal actions.

The Justice Department alleges that 36-year-old Jho Low, the financier, helped siphon off at least $4.5 billion from Malaysian state investment fund 1Malaysia Development Bhd. between 2009 and 2015. Since mid-2016, the U.S. has sought, via civil lawsuits in California, to seize almost $2 billion in assets allegedly bought with the stolen money, including the Equanimity, a Bombardier jet, mansions and royalties from the film “The Wolf of Wall Street.”

The Equanimity had eluded U.S. authorities until February, when it sailed to waters off Bali, Indonesia.

Separately, in U.S. federal court records filed Monday in California, lawyers representing companies claiming the Equanimity argued that U.S. government plans to take control of the boat using a reduced crew and then quickly sail it to the U.S. to sell it were “ill-conceived” and threatened the value of the boat.

They asked the U.S. District Court for the Central District of California to allow the Equanimity to remain in Indonesia for at least 30 days and preclude the U.S. government from taking actions against it. The U.S. “directed a theatrical ‘seizure’’’ of the Equanimity which “was carried out in breach of Indonesian law,” lawyers said in the filing.

The Equanimity’s lawyers didn’t mention Mr. Low by name. The Justice Department says Mr. Low, also known as Low Taek Jho, purchased the boat in 2014.

In its own filings Monday, the Justice Department asked the California court to appoint the U.S. government custodian of the boat, arguing that claimants to the Equanimity have gone to “extraordinary lengths” to keep the boat out of the U.S. government’s reach.

They contend that Mr. Low instructed the crew to turn off the vessel’s automatic identification system “as soon as news broke” about the civil forfeiture case in the U.S. last year. Lawyers for the Equanimity said in their filing that the boat’s “long-range identification and tracking system” was never turned off, and that the separate AIS is sometimes turned off based on “warnings regarding potential hijackings and kidnappings.” The Justice Department said in its filing that the Equanimity was not in a high-risk territory when it allegedly turned off its AIS after news broke of the forfeiture case.

The Justice Department’s filings also say that Mr. Low, communicating via the messaging app WeChat , told crew to avoid sailing in U.S. territorial waters as well as those of Singapore and Australia, two key U.S. allies, and instead stick to jurisdictions such as Vietnam and Cambodia. The Equanimity’s filings do not address the issue.

1MDB-Linked Yacht Won’t Be Setting Sail Soon
March 28, 2018 – WSJ


Multibillion dollar 1MDB heist

Multibillion dollar 1MDB heist: THE DOJ LAWSUIT REVISITED

The seizure of The Equanimity luxury yacht in Bali, Indonesia, in late February this year, has once again brought the civil forfeiture suits by the US Department of Justice (DOJ) into the spotlight.

The DOJ had filed a series of the forfeiture suits in 2016 and 2017, seeking to seize assets worth nearly US$1.7 billion allegedly acquired using money siphoned off from the Malaysian fund 1Malaysia Development Berhad (1MDB).

According to the DOJ, 1MDB officials and their associates had embezzled US$4.5 billion between 2009 and 2014, which was allegedly laundered through the global financial systems including the US. It is the most extensive action brought under its Kleptocracy Asset Recovery Initiative. The department said that the money was used for personal gain.

They include purchasing luxury properties, artworks, a private jet, jewellery, funding movie production company which produced movies like “The Wolf of Wall Street”. The Equanimity, which is said to belong to Malaysian businessperson Jho Low, was one of the assets on the list.

Jho Low, whose full name is Low Taek Jho, was portrayed as the mastermind of the money laundering scheme in the DOJ lawsuit. Several other persons were named in the lawsuits, including Jho Low’s friend Riza Aziz, who is also the stepson of Malaysian Prime Minister Najib Abdul Razak, several 1MDB officers, and an unnamed “Malaysian Official 1”, who was said to be Najib himself.

Several celebrities, including Hollywood actor Leonardo Dicaprio and model Miranda Kerr were dragged into the matter.

The lawsuits had categorised the money-laundering processes over the five-year period into four phases, namely the “Good Star phase”, “Aabar BVI phase”, “Tanore phase” and “Options Buyback phase”.

The lawsuits consist several hundred pages long and provide a blow-by-blow account of the complex series of transaction. This article will break down the complexities of the suits and walk readers through the money trail.

