Jho Low, a Malaysian businessman-turned-fugitive, has agreed to forfeit more than $700 million worth of assets that he and his family allegedly misappropriated from Malaysian’s sovereign-wealth fund, 1MDB, and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore, and Luxembourg.
Through the settlement, announced by the Department of Justice on Wednesday, together with the prior disposition of other related forfeiture cases, the United States will have recovered or assisted in the recovery of more than $1 billion in assets associated with the 1MDB scheme. It’s the largest recovery to date under the Department’s Kleptocracy Asset Recovery Initiative and the largest civil forfeiture ever concluded by the Justice Department.
Under the settlement’s terms, Low, his family members, and FFP (a Cayman Islands entity overseeing the assets at issue) agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest. From the assets formerly managed by FFP, the United States will release $15 million to Low’s counsel to pay for legal fees and costs, according to the DOJ. None of those fees may be returned to Low or his family members.
Low noted in a statement released a through a spokesman that the civil agreement was not an admission of guilt.
“We believe all parties consider this resolution, which is subject to final court approval, to be a successful and satisfactory result,” he said.
The assets subject to the settlement agreement, as laid out by the DOJ, include high-end real estate in Beverly Hills, New York, and London; a luxury boutique hotel in Beverly Hills; and tens of millions of dollars in business investments Low allegedly made with funds traceable to misappropriated 1MDB monies.
The United States previously obtained nearly $140 million in assets in connection with Low’s investment in a business entity related to the Park Lane Hotel in New York and a yacht valued at over $120 million that was seized by law enforcement authorities in Indonesia.
Low separately faces charges in the Eastern District of New York for conspiring to launder billions of dollars embezzled from 1MDB and for conspiring to violate the Foreign Corrupt Practices Act by paying bribes to various Malaysian and Emirati officials.
Charges in the District of Columbia include conspiring to make and conceal foreign and conduit campaign contributions during the United States presidential election in 2012.
Several civil forfeiture complaints arising out of the 1MDB criminal conspiracy remain pending against assets associated with other alleged co-conspirators.
As Compliance Week previously reported, the Justice Department on Nov. 1, 2018, unsealed a criminal information and guilty plea by Tim Leissner, a former participating managing director at Goldman Sachs, and an indictment against Jho, as well as Ng Chong Hwa, a former managing director also at Goldman Sachs. Leissner pleaded guilty to two criminal charges: conspiring to launder money and conspiring to violate the FCPA’s anti-bribery and internal accounting controls provisions.
Jho and Hwa were charged in a three-count indictment with conspiring to launder money and conspiring to violate the FCPA’s anti-bribery provisions. Ng was also charged in this indictment with conspiring to violate the FCPA’s internal accounting controls provisions. The charging documents stated, among other things, Leissner and Ng participated in a conspiracy to misappropriate proceeds of the 1MDB offerings for themselves and to pay bribes to various government officials to obtain and retain 1MDB business for the firm.
The plea and charging documents stated Leissner and Ng “knowingly and willfully” circumvented the firm’s system of internal FCPA and accounting controls, in part by repeatedly lying to control personnel and internal committees that reviewed these offerings.
Additionally, in a November 2018 quarterly filing, Goldman Sachs said it received subpoenas and requests for documents and information from various governmental and regulatory bodies and self-regulatory organizations as part of investigations and reviews relating to financing transactions and other matters involving 1MDB. “Subsidiaries of the firm acted as arrangers or purchasers of approximately $6.5 billion of debt securities of 1MDB,” the quarterly filing said. Goldman Sachs said it is cooperating with the Justice Department and all other governmental and regulatory investigations in the matter.