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Saturday, November 2, 2019

Is Jho Low reaches settlement with US authorities over 1MDB probe ?


Is Jho Low reaches settlement with US authorities over 1MDB probe ?


The U.S. Justice Department has struck a deal with fugitive financier Jho Low in which it will recoup almost $1 billion of money looted from the Malaysian investment fund 1MDB, in what would be the biggest recovery from an American anti-corruption crackdown.
The 1MDB global corruption scandal toppled the previous Malaysian government of Najib Razak, ensnared a Wall Street powerhouse and set off investigations across the globe. The proposed settlement was filed Wednesday in a California court.
It would be the most significant win for the Justice Department’s Kleptocracy Asset Recovery Initiative since it was set up almost a decade ago to prevent the U.S. from becoming a safe haven for stolen money.
The deal, if approved by a federal judge, will help resolve forfeiture cases tied to Low, whom prosecutors accuse of orchestrating the theft of more than $4 billion from 1MDB. The money was used to pay for a private jet, a super-yacht, mansions, diamonds and even Hollywood movie productions, the U.S. has laid out. The agreement doesn’t include an admission of guilt or wrongdoing but also doesn’t release Low from other criminal charges. Even now, his whereabouts remain a mystery.
“We were pleased to help negotiate this historic resolution in order to preserve the tremendous value of assets involved,” Chris Christie, the former governor of New Jersey said in a statement. His law firm represents Low. “It is one of the largest civil forfeiture settlements in U.S. history and represents a voluntary return of each and every asset claimed by DOJ.”

Luxury Properties

The assets involved in settlements of 13 forfeiture cases are estimated to be worth more than $700 million and include a luxury boutique hotel in Beverly Hills, California, and high-end real estate in New York and London, the Justice Department said. That’s in addition to $260 million of assets seized earlier, including a super-yacht, the department said. The value of the recouped assets could be even higher based on estimates in the original lawsuits and the final sale price.
Wednesday’s announcement by the Justice Department didn’t specify what would happen with the assets or, if they’re sold, with any proceeds. On Thursday, Malaysia Prime Minister Mahathir Mohamad told reporters the government will submit a claim to the U.S. and that it can prove the assets were bought with the country’s money.
Earlier this year, the U.S. returned $200 million to Malaysia recovered as part of the 1MDB litigation. That included about $140 million from the sale of a stake in New York’s Park Lane Hotel and $60 million from a settlement paid by the producer of the “Wolf of Wall Street” movie.
Malaysian police have said Low is hiding in a country that has an extradition agreement with their own. The authorities, who issued an arrest warrant more than a year ago, said they aim to bring him back by year end. They have since said it’s unlikely he was in the U.S.
“The message in this case is simple: the United States is not a safe haven for pilfered funds,” U.S. Attorney Nick Hanna in Los Angeles said in a statement. “Our strict anti-money laundering controls are effective, and we will seize assets used by criminals to conceal ill-gotten gains.”
The flurry of forfeiture complaints filed initially by the Justice Department in 2016 connected big purchases in the U.S. to the proceeds of a crime. But even after assets are seized, the proceeds from them can end up in legal limbo until a court awards judgment in favor of the U.S. or, as in this case, reaches a settlement. The two sides negotiated a deal to avoid the legal costs and uncertainty of extended litigation.
The case laid out the ways in which money meant for economic development in Malaysia found its way past bank watchdogs and ended up allegedly paying for the lavish lifestyle of Low and his associates.

The ensuing scandal rattled Malaysia and swept Mahathir to power on a pledge to recover the lost funds and bring those responsible to justice. Former leader Najib is facing trials investigating his involvement and whether he knowingly received kickbacks from 1MDB dealings. He has denied any wrongdoing. On Nov. 11, a judge is set to decide whether to have his lawyers call their witnesses or strike charges in one case.

Goldman’s Role

Much of the money was raised by Goldman Sachs Group Inc. The 1MDB episode has turned into a major reputational problem for the New York-based bank, which has been in conversations with the U.S. and Malaysian governments over a monetary settlement for its involvement in the scandal. A former senior executive at the firm pleaded guilty to his role.
Several properties involved in the settlement have been sold, and proceeds are being held for restitution payments.
“I am very pleased” that a global settlement has been reached, Low said in a statement distributed by his representatives. The “agreement builds on a series of successful prior agreements negotiated with the U.S. Department of Justice and is a result of good faith discussions,” he said.
Money taken from 1MDB also was allegedly funneled 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 U.S. government.
The most noteworthy of them was Jho Low’s stake in EMI Music Publishing, which is now fully controlled by Sony Corp. His original investment of just over $100 million grew to more than $415 million. That stake has since been liquidated, and the proceeds are being held pending the outcome of the forfeiture lawsuits.

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