Multibillion dollar 1MDB heist:
31 March 2018 – malaysiakini


Jho Low bought Equanimity with 1MDB funds – DOJ says it, again

Jho Low bought Equanimity with 1MDB funds – DOJ says it, again

The US Department of Justice has again reiterated that Malaysian national Low Taek Jho bought the US$250 million megayacht the Equanimity with funds allegedly “stolen and embezzled” from 1MDB.

“Indeed, as alleged throughout the complaint (by the DOJ), Low was a central player in orchestrating the theft of billions of dollars from 1MDB,” said the DOJ in a court filing yesterday, as sighted by Malaysiakini.

This was part of the DOJ’s request to the US District Courts for the Central District of California for an order to appoint the US government as the custodian of the Equanimity.

The DOJ also sought an order for Low’s representatives to tender megayacht into the government’s custody in order for the vessel to be brought to the US for forfeiture purposes.

In the filing, the DOJ alleged that Low engaged in a “game of keep-away” upon knowing that the department sought to seize the Equanimity, by instructing the ship’s crew to turn off the Automatic Identification
System (AIS) and avoid the US and close US allies Australia and Singapore.

“The Equanimity’s captain was told to instead stick to other jurisdictions, like Vietnam and Cambodia, where the Equanimity was deemed ‘safe’.

“Low’s directives were apparently complied with,” said the DOJ.


The DOJ said that Low’s agents had gone to “extraordinary lengths” to keep the yacht outside the hands of the US government.

“They have turned off the Equanimity’s AIS to make the yacht harder to detect. They have structured the Equanimity’s travels to avoid any jurisdictions where the Equanimity was likely to be seized.

“When they miscalculated in Indonesia and saw the yacht seized, they filed suit to resist the seizure and prevent Indonesia from surrendering the yacht to the government.

“And even when they have engaged with the government about a possible interlocutory sale of the yacht, they insisted that the yacht not be brought into the United States,” said the DOJ in the document sighted by Malaysiakini.

These machinations by Low’s agents, added the DOJ, had obstructed the warrant to seize the Equanimity, which will only have full effect when the ship is brought to US territory.

In arguing for an order to appoint the government the custodian of the Equanimity, the DOJ argued that Low’s agents “might not be trusted” to bring the yacht to the US on their own.

“After all, they have already obstructed the court’s arrest warrant (against the Equanimity) in rem. It is hardly far-fetched to think that they might also obstruct or defy an order to sail the yacht to the United States,” he said.

Previously, Multimedia and Communication Minister Salleh Said Keruak had claimed that there was “no tangible proof” that Low was the owner of the Equanimity, following the seizure of the vessel last month.

Last night, Salleh told a gathering of foreign correspondents that US DOJ filings on 1MDB won’t be considered “fake news”.

“You can quote them, what did they say, based on the filings. It is not considered fake news. It’s their views. Like DOJ, you quote them, what they said,” he said.

Jho Low bought Equanimity with 1MDB funds – DOJ says it, again
27 March 2018 – malaysiakini


Jho Low balks at US plan to move seized yacht

Jho Low balks at US plan to move seized yacht

Lawyers for Malaysian businessman Low Taek Jho say the US government does not know how to maintain or market a yacht like the Equanimity.

The Equanimity was seized by the Indonesian government in Bali last month.

LOS ANGELES: Low Taek Jho, the Malaysian financier accused by the US of orchestrating a scheme to siphon US$4.5 billion from a government fund, is balking at Justice Department (DoJ) plans to move his US$250 million yacht to the US from Indonesia.

“The government does not know how to properly maintain or market a luxury yacht as unique and distinctive as the M/Y ‘Equanimity’,” lawyers said in a request on Monday for an emergency order to keep it anchored in Bali.

The attorneys represent the trusts that are fighting the US forfeiture lawsuit for the seized 300-foot vessel.

“For instance, the government is contemplating reducing the number of crew members from more than 20 to just eight, a number so low that it would endanger the lives of the crew on board and wreak havoc on the condition of the yacht,” they said.

In addition, the DoJ wants to sell the yacht in the US, where the market for luxury yachts is “anaemic” through the end of the fall, according to the filing in federal court in Los Angeles, compared to Mediterranean locations such as Monaco or Barcelona.

