1MDB-related settlement of civil forfeiture cases
Wednesday, September 2, 2020
United States Reaches Settlement to Recover more than $60 Million Involving Malaysian Sovereign Wealth Fund
The Department of Justice has reached a settlement of its civil forfeiture cases against assets acquired by Riza Aziz utilizing funds allegedly embezzled from 1Malaysia Development Berhad (1MDB), Malaysia’s investment development fund, and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg.
These assets are estimated to be worth more than $60 million. With the conclusion of this settlement, together with the prior disposition of other related forfeiture cases, the United States will have recovered or assisted in the recovery of nearly $1.1 billion in assets associated with the 1MDB international money laundering and bribery scheme. This represents the largest recovery to date under the department’s Kleptocracy Asset Recovery Initiative and the largest civil forfeiture ever concluded by the Justice Department.
“As alleged in the forfeiture complaints, Riza Aziz and others collectively laundered billions of dollars pilfered from 1MDB, an investment fund intended to benefit the Malaysian people,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division. “Aziz and his co-conspirators allegedly diverted these funds for their own benefit and used them to acquire luxury real estate in New York and London and to make personal investments. The forfeiture of these assets will add to the almost $1.1 billion stolen from 1MDB that the U.S. Department of Justice has so far helped recover and return to the Malaysian people. This forfeiture sends a clear signal that the Department will not allow wrongdoers to use the U.S. financial system to launder the proceeds of their illegal activity.”
“With more than $1 billion forfeited as a result of our 1MDB-related asset forfeiture cases, we continue to shed light on the massive fraud and money laundering scheme that brazenly stole public funds belonging to the people of Malaysia,” said U.S. Attorney Nick Hanna of the Central District of California. “The high-end properties across the nation that have now been seized and forfeited demonstrate our commitment to preventing corrupt actors from using the United States as a place to hide stolen riches.”
“This case represents significant, unwavering investigative work by the FBI’s International Corruption Team and our partners,” said Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division. “Riza Aziz and his co-conspirators misappropriated and laundered billions of dollars away from Malaysian people for their personal gain, and they will not be permitted to profit. The FBI is committed to bringing all those who participated in this heinous scheme to justice and holding them accountable for the illicit actions.”
“The recent seizure of $60 million is another step on the path to return embezzled funds to the people of Malaysia,” said Don Fort, Chief, IRS Criminal Investigation (IRS-CI). “IRS-CI is committed to ensuring monies stolen from 1MDB are returned to their rightful beneficiaries and used for their original intended purpose.”
According to the civil forfeiture complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates and laundered through financial institutions in several jursidictions by Malaysian public officials and their associates, including Aziz. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.
Under the terms of the settlement, the claimants in the U.S. forfeiture actions agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest. Claimants are also required to cooperate and assist the Justice Department in the orderly transfer, management and disposition of the relevant assets. The assets subject to the settlement agreement include the sale proceeds of high-end real estate acquired in Beverly Hills as well as a luxury condominium in New York City; the sale proceeds of an investment made by Aziz in a Kentucky maintenance company; a luxury London townhome; and a promotional poster for the 1927 motion picture film “Metropolis.”
The assets being forfeited subject to this settlement are in addition to the more than $1 billion in assets the United States previously forfeited in connection with the Department of Justice’s 1MDB investigation. Following the conclusion of today’s settlement, several civil forfeiture complaints arising out of the 1MDB criminal conspiracy remain pending against assets associated with other alleged co-conspirators.
The FBI’s International Corruption Squads in New York City and Los Angeles and the IRS-CI are investigating the case. Deputy Chief Woo S. Lee and Trial Attorneys Barbara Levy, Jonathan Baum and Joshua Sohn of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Assistant U.S. Attorneys Jonathan Galatzan and Steven R. Welk of the Central District of California are prosecuting the case. The Justice Department’s Office of International Affairs provided substantial assistance.
The department also appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in MLARS, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to firstname.lastname@example.org (link sends e-mail) or https://tips.fbi.gov/.
A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards judgment in favor of the United States.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
DOJ Press Release
Categories: Anti-Corruption Anti-Money Laundering Capital Flight Civil Forfeiture Enforcement Actions