US pursues recovery of laundered 1MDB assets

On July 1, 2020, the US Department of Justice filed six verified complaints for forfeiture in rem, seeking the seizure and forfeiture of four paintings and drawings by Andy Warhol, Claude Monet, and Jean-Michel Basquiat, funds in four private bank accounts, and Paris real estate, allegedly acquired with funds stolen from the sovereign wealth fund of Malaysia, known as 1Malaysia Development Berhad or 1MDB.  According to the complaints, between 2009 and 2014, multiple public officials and their relatives conspired to divert billions of dollars from 1MDB, which was created as an investment and development fund for the benefit of the Malaysian people.  The complaints allege that the embezzled funds were laundered through shell companies and bank accounts located in the US and elsewhere, and ultimately used to invest in assets both in the US and abroad.

Specifically, the complaints divide the 1MDB conspiracy into four phases.  In Phase 1 between 2009 and 2011, over $400 million were allegedly transferred to a joint venture with PetroSaudi International, and from there to a Swiss bank account and then to the United States; in Phase II, approximately $1.367 billion from bond offerings were allegedly transferred to a Swiss bank account in 2012, and distributed among IMDB officials and others; in Phase III, $1.26 billion from bond sales were allegedly diverted to a bank account in Singapore throughout the course of 2013; and in Phase IV, $850 million were allegedly diverted under pretense of paying a collusive entity to buy back options given to guarantee the 2012 bond offering.  According to the allegations, the use of the US financial system was an essential feature in both the diversion of IMDB funds and the transfer of those funds throughout the world, and the funds were used to purchase the assets over which forfeiture is sought.

Since 2016, the United States has obtained the forfeiture of approximately $1.1 billion of 1MDB funds to be returned to the people of Malaysia. 

DOJ press release | Complaint (Monet et al.) | Complaint (Basquiat) |

Complaint (Warhol) | Complaint (Paris real estate) |

Complaint (Falcon accounts) | Complaint {Rothschild accounts) |

 

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