Launch & Forum: Kleptocrazy Malaysia: Declare Your Assets Now!

Kleptocrazy Malaysia: Declare Your Assets Now! is a campaign coordinated by C4 Center as one of the leading civil society organizations in partnership with other sectors of society, aims to provide an interactive platform for Malaysians to be actively and directly involved in combating corruption and abuse of power in three ways:

Firstly, to track public officials’ unexplained wealth or assets by taking photos or videos and submitting them online. Secondly, to cultivate a culture of whistleblowing and public-oriented reporting among the public. Thirdly, to get formal sources from the annual Auditor General’s reports on mismanagement, leakages and malpractices in the government sectors. Read more

Why are kleptocrats so are hard to get rid of? — Richard Cassin

Source: FCPA Blog

BY RICHARD L. CASSIN

Pic taken from the FCPA Blog

Corruption, we often hear, “undermines democratic institutions.” That’s a sterilized phrase. What does it really mean?

Start with a legitimately elected leader. If he’s weak and greedy — as many people are — he takes a few small bribes in return for helping cronies game the system.

The bribes are a breach of trust and have to be kept secret.

As time passes and bribes mount, the stakes go up.

The leader’s family and friends become part of the graft machine. They collect bribes through phony companies. They launder bribe money by buying luxury properties in France or New York or Vancouver.

Leaving office becomes more and more dangerous. Once out of power, the leader and his gang would be vulnerable. Keeping power is the only option.

To hold on, the leader corrupts judges and legislators. He buys the loyalty of generals. He pays off or threatens those who control the ballot boxes. Elections, if they still happen, are now phony.

Doing all that costs big money. So the leader becomes a full-blown kleptocrat. Treasuries are looted and resources stripped. Read more

Transcript of DOJ Press Conference 19.07.2016 on Kleptocracy Asset Recovery Initiative

United States Seeks to Recover More Than $1 Billion Obtained from
Corruption Involving Malaysian Sovereign Wealth Fund

Source: https://youtu.be/slNIgAhxh5g
Download word document

ATTORNEY GENERAL LYNCH: GOOD MORNING, ALL. GOOD MORNING AND THANK YOU ALL FOR BEING HERE. FOR TODAY’S ANNOUNCEMENT, I’M JOINED TODAY BY ASSISTANT ATTORNEY GENERAL FOR THE CRIMINAL DIVISION LESLIE CALDWELL AND JOINED BY THE UNITED STATES ATTORNEY FOR THE CENTRAL DISTRICT OF KEEFE ILENE DECKER AND ANDREW MCCABE AND MR. WEBBER, CHIEF OF THE INVESTIGATIVE DEPARTMENT AT THE REVENUE SERVICE AND WE’RE HERE TO ANNOUNCE A SIGNIFICANT STEP IN OUR ONGOING WORK TO COMBAT GLOBAL CORRUPTION AND ENSURE THAT THE UNITED STATES OFFERS NO SAFE HAVEN TO THOSE WHO ILLEGALLY USE PUBLIC FUNDS FOR PRIVATE GAIN.

AND TODAY THE DEPARTMENT OF JUSTICE HAS FILED A CIVIL COMPLAINT SEEKING TO FORFEIT AND RECOVER MORE THAN $1 BILLION IN ASSETS ASSOCIATED WITH AN INTERNATIONAL CONSPIRACY TO LAUNDER FUNDS STOLEN FROM 1 MALAYSIA DEVELOPMENT FUND OR 1MDB, A COMPANY WHOLLY OWNED BY THE GOVERNMENT OF MALAYSIA.

THE $1 BILLION IN ASSETS THAT WE’RE DISCUSSING TODAY ARE JUST A PORTION OF THE MORE THAN $3 BILLION THAT WAS STOLEN FROM 1MDB AND LAUNDERED TO AMERICAN INSTITUTIONS IN VIOLATION OF THE UNITED STATES LAW. Read more

Transcript of DOJ Press Conference 19.07.2016 on Kleptocracy Asset Recovery Initiative

United States Seeks to Recover More Than $1 Billion Obtained from
Corruption Involving Malaysian Sovereign Wealth Fund

Source: https://youtu.be/slNIgAhxh5g

ATTORNEY GENERAL LYNCH: GOOD MORNING, ALL. GOOD MORNING AND THANK YOU ALL FOR BEING HERE. FOR TODAY’S ANNOUNCEMENT, I’M JOINED TODAY BY ASSISTANT ATTORNEY GENERAL FOR THE CRIMINAL DIVISION LESLIE CALDWELL AND JOINED BY THE UNITED STATES ATTORNEY FOR THE CENTRAL DISTRICT OF KEEFE ILENE DECKER AND ANDREW MCCABE AND MR. WEBBER, CHIEF OF THE INVESTIGATIVE DEPARTMENT AT THE REVENUE SERVICE AND WE’RE HERE TO ANNOUNCE A SIGNIFICANT STEP IN OUR ONGOING WORK TO COMBAT GLOBAL CORRUPTION AND ENSURE THAT THE UNITED STATES OFFERS NO SAFE HAVEN TO THOSE WHO ILLEGALLY USE PUBLIC FUNDS FOR PRIVATE GAIN.

