PROSECUTORS in the US are planning to file criminal charges against a high-flying Malaysian businessman allegedly linked to the Southeast Asian country’s massive sovereign state fund scandal.
A report in the Wall Street Journal on Wednesday said the plans involved filing criminal charges of wire fraud and money laundering against Low Taek Jho – also known as Jho Low – and potentially some of his associates, over the multi-billion dollar 1Malaysia Development Berhad (1MDB) case.
The move comes amid an international investigation into what is believed to be one of the largest cases of financial fraud in history.
A civil asset-seizure lawsuit filed by the US Department of Justice (DOJ) in July is seeking US$1 billion worth of assets allegedly siphoned off from 1MDB and channelled into luxury real estate in New York, Beverly Hills and London, valuable van Gogh and Monet paintings as well as a private jet.
Sources said the prosecutors had not confirmed when the charges might be laid. For an indictment, prosecutors are required to present the grand jury with evidence which shows it has reason to believe US law has been broken.
The 1MDB sovereign fund was created in 2009 by Malaysia’s Prime Minister Najib Razak to promote economic development projects.
It is currently the subject of numerous multi-agency probes across the world, including in Singapore, Hong Kong, Australia and Switzerland, as well as a civil lawsuit filed by the DOJ which claims fund officials have diverted more than US$3.5 billion through a web of shell companies and bank accounts abroad.
Despite the allegations, Najib, who chaired the fund until recently, has vehemently denied any wrongdoing in the handling of 1MDB. The DOJ found several hundreds of millions of dollars deposited into the personal bank accounts of a certain “Malaysian Official 1”, who US and Malaysian officials have identified as Najib.
The WSJ report said any charges could increase pressure on Najib, who has close ties with Low. Citing Malaysian documents and US officials close to the investigation, the paper said Najib has received more than US$1 billion into his personal bank accounts.
One large deposit into Najib’s account in excess of US$800 million was reportedly sourced from 1MDB via a network of offshore funds and accounts controlled by Low and his associates.
Following the DOJ’s asset-seizure suits, which did not name people as defendants but was made against the assets themselves, the elusive Low has taken a step back out of the limelight. In the past, he had been spotted with Hollywood celebrities and was known for throwing lavish parties in Las Vegas.
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In addition to Low, the Department of Justice has also named Riza Aziz in its lawsuits. Riza is Najib’s stepson and founder of Red Granite Pictures, which produced the 2013 Hollywood blockbuster The Wolf of Wall Street.
Those familiar with Low’s whereabouts also said with his bank accounts frozen by several countries, he had been residing mainly in China and Thailand since Malaysian authorities had warned him to stay away.
Low has reportedly deleted some email accounts, changed phones regularly, and has avoided entering the United States. A staff member at the Peninsula Hotel in Shanghai last year described Low as a long-term resident, while his luxury yacht, The Equanimity, is docked in Thailand.
The WSJ also quoted people close to Low who said the 1MDB financier had drawn inspiration from the book entitled The King of Oil: The Secret Lives of Marc Rich, depicting the life of a late businessman who avoided prison in the US despite tax evasion and other charges.
But unlike Rich who lived without arrest for decades in Switzerland and was pardoned by then-president Bill Clinton in 2001, Switzerland is among countries investigating 1MDB. Low’s bank accounts have also been frozen in Switzerland, the WSJ report said.
Last December, Low’s relatives took fresh court action seeking to prevent the US government from seizing their assets. They filed cases in New Zealand and the Cayman Islands to have real estate and other assets transferred to a new trustee, according to a motion passed in the federal court in Los Angeles.
The motion seeks to push back a hearing, giving the relatives time to take their case to courts outside of the US, which the government had argued were the proper venues for their requests.