LOS ANGELES • Family members of Malaysian financier Low Taek Jho were allowed to challenge the United States' attempts to confiscate hundreds of millions in real estate and other investments allegedly acquired with money siphoned from state investment fund 1Malaysia Development Berhad (1MDB).
A federal judge in Los Angeles this week granted requests by the holding companies that control the assets on behalf of Mr Low, widely called Jho Low, to file late claims in eight forfeiture lawsuits. The holding companies asked for permission to file claims after New Zealand and Cayman Islands courts let them swop out the Swiss trustees that had refused to fight the US allegations.
The assets at issue include a stake in New York's Park Lane Hotel, a US$107 million (S$149.8 million) interest in EMI Music Publishing, a US$35 million Bombardier jet and a US$30 million penthouse at Time Warner Centre in New York.
The US has asked for default judgments against some of the assets as no valid claims were filed in time. The Justice Department filed more than a dozen cases last year to recover over US$1 billion in real estate and other assets the US claims were bought by Mr Low and accomplices with money stolen from 1MDB.
The relatives, including Mr Low's brother and father, were previously denied permission to bring claims because, as trust beneficiaries rather than trustees, they have no legal standing to fight the allegations.
District Judge Dale Fischer rejected what she called the US' "rough justice" argument that the Low family could not have it "both ways" by shielding their assets in convoluted ownership structures and at the same time being allowed to pursue claims by replacing trustees who had failed to do their bidding.
"While the government's 'live by the complex ownership structure, die by the complex ownership structure' argument has a certain appeal, consideration of the relevant tests leads to the inevitable conclusion that the defaults should be lifted and the claimants should be allowed to file late claims," the judge said in a ruling on Tuesday.
Mr Low is friends with Malaysian Prime Minister Najib Razak's stepson Riza Aziz, a producer of The Wolf Of Wall Street, which the US alleges was funded with stolen money. Mr Low has said he provided consulting to 1MDB that did not break any laws, while the fund and Datuk Seri Najib have both denied wrongdoing.