1MDB Scandal–Nobody is above the Law


July 22, 2016

1MDB Scandal–Nobody is above the Law

The US Department of Justice (DOJ) has detailed in its lawsuit what it described as the “three principal phases” of money laundering through the troubled Malaysian state fund 1MDB.

The first phase is called the ‘Good Star phase’, the second phase is the ‘Aabar BVI phase’ and the third phase is the ‘Tanore phase’.

Under the Good Star phase, the DOJ said that more than US$1 billion were fraudulently diverted from 1MDB.

“Between 2009 and 2011, under the pretense of investing in a joint venture between 1MDB and PetroSaudi International, a private Saudi oil extraction company, officials of 1MDB and others arranged for the fraudulent transfer of more than US$1 billion from 1MDB to a Swiss bank account held in the name of Good Star Limited,” the lawsuit states.

One of the ways 1MDB officials achieved this diversion of funds was by providing false information to banks about the ownership of Good Star, it said.

“Contrary to representations made by 1MDB officials, the Good Star account was beneficially owned not by PetroSaudi or the joint venture, but by Low Taek Jho, aka Jho Low, a Malaysian national who had no formal position with 1MDB but was involved in its creation,” it said.

Penang born Mr. Low–The Master Money Launderer

Low (photo), it added, had laundered more than US$400 million of the misappropriated funds from 1MDB through Good Star into the US, after which the funds were used for “the personal gratification” of Low and his associates.

Following that was the Aabar BVI phase, where the DOJ alleged that approximately US$1.367 billion was misappropriated from 1MDB.

The US$1.367 billion were a portion of the proceeds that 1MDB raised through two separate bond offerings arranged and underwritten by Goldman Sachs International in 2012, according to the lawsuit.

The bonds were guaranteed by both 1MDB and International Petroleum Investment Company (IPIC), it added.

“Beginning almost immediately after 1MDB received the proceeds of each of these two bond issues, 1MDB officials caused a substantial portion of the proceeds – approximately US$1.367 billion, a sum equivalent to more than 40 percent of the total net proceeds raised – to be wire transferred to a Swiss bank account belonging to a British Virgin Islands entity called Aabar Investments PJS Limited (Aabar BVI),” the lawsuit read.

Aabar BVI had been created and named to give the impression that it was associated with Aabar Investments PJS (Aabar), a subsidiary of IPIC, though in reality there is no affiliation between Aabar BVI with Aabar or IPIC, it said.

“The Swiss bank account belonging to Aabar BVI was used to siphon off proceeds of the 2012 bond sales for the personal benefit of officials at IPIC, Aabar and 1MDB and their associates,” it said.

The funds diverted, it added, were transferred to, among other places, a Singapore bank account controlled by Eric Tan, an associate of Low.Those funds were then distributed for the personal benefit of various individuals, including officials at 1MDB, IPIC or Aabar, the document reads.

‘Complex series of transactions’

After that came the Tanore phase, where DOJ said that several individuals, including 1MDB officials, had in 2013 diverted more than US$1.26 billion out of a total of US$3 billion that 1MDB had raised through a third bond offering from Goldman Sachs.

The proceeds of this bond offering were supposed to fund a joint venture between 1MDB and Aabar, called the Abu Dhabi Malaysia Investment Company (Admic), the lawsuit said.

However, days after the bond sale, a significant portion of the proceeds was instead diverted to a Singapore bank account held by Tanore Finance Corporation, in which Tan was the recorded beneficial owner, it said.

“Although the Tanore account had no legitimate connection to 1MDB, the then executive director of 1MDB was an authorised signatory on the account. 1MDB funds transferred into the Tanore account were used for the personal benefit of Low and his associates, including officials at 1MDB, rather than for the benefit of 1MDB or Admic,” the document reads.

The DOJ said that the proceeds of each of these phases were laundered through a complex series of transactions, including through bank accounts in Singapore, Switzerland, Luxembourg and the US.

Numerous assets were acquired with these funds that were unlawfully diverted from 1MDB or could be traced to the state fund, it said. As such, it explained, the assets are subject to forfeiture under US laws.

The DOJ had earlier filed the lawsuit in Los Angeles, seeking to seize assets located in US and abroad, including in the UK and Switzerland, as they alleged that the assets were involved in money laundering.

The assets include mansions, artwork, a private jet and gambling debt in Las Vegas casinos.

Riza Aziz–The Son of Malaysia’s presumptive First Lady

Other than Low, the lawsuit also named Prime Minister Najib Abdul Razak’s stepson Riza Aziz and two Abu Dhabi government officials.The two Abu Dhabi government officials are Khadem al-Qubaisi and Mohamed Ahmed Badawy Al-Husseiny.

Najib was not named in the lawsuit.In an immediate response to allegations, the Prime Minister’s Office (PMO) said the government would “fully cooperate with any lawful investigation of Malaysian companies or citizens in accordance with international protocol”.