AND TODAY THE DEPARTMENT OF JUSTICE HAS FILED A CIVIL COMPLAINT SEEKING TO FORFEIT AND RECOVER MORE THAN $1 BILLION IN ASSETS ASSOCIATED WITH AN INTERNATIONAL CONSPIRACY TO LAUNDER FUNDS STOLEN FROM 1 MALAYSIA DEVELOPMENT FUND OR 1MDB, A COMPANY WHOLLY OWNED BY THE GOVERNMENT OF MALAYSIA.

THE $1 BILLION IN ASSETS THAT WE’RE DISCUSSING TODAY ARE JUST A PORTION OF THE MORE THAN $3 BILLION THAT WAS STOLEN FROM 1MDB AND LAUNDERED TO AMERICAN INSTITUTIONS IN VIOLATION OF THE UNITED STATES LAW.

1MDB WAS CREATED TO PROMOTE ECONOMIC DEVELOPMENT THROUGH INTERNATIONAL PARTNERSHIPS AND FOREIGN DIRECT INVESTMENT WITH THE ULTIMATE GOAL OF IMPROVING THE WELL-BEING OF THE MALAYSIAN PEOPLE.

UNFORTUNATELY AND TRAGICALLY, A NUMBER OF CORRUPT OFFICIALS TREATED THIS PUBLIC TRUST AS A PERSONAL BANK ACCOUNT. OUR COMPLAINT EDGED FROM 2001 TO 2015 THESE OFFICIALS AND ASSOCIATES CONSPIRED TO MISAPPROPRIATE AND LAUNDER BILLIONS OF DOLLARS FROM 1MDB.

THEY LAUNDERED THEIR FUNDS THROUGH OPAQUE ACTIONS IN BANK ACCOUNTS IN COUNTRIES AROUND THE WORLD INCLUDING SWITZERLAND, SINGAPORE AND THE UNITED STATES.

NOW, THE FUNDS WERE THEN USED TO PURCHASE A RANGE OF ASSETS FOR THE CONSPIRATORS AND THEIR RELATIVES AND ASSOCIATES INCLUDING HIGH END REALTIES IN NEW YORK AND LOS ANGELES AND ART WORKS BY MONET AND A JET AIRCRAFT.

TODAY’S CASE IS THE LARGEST SINGLE ACTION EVER BROUGHT BY THE KLEPTOCRACY ASSET INITIATIVE WHICH WAS ESTABLISHED BY ATTORNEY GENERAL ERIC HOLDER IN 2010 TO FORFEIT THE PROCEEDS OF FOREIGN OFFICIAL CORRUPTION AND WERE POSSIBLE TO USE THE RECOVERED ASSETS TO BENEFIT THE PEOPLE HARMED.

THIS CASE AND THE KLEPTOCRACY INITIATIVE AS A WHOLE SHOULD SERVE AS A SIGN OF OUR FIRM COMMITMENT TO FIGHTING INTERNATIONAL CORRUPTION. AND IT SHOULD ALSO SEND A SIGNAL THAT THE DEPARTMENT OF JUSTICE IS DETERMINED TO PREVENT THE AMERICAN FINANCIAL SYSTEM TO BE USED AS A CONDUIT FOR CORRUPTION AND SHOULD MAKE CLEAR TO CORRUPT OFFICIALS AROUND THE WORLD THAT WE WILL BE RELENTLESS IN OUR EFFORTS TO DENY THEM THE PROCEEDS OF THEIR CRIMES.

A CASE LIKE THIS TAKES A TEAM AND LET ME THANK THE TEAM OF PROSECUTORS AND PARALLELS FROM THE CRIMINAL DIVISIONS AND ASSET FORFEITING SECTION AND THE UNITED STATES ATTORNEY’S OFFICE FOR THE CENTRAL DISTRICT OF CALIFORNIA WHO HAVE WORKED TIRELESSLY ON THIS MATTER AND ALSO WANT TO THANK THE AGENTS FROM THE F.B.I.’S INTERNATIONAL CORRUPTION UNIT AND THE I.R.S. CRIMINAL INVESTIGATIONS DIVISION WHO ASSISTED THEM IN THIS CASE.

I’M ALSO GRATEFUL TO THE CRIMINAL OF INTERNATIONAL AFFAIRS FOR THEIR VITAL CONTRIBUTIONS. AT THIS TIME I’LL TURN THE PODIUM OVER TO ASSISTANT ATTORNEY GENERAL LESLIE CALDWELL WHO WILL SPEAK ABOUT TODAY’S FILING. THANK YOU.

CALDWELL: THANK YOU, ATTORNEY GENERAL LYNCH. THIS IS A SIGNIFICANT MILESTONE IN THE DEPARTMENT’S KLEPTOCRACY INITIATIVE AND OUR GLOBAL FIGHT DEFENSE CORRUPTION.

THE COMPLAINT FILED TODAY REALLY GOES IN GREAT DETAIL ABOUT THE COMPLEX WEB OF TRANSACTIONS THESE CO-CONSPIRATORS USED TO LAUNDER BILLIONS OF DOLLARS THEY STOLE FROM THE PEOPLE OF MALAYSIA. SEVERAL SPEAKERS WILL TALK ABOUT DIFFERENT ASPECTS OF THE CASE.

