LOS ANGELES (BLOOMBERG) - Malaysian financier Low Taek Jho will probably be ordered to turn over his US$250 million (S$333.85 million) yacht to US officials, who claim he bought it with money siphoned from the 1Malaysia Development Bhd sovereign wealth fund.
A federal judge in Los Angeles said on Monday (May 14) that she will issue an order shortly on the Justice Department's request to get custody of the "Equanimity", which is currently in Indonesia.
US District Judge Dale Fischer initially ruled in April that the ship could be sailed to the US from Bali, but a court in Jakarta later found that the police hadn't followed proper procedures and ordered the yacht returned.
Judge Fischer wasn't persuaded by the argument that her ruling would override orders of a foreign court.
She said lawyers for Mr Low and the trusts that hold title to the 91-metre yacht may want get their "mandamus papers" ready, referring to their threat to appeal her ruling.
The boat was seized by Indonesian authorities in February at the request of the US.
The "Equanimity" is among more than US$1.5 billion in real estate and other assets that the US alleges Mr Low and his accomplices bought with stolen 1MDB funds.
Mr Jeremy Matz, a lawyer for the trusts that own the yacht for Mr Low's benefit, said after the hearing that his clients will comply with a final and binding court order to turn over the yacht. Mr Matz reiterated that he will appeal a ruling against his clients.
Newly elected Malaysian Prime Minister Mahathir Mohamad said on Saturday, three days after he secured a shocking win, that predecessor Najib Razak was barred from leaving the country.
Dr Mahathir also said he'd reopen a graft probe targeting the wealth fund and said he was replacing the attorney-general who cleared Mr Najib and instructed the auditor-general to declassify a 1MDB report that was protected by the Official Secrets Act.
Dr Mahathir, who was prime minister from 1981 to 2003 and defected to the opposition in order to stand as their candidate for premier, repeatedly called Mr Najib a "thief" on the campaign trail and pledged to revisit the 1MDB issue.
Mr Riza Aziz, a friend of Mr Low and one of the individuals the US alleges was involved in looting the 1MDB fund, is a stepson of Mr Najib.
His movie production company Red Granite Pictures agreed to pay US$60 million to settle a forfeiture lawsuit by the US, alleging he financed the Wolf of Wall Street with stolen money.
The US and Mr Low's lawyers are negotiating a sale of the "Equanimity" while the forfeiture lawsuit is unresolved, but are deeply divided on whether the transaction should take place in the US or in the Mediterranean, which the trusts argue is a superior market for "super yachts".