According to Najib’s press secretary Tengku Sarifuddin Tengku Ahmad, the Prime Minister has always maintained that the law would be enforced, without exception, if any wrongdoing is proven.–Reuters-www.malaysiakini.com

Related reports

It’s official – the 1MDB money was stolen

US$731m siphoned from 1MDB to ‘Malaysian Official 1’ account, says DOJ

Malaysian gov’t will cooperate with US lawsuits on 1MDB

US delivers a tight slap in the face to M’sian authorities

1MDB says it didn’t benefit from items listed in US suit

Red Granite denies ‘knowingly used’ stolen funds for film

US Justice Dept goes after 1MDB-linked assets; snap polls blizzard in Penang

Minister: Don’t rush to judgment on 1MDB crackdown in US

Properties, jet, litany of assets listed in US Justice Dept lawsuits

‘M’sians defrauded on enormous scale, 1MDB funds used to pay gambling debts’

Poser over ‘Malaysian Official 1’ in DOJ’s civil lawsuits

‘Surely, Najib won’t accuse golf buddy Obama of conspiracy’

No escape for Najib’s 1MDB troupe

Goldman Sachs under spotlight in Malaysian fund scandal

Read more: https://www.malaysiakini.com/news/349302#ixzz4F4p9pQwY

 

18 thoughts on “1MDB Scandal–Nobody is above the Law

  1. It’s clear Najib is relying that he himself will not be found guilty or his stepson not found guilty as willful excuse. Not the facts of the case which already is clear he broke our law.

    Fact is, Malaysia is defined as Kleptocracy. The issue isn’t even whether we have rule of law, we do n’t. The issue is whether race and religion has poisoned us to be out of touch with reality.

  2. Wondering if British authorities will be seizing properties in
    Knightsbridge and other posh areas of London
    (where 1Malaysian kleptocrats buy property with
    stolen Malaysian tax payer ringgits) soon?
    Cayman Islands are British possessions, right?

    P.S. A few days ago, I walked past the former property
    of Libyan dictator Khadafy and his son in Knightsbridge.
    It is now the Embassy of Libya 🙂

    ______________
    Ask Theresa May and Najib fan, Boris Johnson, that question? –Din Merican

  3. Claire Rewcastle Brown deserves a big prize for her investigative journalism.

    The courageous whistle blowers and upright officials within the Malaysian civil service who leaked documents to her also deserve loud and sustained applause.

  4. Nobody is above the Law and this is what the law books and law makers say and the averages citizens hope for.
    Unfortunately it is a WORLD WIDE CULTURE that
    EVERYBODY IN POSITION OF POWER OR THOSE RELATED OR CONNECTED TO THOSE WITH POWER OVER THOSE RESPONSIBLE FOR DRAFTING-REGULATING-ENFORCEMENT-JUDGEMENT OF LAWS MAY ALL BE EXEMPTED whereas THOSE WITH FINANCIAL POWER CAN BUY or NEGOTIATE FOR EXEMPTIONS FROM LWAS or PENALTIES IF CONVICTED.

    DEMOCRACY COMBINED WITH CAPITALIST FREE ECONOMY FACILITATES.

  5. This kind of GREED is above race and religion. Most people in power are overcome by Greed everywhere….

    Here, it looks like the whole scheme , has been schemed by any shrewd con man (acting as the intermediary ) to get into ‘ contact ‘ with a VIP & will then be led to the V V I P for necessary steps to Skive off ( or hive -off ) huge chunk of INITIAL funding , for so-called ‘ investments ‘ into projects and buying of assets….It does not matter these may be Decrepit assets , but ALL operations need to be off-shore and out of reach of the long-arm of Lex Domicili (or local laws ). – and here , allegedly the INITIAL skive-off was US 1.3 billion on first release of Funds to 1MDB. (the whole objective of the exercise ….? ? )

    The Subsequent or later steps will be NECESSARY as to how to cover-up ?

    One cannot avoid Perception : first, remove possible ‘ opponents ‘ seen to be obstructing their ‘ cause ‘ , like political opponents and quickly replace , then on to Public servants in powerful positions like AG , Governor and the Chief who decides on Prosecution of ‘possible ‘ criminal proceedings ……etc.

    Finally , on the ‘defiicit ‘ of the initial monies, the cover-up quickly as to how to satisfy Financial Accounting proceedures , is indirect taxes on GST …..and of course the Value of the Decrepit assets , which SHOW surplus , or above short-falls , howsoever incurred…..

    THE INITIAL SKIVING-OFF was the whole objective of this current Rigmarole…..but well brought out by the author of the Article , to try & suit possible criminal proceedings, if any…..

    (remark : a lay man like me who is unable to put it in professional language as in Accounting terms….. – cheers ! )

  6. I am anxiously waiting to hear what Salleh Said Keruak, Rahman Dahlan, Ismail Sabri, Azalina Othman, Nazri Aziz and the dozen or so other Ministers defending the term “Malaysian Official 1”. Betcha they will say the Americans don’t understand how we do business in Malaysia, dont understand Malaysian culture, afraid to name the person and instead say Malaysian Official 1 and last but not least interfering in the domestic affairs of Malaysia and a grand conspiracy to topple the legally elected government of Malaysia.

  7. Yup semper, that’s exactly what those intellectually-morally-ethically challenged paragons of UMNOb hacks are saying right now or sooner rather than later. Otoh, the lap-mongrels component with the exception of idiot Gerakan Youth are keeping an elegant silence.