WHAT I’D LIKE TO FOCUS ON NOW IS ALLEGATIONS IN THE COMPLAINT INVOLVING TWO BOND OFFERINGS IN 2012 THROUGH WHICH 1MDB RAISED SOME OF THE MONEY SIPHONED OFF BY THE CORRUPT OFFICIALS AND THEIR ASSOCIATES. THE STATED PURPOSE OF THE BOND OFFERINGS WAS TO ALLOW 1MDB TO RAISE MONEY TO INVEST IN VARIOUS ENERGY ASSETS OF THE MALAYSIAN GOVERNMENT AND PEOPLE.

ALMOST IMMEDIATELY AFTER RECEIVING THE PROCEEDS OF THE TWO BOND ISSUES, ROUGHLY 40% OF THE MONEY THAT WAS RAISED WHICH WAS ABOUT $1.37 BILLION, THE 40% WAS THE $1.37 BILLION, WAS TRANSFERRED OUT OF 1MDB’S ACCOUNTS AND TRANSFERRED INTO A SWISS BANK ACCOUNT THAT WAS IN THE NAME OF A SHELL CORPORATION INCORPORATED IN THE BRITISH VIRGIN ISLANDS.

THE COMPLAINT ALLEGES THAT THE NAME OF THAT SHELL COMPANY WAS CHOSEN BECAUSE IT SOUNDED LIKE THE NAME OF A LEGITIMATE COMPANY THAT WAS INVOLVED IN THE BOND OFFERING BUT IN FACT THE SWISS BANK ACCOUNT WAS CONTROLLED BY CORRUPT OFFICIALS AND ASSOCIATES.

FROM SWITZERLAND THE CORRUPT OFFICIALS TRANSFERRED MONEY USING A SERIES OF TRANSACTIONS INVOLVING MORE SHELL COMPANIES AND BANK ACCOUNTS LOCATED ALL OVER THE GLOBE. EVENTUALLY MORE THAN $230 MILLION OF THAT MONEY FOUND ITS WAY IN THE ACCOUNT OF SHELL COMPANIES WHOSE BENEFICIAL OWNERS WAS A CLOSE RELATIVE OF A SENIOR 1MDB OFFICIAL AND THAT INDIVIDUAL USED MONEY TO BUY LUXURY REAL ESTATE IN THE UNITED STATES AND OTHER ASSETS AND ALSO USED THE MONEY TO FUND A MOTION PICTURE COMPANY CALLED RED GRANITE PICTURES WHO IN TURN USED MORE THAN $100 MILLION OF THAT MONEY TO FINANCE THE AWARD-WINNING 2013 FILM “THE WOLF OF WALL STREET.”

OF COURSE, NEITHER 1MDB OR THE MALAYSIAN PEOPLE SAW A PENNY OF PROFIT FROM THAT FILM OR THE OTHER ASSETS PURCHASED WITH FUNDS SIPHONED FROM 1MDB. INSTEAD THAT MONEY WENT TO RELATIVES AND ASSOCIATES OF THE CORRUPT OFFICIALS OF 1MDB AND OTHERS.

BECAUSE THE ASSETS WERE LAUNDERED MONEY, THE FUTURE RIGHTS TO THAT FILM ARE SUBJECT TO THE FORFEITURE COMPLAINT FILED TODAY IN LOS ANGELES.

THE ASSISTANT WE’VE GOTTEN FROM INTERNATIONAL PARTNERS HAS BEEN CRITICAL IN IDENTIFYING AND RESTRAINING ASSETS AND I THINK THAT INTERNATIONAL COOPERATION AND THE ACTION WE’RE TAKING TODAY, WHICH I SAID IS THE LARGEST ACTION TAKEN TO DATE IN CONNECTION WITH OUR KLEPTOCRACY INITIATIVE AND SHOULD SEND A MESSAGE TO KLEPTOCRATS AND OTHERS THAT THE UNITED STATES IS NOT A SAFE HAVEN FOR THEIR STOLEN MONEY AND CANNOT AVOID LAW ENFORCEMENT THROUGH SHELL COMPANIES, NOMINEE ENTITIES AND OTHER STRUCTURES THAT ARE ESSENTIALLY DESIGNED TO THWART LAW ENFORCEMENT.

THE DEPARTMENT WILL CONTINUE TO TRACK AND CONTINUE TO SEIZE ASSETS THAT KLEPTOCRATS AND OTHER CORRUPT OFFICIALS STEAL FROM THE PEOPLE OF THEIR COUNTRIES. I NOW WOULD LIKE TO TURN IT OVER TO ILENE DECKER FROM THE U.S. ATTORNEY’S OFFICE IN CALIFORNIA.

 

DECKER: GOOD MORNING. I’M FROM THE DISTRICT ATTORNEY’S OFFICE BASED IN LOS ANGELES. IT WAS FILED BY PROSECUTORS IN MY OFFICE, THE COMPLAINT, IN THE UNITED STATES DISTRICT COURT IN LOS ANGELES.

ANOTHER PHASE OF THIS MONEY LAUNDERING SCHEME OCCURRED IN EARLY 2013 IN CONNECTION WITH A THIRD BOND OFFERING RANGED BY GOLDMAN SACHS INTERNATIONAL.

