The quick annals of purported crime (in the eyes of DoJ)

Last night, in the midst of heatedness and red neck chest thumping politics in Cleveland, Ohio, Department of Justice (DoJ) issued a very insinuating media conference in Washington D.C.

Only a fraction of the hour long media conference, like the ones previously issued by Office of the Auditor General Suisse, rambles about investigations against unclear personalities vaguely related to the MOF Inc. strategic investment corporation 1MDB.

There are some interesting FAQs listed Lim Sian See to this entire episode, taken in totality. Especially purported the two Malaysian entrepreneurs, living and making their living in the United States.

The USA Govt’s Department of Justice (DOJ) have filed civil cases to seize the assets they believe is linked to 1MDB, from three individuals under the USA’s Kleptocracy Asset Recovery Initiative.

Q1. Who are the three individuals?

They are Riza Aziz, stepson of Prime Minister Najib Razak; Jho Low, a Malaysian financier; and Khadem Al Qubaisi, the former managing director of Abu Dhabi’s sovereign-wealth fund IPIC and the former Chairman of Aabar Investments PJS responsible for dealing with 1MDB at that time.
Q2. What is the USA’s Kleptocracy Asset Recovery Initiative?

It is an initiative started in the year 2010 by the USA Govt under the US Department of Justice (DOJ) with the aim to seize and recover assets within the USA which the DOJ suspects is linked to corruption from a foreign country and return them to the originating country.
Q3. Why is the DOJ investigating this case?
In March 2015, the DOJ received a complaint from Sarawak Report. Further complaints appears to also have been made by Tun Mahathir loyalist, Khairuddin Abu Hassan.
Q4. What is the DOJ actually filing against the 3 individuals and what will happen next?
The DOJ is filing civil cases against the 3 individuals to ask the courts to seize their assets. The courts will then check if the identified assets are being claimed by anyone else. If no one else is claiming these assets then the courts will ask the DOJ to prove that these assets have indeed been stolen or received illegally.
Q5. Is Prime Minister Najib Razak also charged?
No. He is not charged and not named in this case despite Tun Mahathir previously saying in September 2015 that Najib is afraid to go overseas as he will be caught by the FBI. This is untrue as not only is this a civil case but Najib is not even named in the suits.
Q6. Will anyone go to jail if the assets are seized?
No. These is a civil suit and not a criminal case. If the courts find in favour of the DOJ, only the assets are seized. There is no jail terms or criminal conviction.
Q7.  If the court allows the assets to be seized, what happens to the seized assets?
The assets are eventually returned back to the whomever the DOJ believes it is stolen from – in this case, 1MDB.
Q8. Are the assets purchased with money stolen from 1MDB?
1MDB has consistently maintained that no money was stolen and can account for where its money has gone to. However, 1MDB is currently in dispute with IPIC where 1MDB maintains that it has paid or deposited or guaranteed up to USD6 billion by a company called Aabar Investments PJS BVI upon the instructions of Aabar’s the then Chairman, Khadem Al Qubaisi and the then Managing Director.

IPIC disputes that it owns Aabar Investments PJS Ltd (BVI) and thus denies it has received these funds from 1MDB.

This dispute is now in arbitration at the London Arbitration Center and will take many months. However, 1MDB is confident that they will win this case and stand a good chance to recover their money – which is why 1MDB had earlier refused to pay the interest on a USD3.5 billion bonds despite comfortably able to, which triggered the bond guarantee by IPIC thus leading to the arbitration process.
Q9. If the money is not stolen then why is the USA DOJ acting on the complaint?
It is possible that some of the money that was paid by 1MDB into the Aabar Investments PJS Ltd (BVI) controlled by Khadem – which IPIC denies is owned by them, may have been used to fund various investments in the USA including real estate, investment in films, artwork and companies.
Q10. How much worth in asset is impacted by the USA DOJ?

No specific amounts have been confirmed yet but reports by NYT and WSJ is quoting up to USD 1 billion.
Q11.  Why is the PM’s step-son Riza Aziz involved.

WSJ had previously reported that investigators believe that Red Granite, Riza Aziz’s film company received USD$155 million in loans from the Aabar Investments PJS Ltd (BVI) much of which went to finance the 2013 movie “The Wolf of Wall Street. and to purchase properties.

WSJ said documents show three transfers to Red Granite Capital in 2012 – US$60 million, US$45 million, and US$50 million.

Of this, US$105 million was booked by Red Granite Capital as a loan, while the other US$50 million was moved to the company through intermediaries.

“Among the intermediaries, according to people familiar with investigations and the person familiar with 1MDB: Telina Holdings Inc, a company that had been set up in the British Virgin Islands by Mr Al-Husseiny and his boss, Khadem Al Qubaisi.”

According to WSJ , the US$50 million loan from Telina Holdings has been repaid, citing people familiar to the investigations.