    MO1 (Malaysian Official 1), is trying to keep the Panic Button close to the flaccid bosom of his spouse – knowing that even their proxy’s Monet’s and van Gogh masterpieces have been seized – and soon all the properties/assets in US-Switzerland-Singapore-UK-Lichtenstein nexus will be frozen.

    No worries about senor Aziz, the stepson as he can easily morph into a Hispanic and retain control of the Malaysia monopoly for import of quinoa grain. Buddy Feh Loh’s assets have gone kaput or are now deep underground.

    Btw how do you impound a Bombardier and luxury yacht without setting fire to them?

  8. Why Najib not named directly?

    Perhaps the “Malaysian Official 1” is still useful at the moment to US’s foreign & domestic policy interests, especially on intelligence gathering in the War on Terror as Malaysia is still a friendly “Muslim” country and also having commercial dealings with China a good handle on the movement of Chinese state funds around the World.

  9. Tunku Abdul Aziz has explained the whole thing very well in Sinar today.
    __________________
    What is the link? Din Merican.

  10. Quite apart from the shameful illegality of the whole 1MDB scam. The perpetrators were really foolish. Rather than just quietly enjoy the ill-gotten funds, they wanted to buy into the Western-Hollywood-celebrity set, which only generated publicity on themselves, and exposed them to questions about how they got the money. Financing a major Hollywood movie with laundered money is really very stupid. Buying a penthouse at the iconic Time Warner building in NYC is also stupid. Buying the EMI music-publishing business and trying to buy Reebok is the height of foolishness. These shenanigans only attract international media attention. Of course people will be curious about where these young hot-shots who seem to come out of nowhere got their money.

    If they had parked the cash in secretive private banks around the world – Cayman Islands, Virgin Islands, Switzerland, HK, Singapore etc. – and just simply kept quiet and enjoy life, it would have been easier to get away with it.

    This is how a savvy keptocract does it under the radar:
    https://www.theguardian.com/news/2016/apr/03/panama-papers-money-hidden-offshore

  11. From 1981 / 83 ”BMF Rm 2.5 Loan Loss ”, the mother of all the countless scandals that follow, involving HUNDREDS of BILLIONS lost, a few lives lost, and largely, the Umno Baru Leaders and members, NOTHING or little happened, except, may be with the culprits got away, with a tap on the hands.

    Would something happen for this 1 MDB?
    Really ?????

  12. /// Sang Kancil July 22, 2016 at 4:25 pm
    Come what may it’s the beginning of the end! ///

    Nah, it is just the end of the beginning. You wait long long…..

  13. MO1: Alamak! Can no longer stash my cash in USA, Singapore and Switzerland.

    WMO1: Britain, Australia, still OK (for the moment?). Kazakhstan, Saudi Arabia, memang boleh. Relatives in the first, friendly Sugar Daddy in the second.

  14. Quote:- “Rather than just quietly enjoy the ill-gotten funds, they wanted to buy into the Western-Hollywood-celebrity set…”

    2 reasons.

    1. Sheer bloody arrogance, a noticeable trait of graduates from Ivy League schools, and couple that with the “catch-me-if-you-can” syndrome borne of classroom fantasy game theories. Ironically also from a film starring Leonardo Dicaprio who starred in “Wolf of Wall Street” and famously “Titanic” which, unless you’ve just arrived from Alpha Centuri, you should know is about an unsinkable ship which promptly sunk on its maiden voyage.

    So the idea must have been 1MDB was “unsinkable”, had a captain which was “untouchable” and therefore all passengers were “un-drownable” They did not factor in the “Iceberg” in the form of an old doctor who, though just like an iceberg, had 90% of his own “skeletons” hidden under the Blue Ocean, was able to shed his serpentine fangs and surreptitiously transformed into a gracious saint which even his old enemies couldn’t hold a candle to. Yes, nothing is impossible in politics.

    2. When you suddenly came upon fabulous wealth which you thought no one could question as to its source before your 40th birthday without having to slog decades for, especially when your ingenious planning and textbook executions were big contributing factors, would you not feel light-headed, “grown” a few inches taller, and “feel the Earth move under your feet?”

    Would you not like the World to know who and how great you are to the extent of having Paris Hilton as your party guest? Why buy a Ferrari and hide it in the garage?

    The irony, (there are ironies everywhere, like “The Wolf of Wall Street” was funded criminally, the American AG has the surname “Lynch”), was all these people, principally Jho Low, Riza Aziz, were not crooks or criminals by nature, background or profession. If they were, circumspection would have been second nature to them. Professional criminals would not show off their wealth, at least not publicly.

    The two young men were so sure they would not be caught, so why worry. They were partially right as even the Deputy FBI director admitted it took a few mighty US government agencies which have world-wide assets and resources working across national borders with a few other countries to unearth up to now only a part of the whole scheme.

    If there were no criminality involved, no loss of the people’s wealth and no personal gain, these young men should be commended. But alas, the deadly sins of greed, pride, arrogance proved so strong that apparently very intelligent people could not escape from.

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