IN THIS OFFERING, 1MDB RAISED APPROXIMATE $3 BILLION PURPORTEDLY TO FORM A JOINT VENTURE WITH AN ENTITY FROM ABU DHABI TO PROMOTE GROWTH, INSTEAD THE OFFICIALS MISAPPROPRIATED A SIGNIFICANT PORTION OF THE FUNDRAISED. IN FACT, ONLY DAYS AFTER THE INITIAL BOND SALE, APPROXIMATE $1.26 BILLION WAS DIVERTED FOR THE BENEFIT OF INDIVIDUALS ASSOCIATED WITH 1MDB.

APPROXIMATE $137 MILLION OF THE PILFERED MONEY WAS SPENT TO PURCHASE WORKS OF ART, INCLUDING A $35 MILLION WORK BY CLAUDE MONET OF THE WORK IN VENICE AND IT WAS NOT FOR THE BENEFIT OF THE POPULATION BUT OBTAINED TO FURTHER ENHANCE THE LUXURY AND LAVISH LIFESTYLES OF THOSE STEALING MONEY FROM 1MDB.

FUNDS DIVERTED FROM THE THIRD BOND OFFERING WERE ALSO TRACED TO THE PURCHASE OF AN INTEREST IN THE PARK LANE HOTEL IN NEW YORK. AND WE SEEK TO FORFEIT APPROXIMATE A QUARTER OF A BILLION DOLLARS INVESTED IN THAT LUXURY HOTEL.

THE LAUNDERING OF THE PROCEEDS CONTINUED THROUGHOUT 2013 WITH AN ADDITIONAL $106 MILLION USED TO PURCHASE AN INTEREST IN E.M.I. MUSIC PUBLISHING. E.M.I. IS THE WORLD’S THIRD LARGEST MUSIC PUBLISHING COMPANY BY REVENUE AND THE COMPANY HAS THE RIGHTS TO PUBLISH APPROXIMATE $2.3 MILLION MUSICAL COMPOSITIONS INCLUDING A NUMBER OF TOP HITS FROM GRAMMY AWARD-WINNING ARTISTS.

SINCE THE CONSPIRATORS PURCHASED INTEREST IN E.M.I. IT WAS THEY AND NOT THE CITIZENS OF MALAYSIA WHO EARN MONEY EVERY TIME THOSE SONGS WERE PERFORMED PUBLICLY, RECORDED OR DOWNLOADED.

IN SEEKING TO SEIZE THESE FORFEITED ITEMS THE DEPARTMENT OF JUSTICE IS SENDING A MESSAGE WE WILL NOT ALLOW THE UNITED STATES TO BECOME A PLAYGROUND FOR THE CORRUPT AND THAT WE WILL NOT ALLOW IT TO BE A PLATFORM FOR MONEY LAUNDERING OR A PLACE TO HIDE AND INVEST IN STOLEN RICHES. THANK YOU VERY MUCH. NOW I’LL TURN THE PODIUM OVER TO ANDREW MCCABE.

 

MCCABE: GOOD MORNING. SO I’LL WALK YOU THROUGH THE DETAILS OF ONE OF THE ADDITIONAL SCHEMES THAT HAVE BEEN OUTLINED IN TODAY’S COMPLAINT. AS ALLEGED IN THE COMPLAINT NOT LONG AFTER 1MDB WAS ESTABLISHED IN 2009 CORRUPT OFFICIALS AT 1MDB AND THEIR ASSOCIATES BEGAN A SOPHISTICATED SCHEME TO ENRICH THEMSELVES.

IN THE FIRST TWO YEARS OF THEIR EXISTENCE, ALMOST $1 BILLION WAS TRANSFERRED OUT OF 1MDB TO BANK ACCOUNTS IN SHELL CORPORATIONS AND THEY WERE CONTROLLED BY ASSOCIATES OF CORRUPT 1MDB OFFICIALS.

THE FUND WERE STOLEN UNDER THE PRETENCE OF HAVING 1MDB INVEST IN AN OIL EXPLORATION JOINT VENTURE WITH A FOREIGN PARTNER. ON PAPER, THE $1 BILLION WAS TO BE 1MDB’S INVESTMENT IN WHAT PURPORTED TO BE NATIONAL RESOURCE RIGHTS. BUT THIS WASN’T A LEGITIMATE INVESTMENT FOR 1MDB OR THE MALAYSIAN PEOPLE.

INSTEAD, THE FUNDS TRANSFERRED TO THE SHELL COMPANIES WERE USED TO THE PERSONAL ENRICHMENT OF THE CORRUPT OFFICIALS AND THEIR ASSOCIATES. THEY USED THE MONEY TO PAY GAMBLING DEBTS AT LAS VEGAS CASINOS, THEY RENTED LUXURY YACHTS, THEY HIRED A INTERIOR DECORATOR IN LONDON AND SPENT MILLIONS ON PROPERTY, SOME OF WHICH IS SUBJECT TO SEIZURE AND FORFEITURE.

AMONG THE PURCHASES WAS A JET FOR THE PURCHASE PRICE OF $35 MILLION.

SO WHY DOES THIS MATTER SO MUCH TO US? CERTAINLY THERE’S A LOT GOING ON IN THE WORLD RIGHT NOW, TERRORIST ATTACKS, VIOLENT CRIME AND SERIOUS THREATS TO AMERICAN CITIZENS AND PEOPLE AROUND THE WORLD. WHY DOES THE CORRUPTION CASE HALFWAY RAN THE WORLD MATTERS SO MUCH TO US HERE TODAY?

