KUALA LUMPUR (REUTERS) - Nearly US$30 million (S$41.5 million) of funds stolen from scandal-hit 1Malaysia Development Berhad (1MDB) was used to buy jewellery for the prime minister's wife, including a rare 22-carat pink diamond set in a necklace, according to latest filings by the United States Justice Department in a civil lawsuit.
The filings lodged at the US District Court in Los Angeles on Thursday (June 15) did not identify Prime Minister Najib Razak or his wife Rosmah Mansor by name, but said the jewellery purchases were for the wife of "Malaysian Official 1".
Malaysian and US government sources have previously confirmed that "Malaysian Official 1" refers to Najib.
The diamond necklace set alone cost US$27.3 million, according to the latest filings in a lawsuit that was launched in July last year.
The accusations will provide further ammunition for Najib's political rivals, who often criticise his wife for lavish spending, and come at an awkward time for the Malaysian leader, as he had been expected to call a snap election later this year.
Rosmah's aide did not immediately respond to requests for comment.
The prime minister's office, in a statement early on Friday, said it was "concerned by the unnecessary and gratuitous naming of certain matters and individuals that are only relevant to domestic political manipulation and interference." Najib has consistently denied any wrongdoing.
A total of US$4.5 billion have been misappropriated from 1MDB, the Justice Department said on Thursday. The fund was set up by Najib in 2009 to promote economic development.
The department is seeking to seize a total of about US$1.7 billion in assets that were bought with misappropriated funds, including a Picasso painting that was given to actor Leonardo DiCaprio and the rights to two Hollywood films.
"This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people," acting US Assistant Attorney General Kenneth Blanco said in a statement.
The jewellery purchases were arranged by Malaysian financier Low Taek Jho, or Jho Low, who was also accused of gifting DiCaprio a US$3.2 million Picasso.
A spokesman for DiCaprio on Thursday said that the actor had begun proceedings to transfer ownership of the Picasso to the US government, having in July 2016 "initiated the return" of gifts he had received from financiers connected to the 1MDB case.
Low's, whose whereabouts are unknown, could not be reached for comment.
In an emailed statement through a representative, Low said the Justice Department's actions were "a further example of global overreach in pursuit of a deeply flawed case". "The US Department of Justice's latest move continues its inappropriate efforts to seize assets despite not having proven that any improprieties have occurred," the statement read.
Rasky Partners, a public relations firm that emailed his statement, could not be immediately reached by phone.
NAJIB'S BANK ACCOUNT
The lawsuits show the jewellery for Rosmah was bought with funds that passed through Najib's account. The jewellery, like the Picasso painting, was purchased with funds traceable to diverted proceeds from a 2013 bond offering by 1MDB, according to the filings.
The diamond necklace was bought in 2013, just months after US$680 million was transferred to the private bank account of Najib in Kuala Lumpur, the filings show. The Malaysian government says that money came from a member of the Saudi royal family.
The necklace was purchased from New York jeweller Lorraine Schwartz, who has designed for Beyonce Knowles, Jennifer Lopez and other stars of the entertainment world. "Need a 18 carrot (carat) pink heart diamond vivid or slightly short of vivid. On diamond necklace urgent," Low said in a text message to Schwartz in June 2013, the filings said.
A month later Schwartz showed the necklace in Monaco to a group of people, including Rosmah, onboard Topaz, one of the largest private yachts in the world.
Low had chartered the 147m yacht for seven days in early July 2013, according to the filings.
Rosmah and Low met with Schwartz again at a hotel in New York in September that year, when Najib was in New York to attend the UN General Assembly.
The necklace was eventually delivered to an unnamed friend of Rosmah's in 2014 in Hong Kong, who then handed it over to Rosmah in Kuala Lumpur, the filings said.
Low also arranged for the purchase of 27 pieces of jewellery - worth a total of US$1.3 million - for Rosmah in 2014.
The lawsuits also describe how Low spent about US$9 million in 2014 buying jewellery for Australian model Miranda Kerr.
Low bought a necklace with a 11.72 carat heart-shaped diamond for US$1.29 million, with Kerr's initials "MK" inscribed on the back. The necklace was given to Kerr as a Valentine's Day gift, according to the lawsuit.
Later that same year, Low bought a 8.88-carat pink heart diamond pendant worth US$4.8 million, also as a gift for Kerr.
Reuters was unable to immediately contact Kerr, who married Snapchat co-founder and CEO Evan Spiegel late last month.