1MDB scandal: US Justice to recover a Picasso between stolen assets

US authorities on Thursday moved to seize another $540 million in assets allegedly stolen in the 1MDB fraud and used to fund extravagant spending, the Justice Department announced.

“Today’s complaints reveal another chapter of this multi-year, multi-billion-dollar fraud scheme, bringing the total identified stolen proceeds to $4.5 billion,” acting US Assistant Attorney-General Kenneth Blanco said in a statement.

And she underlined that "We simply will not allow the United States to be a place where corrupt individuals can expect to hide assets and lavishly spend money that should be used for the benefit of citizens of other nations”.

In court papers filed Thursday in Los Angeles, federal prosecutors said that in 2014, Malaysian businessman Jho Low stole $850 million from funds borrowed from a syndicate of banks, ostensibly to repay options on bonds issued in an earlier stage of the scheme.

Bloomberg News reported that some of the assets highlighted in the court papers were given away by the conspirators as gifts, including a collage by Basquiat and a painting by Picasso, both presented to "Wolf of Wall Street" star Leonardo DiCaprio.

Bloomberg quoted a spokesman for the actor as saying that he had already "initiated return" of the items, which he had accepted for a charity auction for his foundation.

The Justice Department in 2010 launched the "Kleptocracy Asset Recovery Initiative" to seize the ill-gotten gains of foreign officials which pass through the US financial system and where possible return them to the victims of fraud.

The move compounded court cases launched last year in which Washington sought to confiscate more than $1 billion allegedly embezzled by businessmen with political connections in Malaysia bringing the total amount US officials say was stolen to $4.5 billion.
The scandal has rocked the Malaysian governing class, exposing Prime Minister Najib Razak to allegations of corruption and of personally profiting from the alleged theft, which he has denied. 1MDB is a Malaysian sovereign wealth fund created in 2009.
The scandal has also spawned investigations in at least five countries including Singapore, Hong Kong and Switzerland.