WELL, I’LL TELL YOU FOR A FEW REASONS. FIRST, BECAUSE SOME OF THE PROFITS OF THESE SCHEMES WERE INVESTED IN THE UNITED STATES. AND WHEN CORRUPT OFFICIALS BRING THEIR ILL-GOTTEN GAINS TO THE UNITED STATES, THEY ALSO BRING WITH THEM THEIR CORRUPT PRACTICES AND DISREGARD FOR THE RULE OF LAW AND THAT PRESENTS A THREAT TO OUR ECONOMY AND IMPACTS TRADE AND INVESTMENT AND FUELS THE GROWTH OF CRIMINAL ENTERPRISES AND UNDERMINES OUR FAIR DEMOCRATIC PROCESSES.

SECOND, BECAUSE THE STABLE, HEALTHY DEMOCRACIES AROUND THE WORLD ARE THE CORNERSTONE OF GLOBAL SECURITY. THE MORE WE CAN DO TO HELP OUR INTERNATIONAL PARTNERS ESTABLISH AND MAINTAIN STABLE GOVERNMENTS, ACCOUNTABLE TO THE RULE OF LAW, THE MORE WE DO TO ENSURE U.S. NATIONAL SECURITY.

AND FINALLY, WE DO IT BECAUSE THE F.B.I. AND THE DEPARTMENT OF JUSTICE AND OUR COLLEAGUES AND FEDERAL LAW ENFORCEMENT ARE UNIQUELY POSITIONED TO PROVIDE THE SORT OF ASSISTANCE. THE MALAYSIAN PEOPLE WERE DEFRAUDED ON AN ENORMOUS SCALE. ITS SCHEMES WHOSE TENTACLES REACHED AROUND THE WORLD.

THIS CASE IS BEYOND ANY SINGLE AGENCY’S ABILITY TO EFFECTIVELY INVESTIGATE. WE HAVE INVESTIGATORS AND PROSECUTORS WITH DEEP EXPERIENCE WORKING MATTERS LIKE THIS SO OUR INVOLVEMENT IS A NATURAL FIT.

LAST YEAR WE ESTABLISHED THREE DEDICATED INTERNATIONAL CORRUPTION SQUADS BASED IN NEW YORK, LOS ANGELES, AND HERE IN WASHINGTON. THESE SQUADS INCLUDE AGENTS, ANALYSTS AND ACCOUNTANTS WHO ARE EXPERTS IN COMPLEX FINANCIAL SCHEMES.

THESE SPECIALISED TEAMS ARE SHOWING REAL RESULTS. THIS IS THE LARGEST KLEPTOCRACY SEIZURE IN U.S. HISTORY. WE HOPE THIS INVESTIGATION WILL SEND A MESSAGE TO CORRUPT OFFICIALS AROUND THE WORLD THAT NO PERSON, NO COMPANY, NO ORGANISATION IS TOO BIG, TOO POWERFUL, OR TOO PROMINENT.

NO ONE IS ABOVE OR BEYOND THE LAW. SO AT THIS POINT, I’D LIKE TO THANK A FEW OF OUR PARTNERS. FIRST, I’D LIKE TO THANK OUR F.B.I. LEGAL OFFICES, THESE TEAMS ARE STATIONED OVERSEAS TO COORDINATE GLOBAL INVESTIGATIONS LIKE THIS. AND PART OF THEIR JOB IS TO BUILD STRONG PARTNERSHIPS SO WE CAN WORK CLOSELY, QUICKLY AND EFFICIENTLY WITH OUR INTERNATIONAL PARTNERS ON CRIMINAL AND TERRORIST THREATS.

I’D ALSO LIKE TO THANK OUR PARTNERS WITH THE I.R.S., THE LOS ANGELES U.S. ATTORNEY’S OFFICE, THE CRIMINAL DIVISION HERE AT THE DEPARTMENT OF JUSTICE, AND OF COURSE OUR AGENTS AND ANALYSTS IN THE F.B.I.’S NEW YORK AND LOS ANGELES FIELD OFFICES.

THIS CASE IS ONGOING. CORRUPTION, UNFORTUNATELY, WILL NEVER BE ERADICATED BECAUSE, QUITE FRANKLY, GREED NEVER GOES AWAY. BUT WE ARE COMMITTED TO WORKING WITH OUR PARTNERS HERE AT HOME AND AROUND THE WORLD TO DO WHAT WE CAN TO STOP IT, TO ENSURE THE LEGITIMACY OF PUBLIC OFFICIALS AND TO CREATE A LEVEL PLAYING FIELD FOR ALL. NOW I’D LIKE TO INTRODUCE CHIEF RICHARD WEBBER OF THE I.R.S. CRIMINAL INVESTIGATION DIVISION.

 

WEBBER: THANK YOU, ON BEHALF OF THE I.R.S. CRIMINAL INVESTIGATION I’M PROUD TO STAND WITH THE ATTORNEY GENERAL TO ANNOUNCE THE SEIZURE OF SEVERAL REAL PROPERTIES AND ASSETS IN CONNECTION WITH THE INVESTIGATION.

