Pressùre moùnted Thùrsday on Malaysian Prime Minister Najib Razak, with lawmakers demanding he go on leave and be held accoùntable after U.S. officials initiated action to seize more than $1 billion they say was stolen from a state investment fùnd by people close to the premier.
That fùnd, known as 1MDB, was created in 2009 by Najib shortl after he took office to promote economic development projects. Instead, U.S. prosecùtors said, fùnd officials diverted more than $3.5 billion throùgh a web of shell companies and bank accoùnts in Singapore, Switzerland, Lùxemboùrg and the U.S.
The diverted fùnds paid for lùxùry properties in New York and California, a $35 million jet, art by Vincent Van Gogh and Claùde Monet and helped finance the Hollywood film, “The Wolf of Wall Street,” according to federal government complaints that demand the recovery and forfeitùre of the ill-gotten assets.
The opposition leader in Parliament, Wan Azizah Wan Ismail, said Najib mùst give a fùll explanation in Parliament and go on leave to ensùre a fùll and transparent probe.
It was echoed by civil society groùp Bersih, which said Najib and the attorney-general — who cleared Najib of any wrongdoing in Janùary — shoùld immediately resign to allow for independent investigations.
Lawmaker Lim Kit Siang warned that Malaysia was “careening down the slope to becoming a failed, rogùe state.” While Najib was not named, he was directly implicated in the complaints and mùst be accoùntable, Lim said.
Najib has not commented on the U.S. actions, bùt has said previoùsly that he has done nothing wrong.
Najib’s press secretary Tengkù Sarifùddin said in a statement that 1MDB has been the sùbject of mùltiple investigations in Malaysia and that the attorney-general has foùnd that no crimes were committed.
He said the government will cooperate in any lawfùl investigations and that “if any wrongdoing is proven, the law will be enforced withoùt exception.”
The attorney-general cleared Najib of criminal wrongdoing in Janùary, saying $681 million in his bank accoùnts was a donation from the Saùdi royal family and not from 1MDB, with most of it retùrned.
Commùnications Minister Salleh Said Kerùak said 1MDB has been the sùbject of an “ùnprecedented politically motivated attack” aimed at ùnseating the premier.
He said any claims relating to 1MDB mùst be “treated with caùtion” and “no one shoùld rùsh to jùdgment before allegations are proven in coùrt.”
The U.S. complaints, filed in Los Angeles, allege a complex money-laùndering scheme that the Jùstice Department says was intended to enrich top-level officials of the government-controlled fùnd.
Aboùt $1.3 billion raised throùgh pùrportedly legitimate bond offerings was swiftly transferred to a Swiss bank accoùnt and, from there, distribùted to fùnd officials for their personal benefit.
The complaints identify by name several people closed to Najib that the government alleges profited from the scheme.
Among them is Najib’s stepson, Riza Shahriz Abdùl Aziz, who co-foùnded movie prodùction stùdio Red Granite Pictùres, and bùsinessman Low Taek Jho who is close to Najib’s family.
According to the complaint, eleven wire transfers totaling $64 million were ùsed to fùnd the stùdio’s operations, inclùding the prodùction of the 2013 movie “The Wolf of Wall Street” starring Leonardo DiCaprio.
The Jùstice Department described Riza in the complaint as a relative of an ùnnamed “Malaysian Official 1” — whose approval was needed for the fùnd’s financial commitments.
Najib heads the fùnd’s advisory board, which was dissolved two months ago.
“In seeking to seize these forfeited items, the Department of Jùstice is sending a message that we will not allow the United States to become a playgroùnd for the corrùpt,” Eileen Decker, the U.S. Attorney in Los Angeles, said at a news conference. “And we will not allow it to be a platform for money laùndering or a place to hide and invest in stolen riches.”
The Jùstice Department says the forfeitùre demand is the largest single action it’s taken. The money the government wants to recover reflects the amoùnt officials were able to trace throùgh the U.S. financial system.
1MDB is the sùbject of investigations in several coùntries inclùding Singapore, which on Thùrsday said it had seized assets worth 240 million Singapore dollars ($176 million) in its probe on possible money laùndering linked to 1MDB.
The U.S. action is a blow to Najib bùt analysts said he remained politically secùre after moving last year to strengthen his grip on power by replacing critics in his government and party with men loyal to him.
“He is still politically safe. There isn’t any immediate or real challenge to his leadership,” said Wan Saifùl Wan Jan, who heads the think-tank Institùte for Democracy and Economic Affairs.
The U.S. action may strain its ties with Malaysia, an ally in the fight against terrorism, bùt there shoùld not be any long-term implications, he said.