U.S. Maps 1MDB Fraud Trail From Kuala Lumpur to Hollywood

More than $3.5 billion traveled a trail of fraud from Malaysia through a web of shell companies, with some fueling a spending binge on Monet paintings and luxury real estate and at least $700 million flowing back into accounts controlled by Malaysia’s prime minister.

Some of the money was handled by international banks including Goldman Sachs Group Inc., JPMorgan Chase & Co., Standard Chartered Plc and Deutsche Bank AG. A chunk of it funded a Hollywood blockbuster, “The Wolf of Wall Street.” More than $13 million of it was wired to an account at a Las Vegas casino by a stepson of Malaysia’s prime minister who gambled with an unidentified actor whose description matches that of Leonardo DiCaprio.

 It’s all laid out in a dozen filings Wednesday by U.S. prosecutors who detailed an alleged scheme of international money laundering and misappropriation stretching from 2009 to 2015. The Justice Department is seeking to seize more than $1 billion worth of assets it says went through U.S. banks from Malaysian development fund 1Malaysia Development Berhad, known as 1MDB, and was ultimately used to illegally acquire assets.

The U.S. complaints lays the groundwork for tension with Malaysia, a longtime ally on issues including counterterrorism and trade. Prosecutors refer to a top Malaysian official who controlled accounts that received hundreds of millions of dollars. The official isn’t accused of wrongdoing.

The anonymous description lines up with that of Prime Minister Najib Razak, who until a few months ago served as the chairman of 1MDB’s advisory board.

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Mahathir Mohamad on corruption and 'saving Malaysia'

We challenge Malaysia's former prime minister, and also debate Ethiopia's treatment of the Oromo people.

In this week's UpFront, we speak to Mahathir Mohamad, Malaysia's former leader, about his call for Prime Minister Najib Razak to resign.

In the Reality Check, Mehdi Hasan examines why drone strikes are ineffective. And in the Arena, we debate Ethiopia's treatment of the Oromo people with the Ethiopian communications minister and an Oromo Democratic Front (ODF) executive committee member.

Malaysia's former prime minister, Mahathir Mohamad, wants to "save Malaysia" and oust the country's current PM Najib Razak over claims that he mismanaged the economy, suppressed free speech and allegedly took hundreds of millions of dollars in bribes, all accusations the PM denies.

The "Save Malaysia" movement, led by Mahathir and made up of opposition leaders from across the political spectrum, is centred on a multimillion-dollar corruption scandal that alleges nearly $700m found in Najib's personal bank accounts came from the state-funded 1Malaysia development fund. Najib, however, says the money was a campaign donation from Saudi Arabia and has since been returned.

Mahathir, who served as the country's prime minister for 22 years, says that Najib must "go" and that his "leadership undermines" Malaysia's institutions. In this week's Headliner, Mehdi Hasan challenges Mahathir on his campaign to oust the current prime minister.

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Swiss widen corruption investigation into Malaysia's 1MDB fund

Switzerland has widened its corruption probe into a Malaysian state-owned fund linked to prime minister Najib Razak, with two new suspects indicted over an alleged phony bond deal.
The Swiss attorney general’s office (OAG) said the new suspects – who are accused of fraud, bribery and other offences – are officials from the United Arab Emirates who were in charge of sovereign funds based in Abu Dhabi.

In a statement, the OAG said it had evidence that the management of the 1MDB fund violated Swiss embezzlement laws through a fraudulent bond agreement with the UAE officials, with money routed through Swiss banks.

Allegations that billions were looted from 1MDB in a vast campaign of fraud have shaken Najib’s government.

The scandal intensified last week when a Malaysian parliamentary committee clearly suggested misconduct had occurred, in the first condemnation from an official body in Kuala Lumpur.

Switzerland opened its own criminal probe into 1MDB last August, targeting two former Malaysian officials “and persons unknown” on suspicion of bribery, money laundering and other offences.
The OAG has said that up to $4bn of public funds in Malaysia may have been misappropriated, with a portion of the money transferred to Swiss accounts controlled by former Malaysian officials and people based in the UAE.

Concerning the latest allegations, Swiss authorities are scrutinising bonds issued by 1MDB subsidiaries officially intended to finance electric power plant projects in Malaysia.

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How Malaysia's 1MDB Fund Scandal Reaches Around the World

State investment company 1Malaysia Development Bhd., or 1MDB, has been making headlines in Malaysia and around the world in the past year, mainly for the wrong reasons. There are probes reported in at least ten countries related to 1MDB, or on companies and individuals linked to it.

Investigations surrounding 1MDB center on alleged financial irregularities and possible money laundering. Both 1MDB and Prime Minister Najib Razak have consistently denied wrongdoing, and the fund continues to state that no foreign legal authorities have contacted them on any of these investigations. Here's a snapshot of the various probes.

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Malaysia: directors of scandal-hit 1MDB state investment fund offer mass resignation

Parliamentary inquiry finds extensive mismanagement but does not mention PM Najib Razak, who was behind creation of debt-laden fund.

The heavily indebted Malaysian state investment fund 1MDB has said its entire board of directors has offered to resign, after a parliamentary inquiry found extensive mismanagement and called for a police investigation into the fund’s former head.

In a report submitted in parliament on Thursday, the public accounts committee said it found 1MDB’s financial performance “unsatisfactory”. The fund’s debts ballooned from 5bn ringgit (£906m) in 2009 to 50bn ringgit this January.

It said 1MDB’s business model depended heavily on debt, mainly bank loans and bonds, part of which are guaranteed by the government. Such heavy reliance on debts for working capital should never have been allowed, the report said.

The report did not mention the prime minister, Najib Razak, who was behind the creation of 1MBD in 2009 and has been battling allegations that hundreds of millions of dollars was channeled from the fund into his personal bank accounts.

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