Jho Low gives up $1 billion in assets to settle 1MDB suits

BLOOMBERG/GOH SENG CHONG

The US 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, reported Bloomberg.

The 1MDB global corruption scandal toppled the previous Malaysian government of Najib Razak, ensnared a Goldman Sachs and set off investigations across the globe. The proposed settlement was filed 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 US 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 as well as mansions, diamonds and even Hollywood movie productions. The agreement does not include an admission of guilt or wrongdoing but doesn’t release Low from other criminal charges.

“We were pleased to help negotiate this historic resolution in order to preserve the tremendous value of assets involved, it is one of the largest civil forfeiture settlements in US history and represents a voluntary return of each and every asset claimed by the Department of Justice,”said Chris Christie, the former governor of New Jersey.

The US Justice Department stated that 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. This is in addition to $260 million of assets seized earlier, including a super-yacht. The value of the recouped assets could be even higher based on estimates in the original lawsuits and the final sale price.

Earlier this year, the US returned $200 million to Malaysia recovered as part of the 1MDB litigation. That included around $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.

The whereabouts of Low himself remain a mystery. Malaysian police have said he 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.

But even after assets are seized, the proceeds from them can end up in legal limbo until a court awards judgement in favour of the US 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 Prime Minister Mahathir Mohamad 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.