Risk register · entry
Q-F · Fraud1MDB scandal
A sovereign fund to develop Malaysia. $4.5B left, some to bankroll a film about financial fraud.
The fifth quadrant, where the thing was never real. The tell is that the story is too clean.
Why this quadrant
A sovereign development fund whose bond proceeds went through shell companies and correspondent accounts into private spending, from inception rather than as a later drift. The sovereign sponsorship, the blue-chip underwriting and the audited issuance were what stopped anyone looking. The Department of Justice puts the misappropriation at more than 4.5 billion dollars.
The record
- The US Department of Justice states that from 2009 through 2015 more than $4.5 billion belonging to 1MDB was misappropriated by high-level 1MDB officials, their associates and Low Taek Jho (Jho Low).certain
- DOJ's first civil forfeiture complaints, filed 20 July 2016, alleged more than $3.5 billion misappropriated and sought recovery of more than $1 billion in assets, the largest single action ever brought under the Kleptocracy Asset Recovery Initiative; the $4.5 billion figure came with later complaints.certain
- DOJ's forfeiture effort produced seizures of over $1.7 billion in stolen assets across 41 civil forfeiture actions in the Central District of California and one in the District of Columbia, with approximately $1.4 billion repatriated to Malaysia.certain
- Goldman Sachs, which underwrote approximately $6.5 billion of 1MDB bonds, agreed in October 2020 to pay more than $2.9 billion in coordinated resolutions, including over $1 billion to the SEC ($606.3 million disgorgement plus a $400 million civil penalty).certain
- Red Granite Pictures, the producer of The Wolf of Wall Street and co-founded by Najib Razak's stepson Riza Aziz, agreed in March 2018 to pay the US government $60 million to settle the civil forfeiture claims, without admitting wrongdoing.certain
Sources
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