NEW YORK (NYTIMES) - For sale: Boutique hotel, convenient to Hollywood. Rooftop pool, 116 rooms, jet-setting clientele.
Previous owner spent US$40 million (S$56 million) on renovations before becoming an international fugitive.
Asking price: more than US$100 million.
If that sounds like a steal - even in the middle of a global pandemic that has nearly ground travel to a halt - the Viceroy L'Ermitage Beverly Hills could be yours.
Just contact the United States government.
Prosecutors moved to seize the hotel, about 1.6km from Rodeo Drive, in 2016 as part of a long-running investigation into one of the biggest foreign bribery and kleptocracy cases in history: the looting of more than US$2.5 billion from a Malaysian sovereign wealth fund, 1Malaysia Development Berhad (1MDB).
The property was commandeered from Jho Low or Low Taek Jho, a financier turned fugitive whom the authorities in the US and Malaysia described as the architect of a brazen scheme that also ensnared a prime minister and one of Wall Street's most powerful banks, Goldman Sachs.
The stolen money was used to buy everything from paintings by Van Gogh and Monet to a custom-built yacht to a see-through grand piano.
Some of the cash helped finance the movie The Wolf Of Wall Street, which earned Leonardo DiCaprio a Golden Globe for his performance as stock-market scammer Jordan Belfort.
Now the hotel - the last of Low's marquee properties to be sold by federal authorities - is being auctioned off, with proceeds to be split between the governments of Malaysia and the US.
Viceroy, which operates the hotel, charges about US$600 a night on average for rooms it markets as a "home-away-from-home for Hollywood elite, international dignitaries and jet-setting luxury travellers."
Federal authorities in Los Angeles and Washington are hoping to sell it for well north of US$100 million in an auction this summer, according to people briefed on the matter.
"Luxury hotels in Beverly Hills don't often come up for sale," said Mr Michael M. Eidelman, a Chicago bankruptcy lawyer hired as the special master for the auction. "We have received inquiries from a number of different groups, and groups from a number of different countries."
TOURISM AND CORONAVIRUS
But how aggressive the bidding will be remains an open question, with the future of the tourism industry very much in doubt.
A resurgence of coronavirus infections is putting off - or reversing - reopening plans throughout the country, just as hotels were getting a chance to claw out of the hole opened up by lockdown orders.
Balance sheets are feeling the effects. A week ago, Blackstone Group, the big private equity firm, reported that it had missed a payment on a US$274 million loan to four hotels that were in financial trouble even before the pandemic.
In May, Tom Barrack's Colony Capital said it was in default on US$3.2 billion in debt for some 245 hotels in its portfolio.
Luxury properties have been hit particularly hard.
Fitch Ratings, the credit rating firm, estimates that occupancy levels at those hotels were under 9 per cent, partly because many have simply closed for now.
The industry overall has been running at around 40 per cent occupancy.
It could take a long time to get back to normal: STR, a hospitality industry data firm, said it did not expect occupancy to rise above pre-pandemic levels before 2023.
Federal authorities are not interested in waiting to wrap up the five-year investigation into 1MDB.
One of history's most complex kleptocracy cases, it toppled the government of former Malaysian prime minister Najib Razak and prompted a foreign bribery investigation of Goldman Sachs.
One former Goldman banker, Tim Leissner, has already pleaded guilty. He said he and others at the bank had conspired to circumvent internal controls to work with Low, paying bribes to officials in Malaysia in order to issue the bonds that raised money for the fund, which was intended to finance infrastructure projects in Malaysia.
Leissner, who is married to fashion designer and model Kimora Lee Simmons, agreed to forfeit up to US$43.7 million.
Goldman itself has been in talks with federal prosecutors. The bank lobbied the top brass at the Justice Department this year to let it reach a settlement without having to enter a guilty plea to a felony charge.
The bank and nearly two dozen employees have been charged with fraud in Malaysia as well, and Goldman has argued that any fine it pays to the federal government should take into account the penalties it could face overseas.
LOW BELIEVED TO BE IN CHINA
Low, who has never appeared in federal court to respond to fraud charges, has maintained that he did nothing wrong, according to his lawyers and representatives.
The forfeiture actions involving Low and his associates have moved on a separate track from the criminal investigation, led mainly by prosecutors in Los Angeles and Washington.
In all, federal authorities have seized assets worth as much as US$900 million, including Low's investment interests in the EMI music publishing portfolio, the Park Lane Hotel in New York, the production rights to three Hollywood movies and a luxury shopper's list of other assets.
In October, Low - who is believed to be living in China - and his associates gave up all claims to the seized property.
Some has already been sold: Low's stake in the EMI portfolio went to Sony for US$415 million in 2018, and his share of the Park Lane Hotel, which overlooks Central Park, was sold last year for US$139 million.
Federal prosecutors say that, so far, they have returned about US$500 million to the people of Malaysia from selling seized assets.
And they are still looking for more: Last Wednesday, the Justice Department said it was seeking the forfeiture of US$96 million in cash and property, including accounts in Luxembourg and Switzerland, real estate in Paris, and two paintings by Andy Warhol.
Malaysia is seizing and selling, too.
It collected an additional US$126 million from the sale of Low's superyacht, a 91m vessel with a helipad and 11 guest cabins.
The Malaysian government also confiscated tens of millions of dollars in cash, gold and jewelry from Najib, who is trying to make something of a political comeback even as he stands trial there on corruption charges.
Low acquired the Viceroy L'Ermitage for about US$40 million in 2010, and later spent the same amount on renovations.
The latest sale began in earnest last month with Mr Eidelman, the special master, and a broker soliciting so-called stalking horse bids, which set a minimum price to discourage frivolous buyers.
The auction is expected to be completed sometime this summer, and the government has the right to reject any prospective bidder after a background check.
The buyer will have the right to terminate the management contract of Viceroy, which also runs luxury hotels in several other US cities and Latin America. A spokesman for Viceroy declined to comment.
The sale of the L'Ermitage could be a signal of what awaits any other luxury properties that land on the auction block because of bankruptcy filings or foreclosures caused by the pandemic.