US returns another US$300 million of recovered 1MDB funds to Malaysia

The government of former Malaysian Prime Minister Najib Razak set up the 1MDB fund in 2009.
The government of former Malaysian Prime Minister Najib Razak set up the 1MDB fund in 2009.PHOTO: AFP

WASHINGTON (REUTERS, THE STAR/ASIA NEWS NETWORK) - The US Department of Justice (DOJ) on Tuesday (April 14) said it has repatriated another US$300 million (S$424 million) to Malaysia in recovered money misappropriated from 1Malaysia Development Berhad, or 1MDB, the country's sovereign wealth fund.

The government of former Malaysian Prime Minister Najib Razak set up the 1MDB fund in 2009. The DOJ estimated US$4.5 billion was siphoned out of Malaysia by high-level fund officials and their associates between 2009 and 2014 in a scandal that has also embroiled Goldman Sachs Group Inc.

The funds were laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg.

The Justice Department last year said it had struck a deal with fugitive Malaysian financier Low Taek Jho, or Jho Low, to recover about US$1 billion from the sale of assets allegedly bought with misappropriated 1MDB funds. 

Low, whose whereabouts are unknown, has consistently denied wrongdoing and says the settlement did not constitute an admission of guilt.

Some of those funds have already been returned to Malaysia, though Reuters reported last month that the United States had delayed the return of the latest installment.

The funds were originally scheduled to be returned in February but were delayed first due to technical issues and then because of uncertainty over political upheaval in Kuala Lumpur.

The latest repatriation brings the total the United States has returned or assisted Malaysia in recovering to more than US$600 million, the DOJ said in a statement.

"The payment reflects the United States' continuing commitment to the Malaysian people to hunt down, seize, forfeit, and return assets that were acquired in connection with this brazen scheme," Assistant Attorney-General Brian Benczkowski of the agency's Criminal Division said in the statement.

Assets recovered included high-end real estate in Beverly Hills, New York and London and tens of millions of dollars in business investments made by Low, allegedly using funds traceable to misappropriated 1MDB money.

The Department of Justice's efforts to recover funds appropriated from Malaysia's 1MDB are continuing, the agency said.

Malaysian Prime Minister Muhyiddin Yassin thanked the US government, particularly the US Embassy in Kuala Lumpur, on their "excellent assistance and cooperation" in facilitating the return of the US$300 million.

"The US$300 milionl represents some of the assets which had been forfeited and later sold. It also includes proceeds from 1MDB-linked assets that were given up or forfeited by individuals linked to Jho Low.

"The government is pleased to share that so far, inclusive of this most recent tranche of US$300 million, a total of US$620million of 1MDB monies, in the form of sales of proceeds or assets, have been returned," he said in a statement.

He said the process to sell Low's remaining assets under the DoJ consent forfeiture judgement is ongoing.