1MDB investigation: US to seize $1bln of Malaysian PM

21 July, AtoZForex – Pressure is increasing on the Malaysian Prime Minister Najib Razak as a result of 1MDB investigation. Lawmakers are demanding him to leave the post and U.S. wants to seize $1 billion which was allegedly stolen from the state investment fund by people who were close to the premier.

1MDB investigation details

The 1Malaysia Development Berhad (1MDB) fund was created by Najib in 2009 right after he took a stance of promoting economic development projects. However, U.S. prosecutors claim that instead of investing into those projects, fund officials have diverted more than $3.5 billion through the network of shell companies and bank accounts in Switzerland, Singapore, Luxembourg and the U.S.

According to the complaint, those funds paid the luxury properties in NY and CA, a jet for $35 million, and various expensive art objects. Also, those funds allegedly helped to finance the Hollywood film “The Wolf of Wall Street”. The U.S. federal government demands the recovery and forfeiture of the stolen money.

Meanwhile, the leader of the opposition in Parliament, Wan Azizah Wan Ismail, says PM must provide a full explanation in Parliament and go on leave in order to ensure a fully transparent 1MDB investigation.

When Najib was accused of the criminal wrongdoing in January, the attorney-general cleared him stating that $681 million in PM’s bank accounts is a donation from the Saudi royal family and not taken from 1MDB. However, now the civil society Bersih is requesting both PM and attorney-general to resign in order to allow for independent probe and full 1MDB investigation.

Complex money-laundering scheme?

The U.S. complaints, which were filed in LA and started the 1MDB investigation, describes a complex money-laundering scheme. According to the Justice Department, it was intended to use the scheme to enrich the top-level government officials.

Nearly $1.3 billion was raised and transferred to Swiss account later on being distributed among the fund officials for personal benefit. The complaint charges several people close to Najib, who allegedly profited from the scheme. Among them is Riza Shahriz Abdul Aziz, Najib’s stepson and a businessman Low Taek Jho, a friend of Premier’s family.

At the news conference dedicated to the 1MDB investigation, Eileen Decker, the U.S. Attorney in Los Angeles said:

“In seeking to seize these forfeited items, the Department of Justice is sending a message that we will not allow the United States to become a playground for the corrupt. And we will not allow it to be a platform for money laundering or a place to hide and invest in stolen riches.”

Will 1MDB investigation strain the ties between countries?

The U.S. Justice Department states that the forfeiture demand is the largest action in its history. The amount of money requested to be recovered is the amount officials were able to track via the U.S. financial system. 1MDB investigation is not hot news; the fund is already under a probe in several countries including Singapore. The country said on Thursday that it seized $176 million in its possible money laundering 1MDB investigation.

Meanwhile, the U.S. federal government’s action against Malaysian PM might strain the country’s ties with Malaysia. Two countries have been allies in the fight against terrorism. However, no long-term implications are expected.

See also: HSBC Head of Forex arrested in currency rigging probe

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