There’s no evidence that a sale in the US would diminish the yacht’s value, the DoJ said in a court request to gain custody of the Equanimity. The government cited a 2017 Global Superyachts Market Analysis report in which North America held a 45% market share for the sale of “superyachts”.

In June, US prosecutors filed a second round of forfeiture lawsuits in their efforts to recover assets they claim were acquired with money stolen from 1MDB.

The claims included the yacht Low, commonly known as Jho Low, bought in 2014, as well as a US$1.29 million heart-shaped diamond and a US$3.8 million diamond pendant he gave that year to his then-girlfriend, actress Miranda Kerr.

Other assets linked to stolen 1MDB funds include real estate in London, New York and Beverly Hills, a stake in EMI Music Publishing and a US$35 million Bombardier Jet.

After the DoJ filed its forfeiture lawsuit against the yacht last year, Low instructed its crew to keep it away from countries such as Singapore and Australia, whose governments were likely to seize the vessel, and instead stick to “safe” places such as Cambodia and Vietnam, according to the US’ filing.

When the US learned last month that the yacht was moored off the island of Bali, it asked the Indonesian government to seize it and hand it over. The trusts that claim ownership of the yacht have filed a lawsuit in Indonesia challenging the seizure.

Jho Low balks at US plan to move seized yacht
March 28, 2018 – FMT


Malaysia’s dire democratic crisis

Malaysia’s dire democratic crisis

Malaysia is gearing up for its 14th general elections, to be held by Aug. 24, 2018. Its parliament is expected to be dissolved within weeks.

Prime Minister Najib Razak and his ruling coalition, Barisan Nasional (BN), are pulling out all the stops to tilt the level playing field, making them likely to win despite a strong opposition coalition led by former strongman prime minister Mahathir Mohamad.

Malaysia’s ruling party, the United Malays National Organization Party (UMNO), has ruled through a coalition alliance under BN for 60 uninterrupted years since the country declared independence from the British Empire.

Embattled by the 1Malaysia Development BHd (1MBD) corruption scandals and protests since 2015, Najib has managed to cling on to power by removing or buying off anyone investigating the scandal.

Najib has consistently denied channelling nearly US$700 million from 1MDB state funds to his personal bank accounts. He sacked his deputy, Muhyiddin Yassin, and replaced the attorney general over critical comments both made about the scandals.

Will his coalition, BN, hold on to its majority seat shares in this general election?

The last election, in 2013, was the closest fought in the country’s history. The BN coalition’s share of the popular vote slipped to 47 per cent, but it’s holding on to 60 per cent of Malaysia’s 222 parliamentary seats.

The euphoria for liberalization in Malaysia following the 2013 election has dwindled since the leader of the opposition coalition, Pakatan Harapan’s Anwar Ibrahim, was jailed for sodomy in 2014. With Anwar behind bars, Pakatan Harapan has put forward the most unlikely candidate, Anwar’s former boss and nemesis, the 92-year-old Mahathir Mohamad, to run against Najib for prime minister.

What’s at stake?

Opposition forces staged protests in the capital of Kuala Lumpur in 2016 and lobbied for stronger rule of law to end impunity and corruption in Malaysia. The opposition’s support is typically concentrated in urban areas, while the BN’s support is spread across rural areas.

In this election, Malaysian states Selangor, Johor and Kedah are emerging as key battlegrounds for the opposition coalition.

Johor, once a haven for BN supporters, has seen segments of Malay voters turn against the ruling party due to rising costs of living and corruption. If the BN loses these key states, it will follow in the footsteps of former longstanding hegemonic parties such as Taiwan’s Kuomintang Party and Mexico’s Institutional Revolutionary Party to lose dominance as the Malaysian system becomes more competitive and multi-party.

Malaysia’s elections are now among the most manipulated in the world.

Aside from restrictions on media freedom and the blocking of political blogs, the BN has used a range of tactics in the menu of manipulation such as gerrymandering, malapportionment, pork-barreling, opposition intimidation and jailing opponents to repress electoral competition.
Gerrymandering, Malaysian-style

The redrawing of electoral districts through “packing” opposition voters into a few seats or the “cracking” of opposition strongholds and absorbing them into adjoining constituencies — in the case of Beruas in Perak state —has benefitted the BN.

The gerrymandering by Malaysia’s Election Commission has also exacerbated malapportionment — meaning one electoral district has fewer voters than another but both get equal representation — and the separation of constituencies into highly populated urban areas and large, less populated rural areas.

