Jho Low and his family have reached a deal with the DoJ which would resolve all of the US government’s civil, criminal, and administrative asset forfeiture actions relating to 1MDB.
- DoJ took a condemnatory tone towards Low who earlier sought to portray the settlement as a victory of sorts
- Low was still on trial for charges related to the 1MDB scandal in two US districts
- Settlement did not exonerate Low or absolve him of future liability
- Settlement the largest-ever recovery executed under US Kleptocracy Asset Recovery Initiative and the biggest civil forfeiture ever concluded
- Low hailed ‘historic’ deal, saying he was “very pleased” with deal that “forever resolved” the claims against him in the US district in California
The Low family comprises Taek Jho, better known as Jho Low, his father Low Hock Peng, mother Goh Gaik Ewe, sister Low May Lin and brother Low Taek Szen.
The United States Department of Justice (DoJ) said it has denied fugitive financier Low Taek Jho access to hundreds of millions allegedly embezzled from 1MDB, with the settlement of the civil forfeiture suit against him.
In a joint statement by the law enforcement agencies involved in the case against him, the DoJ took a condemnatory tone towards Low who earlier sought to portray the settlement as a victory of sorts.
It also pointed out that Low was still on trial for charges related to the 1MDB scandal in two US districts.
The DoJ also noted that the settlement of “over US$700 million” represented the largest ever recovery executed under its Kleptocracy Asset Recovery Initiative and the biggest civil forfeiture ever concluded.
“This settlement agreement forces Low and his family to relinquish hundreds of millions of dollars in ill-gotten gains that were intended to be used for the benefit of the Malaysian people, and it sends a signal that the United States will not be a safe haven for the proceeds of corruption.
“A staggering amount of money embezzled from 1MDB at the expense of the people of Malaysia was laundered through the purchase of big-ticket assets in the US and other nations,” Assistant Attorney General Brian A Benczkowski of the DoJ said in the release.
Among the assets, part of the civil forfeiture suit filed by the DoJ in 2016 and 2017, include the US$35 million Bombardier Global 5000 currently at a hangar in Singapore.
The statement also recalled allegations against Low and his accomplices, which included extravagant spending sprees, the purchase of unique artwork and luxury property, Hollywood movie productions, gambling at casinos, and other excesses.
Money taken from 1MDB was also funnelled into private-equity investments. The appreciation in the value of those stakes is likely to represent the largest chunk of the money to be recovered by the US government.
The most noteworthy of them was Low’s stake in EMI Music Publishing, which is now fully controlled by Sony Corp. His original investment of just over US$100 million grew to more than US$415 million. That stake has since been liquidated, and the proceeds are being held pending the outcome of the forfeiture lawsuits.
US Attorney Nicola T Hanna described Low as one of the men allegedly “at the centre of the scheme” and who will now be prevented from using the misappropriated funds.
Other agencies that also commented in the statement include the criminal investigation offices of the Federal Bureau of Investigation (FBI) and Inland Revenue Service (IRS).
The statement also noted that Low still faced charges related to the scandal outside of California.
“Low separately faces charges in the Eastern District of New York for conspiring to launder billions of dollars embezzled from 1MDB and for conspiring to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes to various Malaysian and Emirati officials, and in the District of Columbia for conspiring to make and conceal foreign and conduit campaign contributions during the United States presidential election in 2012.”
The DoJ stressed that today’s settlement did not exonerate Low or absolve him of future liability.
The US agency then thanked Malaysia’s Attorney General’s Chambers, the Royal Malaysia Police, and the Malaysian Anti-Corruption Commission, among others, for assisting in the case.
After the settlement was reported today, Low said he was “very pleased” with the deal.
In a statement sent via Sydney-based public relations firm Well Haslem Mayhew, Low said the landmark global deal “fully and forever resolves in their entirety each of the US government’s civil, criminal, and administrative actions or proceedings” relating to his assets at issue at the California courts.
“Importantly, the agreement does not constitute an admission of guilt, liability or any form of wrongdoing by me or the asset owners,” he said.
In 2016, then US Attorney General Loretta E Lynch spectacularly announced in a live broadcast that the DoJ was launching the kleptocracy investigation into the 1MDB scandal that reached all the way to a “Malaysian Official 1”.
A Barisan Nasional minister at the time, Datuk Seri Abdul Rahman Dahlan, confirmed “MO1” to be Datuk Seri Najib Razak, the former prime minister currently on trial here for abuse and money laundering related to the scandal.
Goldman Sachs is also seeking a settlement with the DoJ and said last month, it will help return stolen funds to Malaysia.
Goldman Sachs president and CEO John Waldron was quoted as saying that “we want the Malaysian people to be taken care of”.
Last year, Malaysia filed criminal charges against Goldman Sachs over its role as underwriter and arranger of three bond sales that raised US$6.5 billion for 1MDB.
Statement by the US Department of Justice:
US recovers US$700m in assets allegedly acquired with 1MDB funds
The Department of Justice has reached a settlement of its civil forfeiture cases against assets acquired by Low Taek Jho, aka Jho Low, and his family using funds allegedly misappropriated from 1MDB, Malaysia’s investment development fund, and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg.