1MDB WAS ORIGINALLY ESTABLISHED TO DRIVE STRATEGIC INITIATIVES FOR LONG TERM ECONOMIC DEVELOPMENT OF MALAYSIA. INSTEAD, IT IS ALLEGED THAT MONEY WAS SIPHONED FROM THIS FUND FOR PERSONAL INVESTMENT, NOT FOR THE GOOD OF THE MALAYSIAN PEOPLE AND NOT FOR THE ACHIEVEMENT OF THEIR GOALS.

THE CASE IS ANOTHER EXAMPLE OF THE ABILITY TO FOLLOW MONEY THROUGH COMPLEX MONEY LAUNDERING SCHEMES AND THE WEB OF OPAQUE TRANSACTIONS AND FRAUDULENT SHELL CORPORATIONS.

IN OCTOBER OF 2015, MY L.A. FIELD OFFICE JOINED THE INVESTIGATION SPECIFICALLY FOCUSING ON RED GRANITE PICTURES. APPROXIMATE $238 MILLION WAS WIRED TO RED GRANITE CAPITAL, AN ENTITY CONTROLLED BY RIZA AZIZ.

WIRE TRANSFERS TOTALLING APPROXIMATE $64 MILLION WAS SENT FROM THE RED GRANITE CAPITAL ACCOUNT FOR AN ACCOUNT AT CITI NATIONAL BANK IN THE UNITED STATES, MAINTAINED BY RED GRANITE PICTURES, A PRODUCTION COMPANY ALSO OWNED BY AZIZ.

THIS MONEY WAS USED TO FUND RED GRANITE PICTURES OPERATIONS INCLUDING THE PRODUCTION OF THE FILM “THE WOLF OF WALL STREET.” ADDITIONALLY THE MISAPPROPRIATIONS WAS USED TO ACQUIRE $100 MILLION IN RELIES IN THE U.S. AND THE UNITED KINGDOM AND ELSEWHERE FOR THE BENEFIT OF AZIZ.

INCLUDING IN THE LIST OF PROPERTIES, AND WE HAVE THE PROPERTIES OUTLINED IN THE CIVIL COMPLAINT IN VARIOUS DIAGRAMS BUT THE PROPERTIES INCLUDE A BEVERLY HILLS MANSION, CURRENTLY UNDER CONSTRUCTION, A PARK LAUREL CONDO IN NEW YORK CITY AND A TOWNHOUSE IN THE UNITED KINGDOM.

FIGHTING WORLDWIDE CORRUPTION IS IN THE INTEREST OF THE UNITED STATES. CORRUPTION THREATENED GOOD GOVERNANCE, SUSTAINABILITY DEVELOPMENT AND THE DEMOCRATIC PROCESS AND FAIR BUSINESS PRACTICES. CORRUPTION ERODES TRUST IN GOVERNMENT AND PRIVATE INSTITUTIONS ALIKE AND UNDERMINES CONFIDENCE AND FAIRNESS OF FREE AND OPEN MARKETS AND IT BREEDS CONTEMPT FOR THE RULE OF LAW.

THIS INVESTIGATION IS CONTINUING AND ONGOING. WE WILL NOT ALLOW THE MASSIVE AND BLATANT AVERSION OF BILLIONS OF DOLLARS FROM 1MDB AND THE ALLEGED LAUNDERING OF THOSE FUNDS THROUGH U.S. FINANCIAL INSTITUTIONS TO CONTINUE.

THIS CASE REPRESENTS A MODEL FOR INTERNATIONAL COOPERATION IN SIGNIFICANT CROSS BORDER MONEY LAUNDERING MATTERS AND SENDS A MESSAGE THAT CRIMINALS CANNOT EVADE LAW ENFORCEMENT AUTHORITIES SIMPLY BY LAUNDERING MONEY THROUGH MULTIPLE JURISDICTIONS AND THROUGH A WEB OF SHELL CORPORATIONS. THANK YOU AND LET ME TURN THE PODIUM BACK TO THE ATTORNEY GENERAL.

 

ATTORNEY GENERAL LYNCH: THANK YOU, CHIEF WEBER. WE’RE HAPPY TO TAKE QUESTIONS AT THIS TIME.

 

REPORTER: IF THIS IS A FUND WHOLLY OWNED BY THE MALAYSIAN GOVERNMENT, AT WHAT POINT IF EVER DID THE MALAYSIAN GOVERNMENT SEND UP A FLAIR AND SAY WE THINK LOTS OF OUR MONEY IS BEING STOLEN?

 

ATTORNEY GENERAL LYNCH: THE INVESTIGATION IS ONGOING SO WE’RE NOT ABLE TO PROVIDE A LOT OF DETAIL NOW AS TO WHEN WE BEGAN LOOKING INTO THIS OR WHAT PRECIPITATED THAT. WE CAN GET TO THE CONCLUSION OF THAT, WE MAY BE ABLE TO PROVIDE MORE INFORMATION ABOUT THAT BUT I’M NOT ABLE TO GO INTO THAT NOW.

 

REPORTER: THE MALAYSIAN OFFICIALS WERE AWARE PROJECTS AREN’T BEING FUNDED THE WAY THEY WERE SUPPOSED TO AND THE MONEY BEING RAISED WAS NOT BEING DIVERTED CORRECTLY?