Despite constitutional provisions that constituency sizes should be “approximately equal and not vary in size by more than 15 per cent,” this was amended to 33 per cent.

This redrawing of boundaries has led to large pro-opposition constituencies with more than 100,000 voters, while pro-BN constituencies are disproportionately small with 30 having fewer than 18,000 voters.

This means that the value of each vote changes dramatically across the country. Opposition candidates now need more votes than their BN counterparts to get elected.

Malaysia’s dire democratic crisis
Netina Tan, Cassandra Preece
March 25, 2018 –


Pakatan’s GE win will stop Najib from destroying Malaysia, says Dr Mahathir

Pakatan’s GE win will stop Najib from destroying Malaysia, says Dr Mahathir

PRIME Minister Najib Razak will not be able to destroy the country if Pakatan Harapan (PH) were to win the 14th general election, said Dr Mahathir Mohamad.

The Pakatan Harapan (PH) chairman said although it was difficult to unite the opposition to restore Malaysia after Barisan Nasional’s 60-year rule, it was the better choice rather than “letting Najib maintain his kleptocracy”.

“It is not easy for PH to restore the nation but when we rule, Najib will no longer be able to destroy the country,” said the former prime minister in his latest post on his blog

“Some will think that PH cannot do anything to make things better.

“But the destruction of the nation will be worse if Najib can maintain his kleptocracy. The burden of debts will increase and the country’s states will be sold.”

Dr Mahathir, however, said his team was experienced in saving and restoring the economy, finance, and socio-politics of the nation.

“That we are certain. Reject the kleptocracy of Najib,” he said.

When Dr Mahathir was prime minister from 1981 to 2003, Malaysia had several times faced financial crisis. One is the Asian Financial Crisis of 1997 which Dr Mahathir through his policies helped manoeuvre the country out of trouble.

Dr Mahathir also said since the nation’s independence, the good name of Malaysia had never been tarnished so badly like now with Najib as the prime minister.

“Yes, our country has been threatened before by the Internal Security Act (ISA). There has also been corruption in the government under the leadership of Tunku Abdul Rahman, Tun Razak, Tun Hussein and also me.

“But these things had not made Malaysia to be called a nation of graft along with ten other countries in the world that has high levels of corruption – not to a point where the nation is declared a kleptocracy led by criminals, thieves,” he said.

According to Dr Mahathir, the prime minister of Malaysia is said to be “a corrupt leader who is involved in scandals involving billions of government funds, with his name mentioned in several money laundering cases involving 1Malaysia Development Bhd (1MDB).”

“The reports on newspapers and television globally clearly and openly reveal that the purchase of luxury homes in London, New York and Hollywood, the purchase of the jetliner, mega yacht, pieces of jewellery worth billions for the prime minister’s wife, gambling in Las Vegas, gifts worth millions to pretty ladies and all sorts of ways to clean the money stolen from the 1MDB fund,” he wrote. – March 27, 2018.

Pakatan’s GE win will stop Najib from destroying Malaysia, says Dr Mahathir
27 Mar 2018 – TMI


How 1MDB funds did (or didn’t) end up in Switzerland

How 1MDB funds did (or didn’t) end up in Switzerland

KINIGUIDE | Over the past few years, there had been contradictory claims regarding the 104 million Swiss francs (RM403 million) that now rest at the Swiss Federal Treasury.

Swiss authorities claim that the money was the illegal proceeds from 1MDB-linked transactions that passed through its financial system.

The Swiss government intends to absorb the funds since there were no claimants and a bid by a group of Swiss parliamentarians to urge their government to return at least part of the funds to the Malaysian people was voted down at the Swiss National Council.

Nevertheless, efforts are underway by Malaysian NGOs and a group of Swiss lawmakers to put the matter back in the Swiss parliament.

1MDB and the Finance Ministry that owns it, meanwhile, have said it would not claim the money because it does not belong to them in the first place. Both said there has been no misappropriation at 1MDB, and all monies are accounted for.

In this instalment of KiniGuide, we look into how the money got there, and what various authorities have to say about it.

Where did the money come from?

The 104 million Swiss francs are fines levied on three different banks in Switzerland, representing the disgorgement of illegal profits they obtained for facilitating 1MDB-related transactions without the necessary due diligence for such a transaction.