These assets, located in the United States, the United Kingdom and Switzerland, are estimated to be worth more than US$700 million. With the conclusion of this settlement, together with the prior disposition of other related forfeiture cases, the United States will have recovered or assisted in the recovery of more than US$1 billion in assets associated with the 1MDB international money laundering and bribery scheme. This represents the largest recovery to date under the Department’s Kleptocracy Asset Recovery Initiative and the largest civil forfeiture ever concluded by the Justice Department.
“As alleged in the complaints, Jho Low and others, including officials in Malaysia and the United Arab Emirates, engaged in a brazen multi-year conspiracy to launder money embezzled or otherwise misappropriated from 1MDB, and he used those funds, among other things, to engage in extravagant spending sprees, acquiring one-of-kind artwork and luxury real estate, gambling freely at casinos, and propping up his lavish lifestyle,” said A Benczkowski of the Justice Department’s Criminal Division.
“This settlement agreement forces Low and his family to relinquish hundreds of millions of dollars in ill-gotten gains that were intended to be used for the benefit of the Malaysian people, and it sends a signal that the United States will not be a safe haven for the proceeds of corruption.”
“A staggering amount of money embezzled from 1MDB at the expense of the people of Malaysia was laundered through the purchase of big-ticket assets in the US and other nations. Thanks to this settlement, one of the men allegedly at the centre of this massive scheme will lose all access to hundreds of millions of dollars,” said US Attorney Nicola T Hanna of the Central District of California.
“The message in this case is simple: the United States is not a safe haven for pilfered funds. Our strict anti-money laundering controls are effective, and we will seize assets used by criminals to conceal ill-gotten gains.”
“Today’s settlement with Jho Low demonstrates the continued commitment of the FBI to root out the fraud and selfishness of the corrupt individuals who conspired to pay bribes and launder funds which belong to the Malaysian people,” said FBI Assistant Director Terry Wade of the Criminal Investigative Division.
“The FBI’s dedicated International Corruption Squads will continue to combat foreign corruption which reaches our shores. We will not allow criminals, foreign or domestic, to use the United States in furtherance of their criminal activities.”
“The action announced today will allow the United States government to deny Low the use of the assets purchased with this extraordinarily large sum of money he allegedly misappropriated from 1MDB and the people of Malaysia,” said chief Don Fort of IRS Criminal Investigations (IRS-CI).
“Low allegedly attempted to launder these funds through multiple international jurisdictions and a web of shell corporations, but his greed finally caught up with him. This case is a model for international cooperation in significant cross-border money laundering investigations”
According to the civil forfeiture complaints, from 2009 through 2015, more than US$4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates, including Low, through a criminal conspiracy involving international money laundering and bribery.
1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.
Under the terms of the settlement, Low, his family members, and FFP, a Cayman Islands entity serving as the trustees overseeing the assets at issue in these forfeiture actions, agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest.
The trustees are also required to cooperate and assist the Justice Department in the orderly transfer, management and disposition of the relevant assets. From the assets formerly managed by FFP, the United States will release US$15 million to Low’s counsel to pay for legal fees and costs.
Under the agreement, none of those fees may be returned to Low or his family members. The assets subject to the settlement agreement include high-end real estate in Beverly Hills, New York and London; a luxury boutique hotel in Beverly Hills; and tens of millions of dollars in business investments that Low allegedly made with funds traceable to misappropriated 1MDB monies.
Low separately faces charges in the Eastern District of New York for conspiring to launder billions of dollars embezzled from 1MDB and for conspiring to violate the Foreign Corrupt Practices Act by paying bribes to various Malaysian and Emirati officials, and in the District of Columbia for conspiring to make and conceal foreign and conduit campaign contributions during the United States presidential election in 2012.
The charges in the indictments are merely allegations, and defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. This agreement does not release any entity or individual from filed or potential criminal charges.
The assets being forfeited subject to this settlement are in addition to the nearly US$140 million in assets the US previously forfeited in connection with Low’s investment in a business entity related to the Park Lane Hotel in New York, as well as a super-yacht, valued at over US$120 million, seized by law enforcement authorities in Indonesia at the request of the Justice Department and recovered by Malaysian authorities directly from Indonesia.
Following conclusion of today’s settlement, several civil forfeiture complaints arising out of the 1MDB criminal conspiracy remain pending against assets associated with other alleged co-conspirators.
The FBI’s International Corruption Squads in New York City and Los Angeles and the IRS-CI are investigating the case. Deputy Chief Woo S Lee and trial attorneys Kyle R Freeny, Joshua L Sohn, Barbara Levy and Jonathan Baum of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant US Attorneys John Kucera, Michael R Sew Hoy and Steven R Welk of the Central District of California are prosecuting the case. The Criminal Division’s Office of International Affairs is providing substantial assistance.
The Department also appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with US Attorney’s Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.
In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the US should contact federal law enforcement or send an email to kleptocracy@usdoj.gov or https://tips.fbi.gov/.
A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards judgment in favour of the United States.