NEW YORK • A United States federal grand jury is examining allegations of corruption involving Malaysian Prime Minister Najib Razak and people close to him, according to two people with knowledge of the investigation.
The inquiry, being run by a unit of the Justice Department that investigates international corruption, is focused on properties in the US that were bought in recent years by shell companies that belong to Datuk Seri Najib's stepson, as well as other real estate connected to a close family friend, said the people knowledgeable about the case, who asked for anonymity because they were not authorised to discuss it.
Investigators are also looking at nearly US$700 million (S$991 million) deposited into Mr Najib's personal bank account.
Domestic pressure on Mr Najib intensified on Monday as two separate courts dealt him legal setbacks. And the head of the country's central bank, which is investigating transactions involving 1Malaysia Development Berhad (1MDB), said it had submitted its findings to Malaysia's Attorney- General. "Right now, we know that the public wants answers to these questions, and they deserve to get the answers," said central bank chief Zeti Akhtar Aziz, according to The Malaysian Insider.
The Justice Department investigation is still in its early days, and it could take years to determine if any federal laws were broken. It was opened partly in response to an examination by The New York Times (NYT) of condominiums at the Time Warner Center in Manhattan whose ownership is hidden behind shell companies, according to the people with knowledge of the case.
In one article, NYT documented more than US$150 million in luxury residential properties connected either to Mr Najib's stepson Riza Aziz or to family friend Jho Low. Mr Low has also been found to have been involved in business deals with 1MDB, which has run into serious financial problems.
Investigators in several countries are examining allegations that money from 1MDB is missing. This month, the Swiss authorities said they had frozen several individuals' bank accounts, and inquiries are under way in Hong Kong and Singapore as well as in Malaysia.
Mr Najib's office did not comment on the inquiry.
A representative for Mr Aziz said he was not involved in any probe, adding that "there has never been anything inappropriate" about his business activities.
A spokesman for Mr Low said he had not been notified that he was the subject of any investigations, and that his business "adheres to all relevant regulatory requirements".
A spokesman for the Justice Department declined to comment.
The details of the corruption allegations involving Mr Najib and people connected to him are complex and multifaceted. The authorities in each country are focusing on the aspects that fall in their jurisdictions.
In the US, officials are examining the properties tied to Mr Aziz and Mr Low, which could be seized if a case can be made that these were bought with the proceeds earned in corrupt practices, according to the people close to the probe.
The nearly US$700 million being investigated falls under US jurisdiction as it was routed through US bank Wells Fargo.
Mr Najib has denied the graft allegations and his office told NYT earlier this year that he was not involved in the US properties tied to his stepson and to Mr Low.
The allegations and unanswered questions have muddied Mr Najib's global standing as he prepares to fly to London this week for a trade convention, and then on to New York for the opening of the United Nations General Assembly. Since taking office in 2009, he has promoted his country as a moderate Muslim partner in the fight against terrorism and a strategic Asian counterforce to China.
"Najib really, really values his international image, and he was going out of his way to curry favour with America and with the Europeans," said Mr John Malott, a US ambassador to Malaysia in the 1990s. In the current climate, "he can travel, but is he going to be shunned? Are people going to shake hands with him?"
NEW YORK TIMES