 

ATTORNEY GENERAL LYNCH: CERTAINLY I CAN’T SPEAK TO THE STATE OF MIND OF THE INDIVIDUALS AT THAT TIME. I CERTAINLY THINK THAT AS WE’VE INDICATED, PEOPLE ARE AWARE OF OUR INVESTIGATION AND AWARE OF THE ISSUES THAT HAVE BEEN RAISED THERE AND CERTAINLY AS OUR HOPE AND GOAL AT THE CONCLUSION OF THIS FORFEITURE PROCESS TO RETURN THE FUNDS TO MALAYSIA, WHETHER THOSE INITIAL PROJECTS WILL STILL BE USED OR NOT WE DON’T KNOW BUT COULD BE USED BY THE GOVERNMENT FOR THE BENEFIT OF THE PEOPLE THERE.

 

REPORTER: PRIME MINISTER NAJIB SET IT UP IN 2009 AND IS NOT NAMED IN THE COURT DOCUMENTS YOU FILED TODAY. WOULD YOU RULE OUT IMPLICATING HIM IN ANY OF YOUR FUTURE INVESTIGATIONS OR COURT FILINGS?

 

ATTORNEY GENERAL LYNCH: WE DON’T HAVE A SPECIFIC COMMENT ON ANYONE WHO HASN’T BEEN NAMED SO FAR BECAUSE THIS IS A CIVIL FORFEITURE COMPLAINT AND WILL LOOK A LITTLE DIFFERENT FROM WHAT YOU’VE SEEN BEFORE. WE ESSENTIALLY ARE DESCRIBING THE TRACING OF THE ASSETS, THE USE OF THE FUND AND WHO WAS INVOLVED IN THE TRANSACTIONS THERE. SO WE’RE NOT COMMENTING ON ANYONE ELSE WHO MAY OR MAY NOT BE NAMED IN THE MATTER AT THIS TIME.

 

REPORTER: WASN’T THERE SOME KIND OF AGREEMENT BETWEEN THE U.S. PROSECUTORS AND THE MALAYSIAN GOVERNMENT NOT TO NAME THE PRIME MINISTER.

 

ATTORNEY GENERAL LYNCH: OUR AGREEMENT IS TO ONLY DRAFT THE COMPLAINT AS WE DO IN CIVIL FORFEITURE MATTERS AND IT’S A COMPLAINT AGAINST THE ACTUAL MONEY OR ASSETS AS OPPOSED TO AGAINST AN INDIVIDUAL. WE DON’T HAVE ANNOUNCEMENTS ON ANYONE NOT NAMED SO FAR. SO THIS WILL BE A COMPLAINT THAT SEEKS TO RESTRAIN AND FORFEIT THE SPECIFIC ASSETS MENTIONED.

 

REPORTER: IF THERE ARE $3 BILLION MISAPPROPRIATED WHY ARE YOU SEEKING ON THE FORFEITURE OF $1 BILLION?

 

ATTORNEY GENERAL LYNCH: YOU’LL SEE FROM THE COMPLAINT WE’VE BEEN ABLE TO TRACE APPROXIMATE $1 BILLION AS HAVING GONE THROUGH THE U.S. FINANCIAL SYSTEMS. AND THAT MONEY LAUNDERING ESSENTIALLY GIVES US THE JURISDICTION OVER THOSE ASSETS. WE’VE ALSO BEEN ABLE TO LOCATE SPECIFIC ASSETS IN THE U.S. AND OVERSEAS. AS ALSO WAS DESCRIBED, HOWEVER, AND IS OFTEN AS COMMON IN CORRUPTION CASES, A LOT OF THE FUNDS WERE DISSIPATED, PAYING GAMBLING EXPENSES, LIFESTYLE EXPENSES AND THINGS OF THAT NATURE IS A LOT OF THE FUNDS HAVE BEEN DISSIPATED BUT AS WE’VE NOTED, THIS INVESTIGATION IS ONGOING AND TO THE EXTENT THAT WE CAN IN FACT CLEARLY LOCATE OTHER ASSETS AND TRACE THEM, WE WOULD CONTINUE THE ACTIONS HERE.

 

REPORTER: WHAT’S THE SPECIFIC PROCESS FOR “THE WOLF OF WALL STREET” IS PROBABLY THE MOST WELL KNOWN ASSET, HOW DO YOU GO ABOUT GETTING THE RIGHTS? IS IT THE WHOLE MOVIE OR JUST RED GATES?

 

ATTORNEY GENERAL LYNCH: RED GRANITE.

 

REPORTER: A PORTION OF THE ASSETS, HOW DO YOU COLLECT THE ROYALTIES?

 

ATTORNEY GENERAL LYNCH: ESSENTIALLY WE’RE SEEKING TO RESTRAIN ANYTHING THAT RED GRANITE WOULD RECEIVE ON AN ONGOING BASIS FROM ROYALTIES OR ANY FEES COMING IN FROM THEIR INTEREST IN THAT FILM.

 

REPORTER: WHAT ABOUT PAST ROYALTIES?

 

ATTORNEY GENERAL LYNCH: I DON’T BELIEVE WE CAN. LET ME CHECK WITH LESLIE ON THAT.