The bulk of this comes from BSI Bank. On May 24, 2016, the Swiss Financial Market Supervisory Authority (Finma) announced that it had ordered BSI to turn over 95 million Swiss francs from illegally generated profits.

Next came Falcon Private Bank. On Oct 11, 2016, apart from other penalties, it was similarly ordered by Finma to disgorge 2.5 million Swiss francs of illegally-generated profits.

And finally came Coutts & Co Ltd. On Feb 2 last year, Finma ordered it to disgorge 6.5 million Swiss francs of illegally generated profits.

The total profits surrendered by these three banks came to 104 million Swiss francs. It was reported that the BSI Bank and Falcon Bank cases are still under appeal at the Swiss Federal Administrative Court.

Banks all around the world are required to perform due diligence checks on their businesses to deter money-laundering and other illicit activities, particularly transactions that are deemed “high risk” such as due to the involvement of politically-exposed persons (PEPs).

High-risk transactions are supposed to be given a higher degree of scrutiny by banks and this may entail providing the bank with supporting documents to show that the transaction is for a legitimate purpose.

In Switzerland, these rules are enforced by Finma, whereas Bank Negara does the same in Malaysia.

“PEP” is a term used in the finance industry to refer to people who hold a prominent public office (such as a head of state or government, senior civil servants and key party officials) and their friends and associates.

Why was BSI Bank fined?

According to a press release by Finma, BSI had repeatedly failed to put 1MDB-related transactions through an appropriate level of scrutiny over several years, given the involvement of a state investment fund and politically exposes persons (PEPs).

This lapse was in breach of statutory due diligence requirements for tackling money-laundering and violates principles of adequate risk management, it said.

“In the context of the 1MDB case, the bank failed to adequately monitor relationships with a client group with around 100 accounts at the bank. Transactions were executed within the client group and with third parties without the bank adequately clarifying their commercial justification.

“In one case involving a deposit of US$20 million, for example, the bank was happy to accept the client’s explanation that the funds involved were a “gift”. In another case, an account was credited with more than US$98 million without any effort to clarify its commercial background,” Finma said.

It added that BSI was charging above normal market rates and the bank’s senior management failed to question why a sovereign wealth fund would use a private bank for institutional services and overpay for those services.

It said these and other infractions were made despite warnings from Finma in late 2013 and the bank’s own compliance department.

What was BSI’s involvement with the 1MDB scandal?

Finma said, “In the case of 1MDB, the bank executed numerous large transactions with unclear purpose over a period of several years and, despite clearly suspicious indications, did not clarify the background to these transactions.”

However, it did not elaborate much beyond this.

In the Public Accounts Committee (PAC) report tabled in the Dewan Rakyat on 1MDB, PAC said that as of March 31, 2014, 1MDB had invested US$1.56 billion for portfolio management at BSI’s Lugano branch in Switzerland.

The money is a part of nett proceeds from a US$3 billion bond issuance that was originally meant to raise funds for a joint venture with the Abu Dhabi-based Aabar Investments PJS to invest in the Tun Razak Exchange project (TRX).

“The audit by the National Audit Department found that 1MDB did not inform the Minister of Finance Incorporated (MOF Inc) regarding the change in decision on issuance of the fund which was to be invested in the fund investment up until the investment by (the joint venture) Admic was finalised […]” the report said.

Instead, about US$1.02 billion went to 1MDB and 1MDB Energy, another US$35 million was donated to Yayasan Rakyat 1Malaysia, and US$1.5 million went to the 1MDB subsidiary Brazen Sky Ltd. The remaining US$1.58 billion was invested abroad.

The US Department of Justice’s (DOJ) court filings, provide the most detailed account of the alleged 1MDB money trail to date.

How 1MDB funds did (or didn’t) end up in Switzerland
26 March 2018 – malaysiakini

What happened to 1MDB’s money? – CNBC Video
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How the 1MDB Scandal Spread Across the World (WSJ)
We cannot afford ridiculously expensive RM55 Billion ECRL!
All that is necessary
for the triumph of evil
is for good men
to do nothing.

- Edmund Burke
When the people
fears their government,
there is TYRANNY;
when the government
fears the people,
there is LIBERTY.

- Thomas Jefferson
Do you hear the people sing?