A Red Granite spokesperson told WSJ that the company “has been repaying and will continue to repay all its loans. “Red Granite had no reason to believe at the time that the source of Aabar’s funds was in any way irregular and still believes the loan to be legitimate,”

“What Red Granite have done and will continue to do is develop and produce successful and acclaimed movies that have generated more than US$825 million in worldwide box-office revenues.”

 

Q12.  So, if it was a loan or investment into Red Granite and is already part repaid or being repaid from a successful film company, why is Riza Aziz still the target of a civil suit?
In the USA, if you make profits based on funding which the DOJ suspects was from an illegal source then this is called “profiteering” and hence your profits are also considered illegal and can be seized – essentially making money out of illegal funding. This is different from stealing money.

The DOJ will then have to prove that Red Granite is aware that the funding or loan that they received is deemed illegal.

 

Q13. What about Jho Low’s investments?
Not much has been revealed what assets or the amounts of investments are owned by Jho Low, who is a fund manager, in the USA but Jho Low had confirmed before that he has real estate holdings in the USA and may have co-invested in some US-based companies.

 

Q14. How long will this civil cases take before a judgement is reached?
Similar cases have taken years as both sides present their arguments to the US courts for the judge to make a final decision.

 

Q15. Is there anything unusual about this case?
Yes. Typically, the supposed victim of any stolen money has to make a complain to the USA DOJ to request the DOJ to seize any assets they deem was purchased using the stolen money. In this case, 1MDB has consistently maintained that there is no money stolen and they can account for all their investments or transfers but the DOJ seems to be still going ahead with filing civil suits to recover stolen money even though the “victim” said no money has been stolen.

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The mitigating and salient points in the case, are pertaining to individual entrepreneurs in the commercial dealings.

It is about a civil suit commercial in nature by DoJ and how it is related to 1MDB is very unclear.

It is not a criminal case though the AG did mention about “Corrupted 1MDB officials”.

Yet, DoJ felt it was necessary to invoke the Kleptocracy Asset Recovery Initiative to seize the assets, with the excuse of assets and funds embezzled by public officials anodised for personal gains. There on, only  the investigation is completed.

1MDB already pronounced that no foreign authorities which include the FBI and DoJ are in touch with the strategic investment corporation. Neither do they have any assets in the United States.

In the final analysis, where is the beef with this FBI/DoJ investigation?

*Updated 1700hrs

Malaysian Attorney General Tan Sri Apandi Ali’s strong statement on the latest development brought forth on DoJ’s statement last night.

PRESS RELEASE

US DEPARTMENT OF JUSTICE FILING OF CIVIL ACTION

 

The Attorney General notes that a civil action in rem has been filed by the United States Department of Justice (US DOJ) for the forfeiture of relevant assets and that it is presently a matter within the civil court in the United States.
The Attorney General further notes that the basis of the civil action in rem to forfeit assets undertaken by the US DOJ relates to the alleged laundering of money misappropriated from 1MDB. However, the Attorney General emphasized that to date –

(i) there has been no evidence from any investigation conducted by any law enforcement agencies in various jurisdictions which shows that money has been misappropriated from 1MDB; and
(ii) there have been no criminal charges preferred against any individuals for the offence of misappropriation of funds from 1MDB.
The Attorney General also expressed his strong concerns at the insinuations and allegations that have been made against the Prime Minister of alleged criminal wrong doing in relation to the civil action in rem filed by the US DOJ.

The Attorney General intends to clarify that at no point in the civil claim filed by the US DOJ is the Prime Minister named as adefendant or have been alleged to have committed any criminal wrong doing.

Presently there is an ongoing investigation conducted by the RoyalMalaysia Police concerning matters related to 1MDB.
Given that the investigation is underway, it would not be appropriate to divulge details that may compromise the investigation.
The Attorney General must emphasise that it is crucial to preserve the integrity of the investigation as the public must not doubt the outcome of the investigation.

To date the Attorney General’s Chambers has yet to receive any request from the US DOJ to obtain any information or evidence. However, we would welcome such a request in line with our commitment in international cooperation and collaboration in our fight against money laundering and corrupt practices.

As the Public Prosecutor, the Attorney General will not hesitate to initiate proceedings against the perpetrators of criminal acts provided there is sufficient evidence to do so.
Any wrongdoing must and will be punished.

Malaysia will always uphold the rule of law.
TAN SRI DATO’ SRI HAJI MOHAMED APANDI BIN HAJI ALI

ATTORNEY GENERAL MALAYSIA

21 JULY 2016
http://www.agc.gov.my/agcportal/index.php?r=portal2/article&menu_id=MEFwUEVtZWVIcGdjb0c5Tkpadi8vZz09&artikel_id=RG8zVnNFd3Y2U0NxNXY5N2hSa2JWdz09

 

Published in: on July 21, 2016 at 11:30  Comments (9)