Singapore adds to US pressure on Malaysian fund 1MDB

By AFP/Elizabeth Law   July 21, 2016 | 01:52 am PT
Singapore had seized nearly $180 million, raising the pressure a day after Washington moved to grab more than $1 billion in assets over "enormous" fraud.

The back-to-back announcements are the clearest and most damning steps yet taken in more than a year of Malaysian tumult over 1MDB, which was founded and overseen by Prime Minister Najib Razak.

The U.S. Justice Department filed lawsuits Wednesday to seize assets including luxury real estate in Beverly Hills, New York and London, artworks by Monet and Van Gogh, and a Bombardier business jet, saying they were purchased with money stolen from 1MDB.

The U.S. filings made thinly-veiled references to Najib as a beneficiary in the alleged theft of a total of more than $3.5 billion by his stepson, a family friend and various other figures.

"The Department of Justice will not allow the American financial system to be used as a conduit for corruption," U.S. Attorney General Loretta Lynch said in announcing the move.

Singapore followed up by revealing it had seized Sg$240 million ($177 million) worth of bank funds and other assets over suspected fraud and money-laundering related to 1MDB.

The joint statement by Singapore's central bank, police and attorney-general marked the first time authorities in the city-state revealed detailed findings since launching investigations last year.

It added that half those assets were linked to Low Taek Jho, a Malaysian businessman close to Najib's family.

"Fraud on an enormous scale"

The U.S. Justice Department filing accused Low of laundering hundreds of millions of dollars in diverted 1MDB money to fund U.S. luxury purchases.

The targeted U.S. assets also include royalties from the 2013 financial crime caper "The Wolf of Wall Street" starring Leonardo DiCaprio.

The film was produced by a company owned by Najib's stepson Riza Aziz using more than $100 million syphoned from 1MDB, the Justice Department said.

Both Najib and 1MDB have consistently dismissed allegations of wrongdoing as false political attacks by his opponents.

The U.S. seizure would be the largest yet under Washington's 2010 Kleptocracy Asset Recovery Initiative targeting ill-gotten gains parked in U.S. assets by foreign leaders.

"The Malaysian people were defrauded on an enormous scale," said FBI Deputy Director Andrew McCabe.

1MDB, or 1Malaysia Development Berhad, was launched by Najib in 2009 to invest in economic development projects. He closely controlled it in his concurrent role as finance minister.

Najib has moved to suppress information, neuter Malaysian investigations, and oust officials questioning 1MDB's activities.

His spokesman stressed Thursday that Malaysian authorities had previously found no wrongdoing, while pledging to cooperate with any international inquiries.

"As the Prime Minister has always maintained, if any wrongdoing is proven, the law will be enforced without exception," the spokesman said.

"Malaysian Official 1"

Najib is not named directly in the U.S. filings.

But they refer to "Malaysian Official 1," described as a "high-ranking official" with control over 1MDB and who was the "ultimate beneficiary" of a Malaysian bank account full of allegedly misappropriated funds.

The filings are widely believed to refer to Najib, who has admitted receiving at least $681 million in mysterious deposits to his personal accounts in 2013. He calls them "personal donations" from the Saudi royal family.

Malaysia's hyperactive social media users on Thursday hammered Najib as a thief and a liar, and #MalaysianOfficial1 became the country's top-trending Twitter hashtag.

"The Wolf of Malaysia, cheating the people out of their money. Wait for the karma!" said a posting on Najib's Facebook page.

Najib faced new calls to step aside.

"I believe the Malaysian people want Najib to go on leave as prime minister so as not to create the perception of abuse of power... or to hinder a full and transparent investigation on this very serious issue," opposition leader Wan Azizah Wan Ismail said.

Switzerland also has frozen millions in assets and several other countries are investigating.

The production company controlled by Najib's stepson said it was unaware of any funding shenanigans.

A 1MDB statement stressed that the company was not a party to the U.S. suit while offering no comment on the alleged embezzlement of its funds.

Related news:

Malaysia's 1MDB plans ''robust response'' in debt row

Singapore orders BSI bank unit shut as 1MDB probe widens

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