US returns additional RM1.9b of 1MDB funds

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The US Justice Department (DoJ) said today it has repatriated an additional US$452 million (RM1.9 billion) in misappropriated 1Malaysia Development Berhad (1MDB) funds to the Malaysian government.

This brings the total returned to over US$1.2 billion (RM4.9 billion).

A landmark 41 civil forfeiture actions filed in the US District Court for the Central District of California and one in the US District Court for the District of Columbia by the Money Laundering and Asset Recovery Section (MLARS) beginning 2016 have led to the seizure of over US$1.7 billion in stolen assets.

The DoJ said it is the largest recovery to date under the Department’s Kleptocracy Asset Recovery Initiative. The funds include both funds finally forfeited and funds the Department assisted in recovering and returning.

In May, the DoJ remitted up to RM1.9 billion of seized funds related to the state investment firm.

The funds were directly channelled to Malaysia’s Assets Recovery Trust Account managed by the Accountant General’s Department.

At that point, the Trust account had received RM16.05 billion of seized and repatriated 1MDB funds.

Minister of Finance Datuk Seri Tengku Zafrul Abdul Aziz said the balance in the Trust account will be used to repay and service 1MDB and its former subsidiary SRC International Sdn Bhd’s remaining debts.

Funds from 1MDB were believed to have been laundered through major financial institutions worldwide, including in the United States, Switzerland, Singapore, and Luxembourg.

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, and Low Taek Jho (aka Jho Low), through a criminal scheme involving international money laundering and embezzlement.

Some of the embezzlement proceeds were also allegedly used to pay bribes.

Low is known to be a close associate of former prime minister Datuk Seri Mohd Najib Razak and his family.

Najib was convicted of seven charges relating to criminal breach of trust, abuse of power and money-laundering over RM42 million in funds misappropriated from SRC International Sdn Bhd, a 1MDB subsidiary. He has since appealed this conviction, with the Court of Appeal having heard this appeal but yet to deliver its decision.

His trial for four charges of abuse of power under an anti-corruption law and 21 charges of money-laundering relating to the 1MDB scandal is still ongoing. – MMO