Jho Low Strikes Billion Dollar 1MDB Pact With U.S. Over Lawsuits
31 Oct 2019

The U.S. Justice Department has struck a deal with fugitive financier Jho Low to recoup almost a billion dollars looted from Malaysian investment fund 1MDB, in what would be the biggest recovery from a decade-old anti-corruption crackdown.

The 1MDB global corruption scandal has toppled a government, 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, would help resolve forfeiture cases tied to Low, who prosecutors say orchestrated the theft of more than $4 billion from 1MDB that ended up paying for a private jet, a superyacht, mansions, diamonds and even Hollywood movie productions. The agreement doesn’t include an admission of guilt or wrongdoing. It’s unclear whether it affects the criminal charges against Low in the U.S.

”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.”

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 paying for the lavish lifestyle of Jho Low and his associates.

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 1MDB scandal. A former senior executive at the firm has pleaded guilty to his role.

The Justice Department settlement would allow it to recover proceeds from properties in Los Angeles, New York and London, and the sale of a Bombardier jet. Jho Low is also expected to surrender his claim to a superyacht that has already been seized by the Malaysian government and sold. In all, a settlement would resolve more than a dozen forfeiture lawsuits.

By Sridhar Natarajan and Edvard Pettersson, Bloomberg, 30 October 2019

Read more at Bloomberg

RiskScreen: Eliminating Financial Crime with Smart Technology

Advance your CPD minutes for this content, by signing up and using the CPD Wallet

FREE CPD Wallet