It’s a scandal that originated in Malaysia, but the investigation has spread to at least
10 other countries around the world.
It allegedly involves celebrities,
Las Vegas gambling,
lots of diamond jewelry,
rare artwork,
and even The Wolf of Wall Street movie.
I’m talking about 1MDB – Malaysia's sovereign wealth fund,
the center of one of the world’s biggest cases of white collar crime.
In September 2009, Malaysia’s new Prime Minister Najib Razak, set up 1MDB.
The fund’s purpose was to borrow money to grow investment
and stimulate Malaysia’s economy.
Unlike most sovereign wealth funds, Malaysia didn’t start with a huge pile of cash.
It had to raise money through things like bond sales and joint ventures
and it was through three of these business deals that the scandal unfolded.
Unfortunately, sadly, tragically, a number of corrupt 1MDB officials treated this
public trust as a personal bank account.
Investigators say at least $4.5 billion was misappropriated from 1MDB
when money landed in various Swiss and Singaporean bank accounts
tied back to a few central characters.
I know, I know. It’s complicated.
So complex that one Malaysian non-profit designed this board game
to help people come to grips with how the money was spent.
Many of the assets you see here, are actual assets listed in that report.
They even made figurines of the key characters named in the Department of Justice report.
So, who are they?
Malaysian Official One is mentioned more than 30 times in the Department of Justice report,
but never referred to by name.
The official is widely believed to be Malaysian Prime Minister Najib Razak,
but Mr Najib has denied any wrongdoing.
The 1MDB case began to make international headlines in July 2015
after the Wall Street Journal reported it had seen a paper trail
tracing $680 million from 1MDB into Mr Najib’s personal bank accounts.
Malaysia’s attorney general cleared Mr Najib of wrongdoing, saying the $680 million was
a legal donation from Saudi Arabia and most of it was returned.
But the Department of Justice says nearly $30 million in 1MDB funds was used to buy
jewelry for Malaysian Official One’s wife, including a rare 22-carat pink diamond
set in a necklace, which cost $27.3 million alone.
In the face of intense criticism, Mr Najib removed his critics,
including his deputy prime minister.
He also replaced the attorney general, who had been investigating 1MDB.
Another key player in the 1MDB saga is Jho Low,
who is named in the Department of Justice report.
His whereabouts are currently unknown.
Low, whose real name is Low Taek Jho, has no formal position within 1MDB.
I found politics to be very interesting.
But he’s known to be a longtime friend of the
Malaysian prime minister’s stepson, Riza Aziz.
U.S. investigations have pinpointed
Mr Low as having a significant role
in the fund’s creation and brokering
1MDB’s major business deals,
which may be why he’s alleged
to have gotten a lion’s share of 1MDB funds.
He made headlines in the U.S. for his big spending,
and was frequently photographed with celebrities like Paris Hilton.
It appears that Mr Low went on a major shopping spree between 2009 and 2014.
More than $250 million in proceeds from the first 1MDB bond offering were used to purchase
a 300-foot luxury mega yacht called The Equanimity.
Mr Low bought lots of real estate in New York City and Beverly Hills, including a penthouse
which was once home to Jay Z and Beyonce for $30.6 million.
Then, there were the casinos.
The Department of Justice says more than $25 million
was wired to Caesar's Palace and the Venetian in Las Vegas,
where several individuals gambled on his account.
He also purchased about $200 million worth of jewelry
using funds traced to 1MDB and a Deutsche Bank loan.
About $8 million of that jewelry went to Australian model Miranda Kerr.
He also spent more than $100 million on art,
including a $3.2 million piece by Pablo Picasso,
which he gave actor Leonardo DiCaprio for his birthday.
Both Leonardo DiCaprio and Miranda Kerr have returned their gifts to the Department of Justice.
Riza Aziz, stepson of the Malaysian Prime Minister, had more than $200 million funneled
to his personal bank account, according to prosecutors.
With that money, Mr Aziz purchased things like
an original Wizard of Oz movie poster from 1939, for a cool $75,000,
and nearly $100 million worth of real estate in the U.K. and U.S.
But a significant portion of the money was sent to Red Granite Pictures,
a Hollywood company run by Mr Aziz.
Red Granite financed films like Dumb and Dumber To,
Daddy’s Home and of course,
the Oscar-nominated Wolf of Wall Street.
Aziz and Low even got a shoutout in Leonardo DiCaprio’s Golden Globe speech in 2014.
Joey, Riz and Jho, thank you for being not only collaborators but
taking a risk on this movie.
Red Granite recently came to an undisclosed settlement with the U.S. government.
The Department of Justice is trying to seize all of these assets and more,
worth $540 million in total.
This is because it says misappropriated funds were used to purchase them.
In response to U.S actions, the Malaysian government said that
the Department of Justice never sought its cooperation.
In October, Malaysia’s Attorney General asked Malaysian police
to re-open the investigation into 1MDB.
Malaysia’s general elections will likely be held this year,
and it's clear that the 1MDB debacle is the elephant in the room.
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