NEW YORK • The celebratory dinner was at one of the city's most chic restaurants which offers a view down Central Park South to the Park Lane Hotel, a 47-storey tower. Mr Steven Witkoff, a New York developer, had just won the bidding for the Park Lane. It was, he thought, the best location in Manhattan to build a super tower with ultra-luxury apartments.
Dining with him that night in 2013 was Mr Low Taek Jho, widely called Jho Low, an extravagant Malaysian financier whose friends included heads of state, Wall Street bankers and celebrities.
Mr Low had agreed to finance 85 per cent of the US$654 million they were paying for the Park Lane. He had also provided the US$100 million non-refundable deposit that convinced the sellers to choose the Witkoff group over a rival bidder with a slightly higher offer.
But no work ever started on the planned new tower. Mr Low's fortune evaporated under scrutiny from the authorities in the US and abroad who say that his money was stolen from the Malaysian people.
Four years after the dinner, the first and last time Mr Witkoff and Mr Low socialised, Mr Witkoff and his remaining partners are being forced by the Justice Department to sell the building. A glossy marketing book is being sent to prospective bidders this week.
"This was the best site in New York City and maybe the world," Mr Witkoff said in an interview. "We designed what the entire partnership thought was a beautiful building. Little did we know we'd face circumstances like this."
The story of the Park Lane offers a window into high-stakes development in Manhattan, where in the past decade, a gusher of foreign capital, much of it difficult to trace to its original sources, has chased some of the most desirable real estate on earth.
Mr Low has disappeared, possibly holed up in a hotel in Shanghai. He sits at the centre of what the authorities are calling one of the biggest international money- laundering schemes ever.
According to the Justice Department, which initiated a civil forfeiture action last year, Mr Low - who had close ties to Malaysia's Prime Minister Najib Razak - and his associates conspired to illegally divert more than US$3.5 billion (S$4.8 billion) from a Malaysian development fund to acquire the Park Lane, a luxury hotel in Beverly Hills, condominiums in New York and expensive works of art.
Mr Low has denied any wrongdoing, as has Mr Najib and the development fund. The federal complaint contends that US$731 million from the fund, which was known as 1Malaysia Development Berhad (1MDB), was deposited into accounts belonging to an official identified as "Malaysian Official 1" .
Investigations are under way in the United States, Switzerland, Malaysia, Singapore and at least two other countries.
The Park Lane, built in 1971, was architecturally uninspiring but offered wide-angle views of Central Park. Developers at the time were turning 57th Street into a billionaires' row, with a half-dozen skyscrapers under construction.
Both Mr Witkoff and Mr Harry Macklowe, a long-time developer, lobbed unsolicited offers before the bidding started. A lawyer introduced Mr Witkoff to Mr Low.
Mr Najib had established 1MDB in 2009 to spur economic development. Mr Low emerged as an adviser and a key figure in the fund's global deal-making. The fraud and money laundering at 1MDB started almost immediately, said the federal complaint.
The case represents "the tip of the iceberg" when it comes to corruption and money laundering, said Ms Heather Lowe of Global Financial Integrity, a non-profit that focuses on illicit financing.
"There is so much money moving around the world every day," she said. "There is a need to focus on funds going into banks and high-value real estate and how that may be facilitating corruption and poverty around the world."
NYTIMES
