12 Sep 2019
Federal prosecutors in Los Angeles have been working for three years to recover assets around the world that were allegedly acquired with billions of dollars stolen from Malaysia’s 1MDB fund by people associated with former prime minister Najib Razak.
But the question of whether the civil forfeiture lawsuits for overseas assets, acquired by foreigners with Malaysian money, actually belong in a Southern California courtroom has yet to be resolved.
Tarek Obaid, a businessman with dual Saudi and Swiss citizenships, is going to court Wednesday to argue that a Los Angeles-based federal judge doesn’t have jurisdiction to order the seizure of his shares in Palantir Technologies Inc., allegedly bought with 1MDB-linked funds.
The outcome of Obaid’s challenge before the U.S. Court of Appeals in Pasadena, California, will be closely watched by Low Taek Jho, the Malaysian financier better known as Jho Low, and Riza Aziz, Najib’s stepson, who are fighting the Justice Department’s attempts to seize their properties in London.
The U.S. has brought 30 forfeiture lawsuits seeking real estate, investments, art and jewelry valued at $1.7 billion that Low, the alleged mastermind behind the looting of 1MDB, and his accomplices bought. The lawsuits were put on hold in 2017 so they wouldn’t interfere with a separate criminal investigation, but Obaid was allowed to appeal a ruling that let the forfeiture case against him to go ahead in Los Angeles.
U.S. District Judge Dale Fischer said last year, when she denied Obaid’s request to dismiss the lawsuit, that there was “substantial ground for disagreement” whether Los Angeles was the proper venue.
Specifically, the judge expressed concern that the “branch” of the 1MDB money-laundering conspiracy the Justice Department linked to Southern California wasn’t the same as the one in which Obaid allegedly received funds he used to buy the Palantir shares.
The U.S. claims the 1MDB money was laundered through shell companies with bank accounts in the U.S. and abroad. The money was used to invest in assets in the U.S. and overseas, according to the Justice Department.
Obaid’s role in the 1MDB scandal pertains to an early phase of the alleged conspiracy. Soon after 1Malaysia Development Berhad was created in 2009 as a government-owned development company, Low arranged a meeting aboard a yacht off the coast of Monaco between Najib, who is identified as “Malaysian Official 1” in court filings and Obaid, according to U.S. prosecutors. They were to discuss a joint venture between 1MDB and Obaid’s company PetroSaudi International.
By Edvard Pettersson, Bloomberg, 11 September 2019
Read more at Bloomberg
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