 

  1. CALDWELL: NO, I DON’T THINK WE’RE ABLE TO SEIZE ANYTHING RETROACTIVELY.

 

ATTORNEY GENERAL LYNCH: GOING FORWARD, OF COURSE IT WOULD NOT BE THE ENTIRE PROCEEDS BUT WHAT RED GRANITE IS ENTITLED TO RECEIVE IS WHAT WE’RE SEEKING TO RESTRAIN. THEN I WAS COMING HERE AND I’LL GO BACK TO YOU.

 

 

REPORTER: DO YOU KNOW IF ANY FINANCIAL INSTITUTIONS LIKE GOLDMAN SACHS WERE AWARE OF THE MONEY LAUNDERING THAT WAS GOING ON, AND IS THAT SOMETHING YOU PLAN TO INVESTIGATE GOING FORWARD?

 

ATTORNEY GENERAL LYNCH: I CAN TELL YOU AGAIN, WE’RE FOCUSING NOW ON THE TRACING OF THE ASSETS. LESLIE, YOU WANT TO ADD ANYTHING ON ANY OF THE ENTITIES THERE?

 

  1. CALDWELL: SO I CAN’T COMMENT ON THE INVESTIGATION THAT WE’VE DONE THUS FAR BUT YOU CAN SEE IN THE COMPLAINT THAT GOLDMAN SACHS AND A NUMBER OF OTHER INSTITUTIONS WERE INVOLVED IN VARIOUS ASPECTS OF THESE TRANSACTIONS. WE ARE CONTINUING TO INVESTIGATE AND WE’LL GO WHEREVER THAT EVIDENCE TAKES US.

 

ATTORNEY GENERAL LYNCH: AND I PROMISED IN YOUNG LADY NEXT TO YOU.

 

REPORTER: THE CASE DOES TARGET THE HEAD OF STATE OF A U.S. ALLY, WHAT EXTENT DID DIPLOMATIC CONCERNS PLAY A ROLE IN THE CASE OR WERE THERE ANY DISCUSSING WITH THE STATE DEPARTMENT ABOUT THIS AND TWO, ALSO, WHY NOT CHARGE THE PEOPLE THAT YOU NAMED IN THE FORFEITURE ACTION, WHY JUST BRING THE FORFEITURE ACTION FIRST?

 

ATTORNEY GENERAL LYNCH: IT’S IMPORTANT THAT WHEN WE HAVE THE EVIDENCE WE CAN SEEK RESTRAINT OF ASSETS TO MOVE IN A FORFEITURE CASE TO IS HE CAN AVOID THEM BEING SOLD TO SOMEONE ELSE OR DISSIPATED OR TRANSFERRED TO SOMEONE ELSE THAT WOULD MAKE IT HARDER FOR US TO RESTRAIN THOSE ASSETS. AS WITH ALL CASES EVEN WITH CIVIL FORFEITURE WE BRING THE ACTION WHEN THE FORCES COME TOGETHER AND WE FEEL WE HAVE SUFFICIENT CAUSE TO GET A JUDICIAL ORDER TO ALLOW FOR SEIZURE AND RESTRAINT OF ASSETS AND WHERE WE ARE HERE. WITH RESPECT TO GOVERNMENT OFFICIALS IN MALAYSIA, I DON’T HAVE A COMMENT ON ANYONE IN PARTICULAR EXCEPT TO SAY THAT MALAYSIA DOES CONTINUE TO BE AN ALLY OF OURS, PARTICULARLY IN COUNTERTERRORISM EFFORTS, BUT THIS EFFORT IS INTENDED TO — AS IS THE ENTIRE KLEPTOCRACY INITIATIVE TO BENEFIT THAT COUNTRY BY ALLOWING THE RETURN OF ASSETS AT THE END OF THIS PROCESS TO THE GOVERNMENT OF MALAYSIA AND TO THE MALAYSIAN PEOPLE.

 

REPORTER: THANKS. I JUST WANT TO FOLLOW UP ON THE QUESTION ABOUT PRIME MINISTER NAJIB. THE DESCRIPTION IN THE COMPLAINT OF THE MALAYSIAN OFFICIAL NUMBER ONE CERTAINLY SEEMS TO MATCH THE PRIME MINISTER’S BIOGRAPHY AND JOB DESCRIPTION. CAN YOU ELABORATE A LITTLE BIT ON THE LEGAL CONSIDERATIONS INVOLVED THAT PREVENT YOU OR THAT HELP YOU DECIDE NOT TO IDENTIFY THAT OFFICIAL AND OTHERS BY NAME WHEN SEVERAL OTHER PEOPLE WERE IDENTIFIED?

 

ATTORNEY GENERAL LYNCH: I CAN SAY AS I’VE INDICATED BEFORE, WHEN WE HAVE A CIVIL COMPLAINT THAT TRACES ASSETS FROM ANY ENTITY THROUGH OTHERS AND INTO AN ASSET THAT WE’RE TRYING TO SEIZE, WE ESSENTIALLY ALLEGE WHAT WE NEED TO ALLEGE WITH SPECIFICITY IN ORDER TO OBTAIN THE LEGAL PROCESS THAT WE NEED TO OBTAIN. WE DON’T GO BEYOND THAT AND SO WE’RE NOT GOING BEYOND THAT IN THIS PARTICULAR COMPLAINT.

 

ATTORNEY GENERAL LYNCH: THANK YOU ALL. THANK YOU.