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As part of a massive asset seizure tied to what was allegedly stolen from Malaysia, the U.S. government is seeking the civil forfeiture of rights to the Oscar-nominated film, The Wolf of Wall Street, directed by Martin Scorsese.
Authorities have yet to charge any individuals with embezzlement, but in bringing a civil forfeiture case, federal authorities are targeting more than $1 billion in assets allegedly diverted by high-level officials at the country into a fund called 1Malaysia Development Berdhard (1MDB) and then into shell companies. Some of the money is said in a complaint filed in California federal court on Wednesday to have landed in Beverly Hills and New York City real estate, artwork by Van Gogh and Claude Monet, and a Bombardier jet, while some of the funds went into the entertainment business including productions funded by Red Granite Pictures, run by CEO Riza Aziz, the stepson of Malaysian prime minister Najib Razak.
The government now is looking to lay claim to these assets, which not only include rights, profits and royalties to The Wolf of Wall Street but also song publishing divisions of music giant EMI.
According to the complaint, about $100 million went into Red Granite, which has also produced Friends With Kids and Dumb and Dumber To and was previously flagged for using embezzled money in a since-settled civil lawsuit. Of that, tens of millions allegedly went into The Wolf of Wall Street, which tells a financial corruption story of its own by focusing on Jordan Belfort, who was convicted of stock market manipulation nearly two decades ago.
“These funds are directly traceable to the $700 million wire transfer and $330 million wire transfers unlawfully diverted from 1MDB to the Good Star Account,” states the complaint.
The feds are also tracing where the money went during the production of Wolf of Wall Street. For example, 17 payments totaling $3.9 million is described as going to Scorsese’s company Sikelia Productions. Another $48 million went to a company that managed payroll on the film. At least $4.1 million went to a special effects company, $2.5 million went to the Screen Actors Guild and approximately $80,000 went to a yacht charter company.
Although the film’s star Leonardo DiCaprio isn’t specifically mentioned, the complaint talks about “Hollywood Actor 1” who during his Golden Globe acceptance speech thanked “Joey, Riz and Jho,” referring to Red Granite principals Riza Aziz and Joey McFarland as well as Jho Low, a Malaysian financier and close associate of Aziz.
The complaint also talks about how Low withdrew more than a million dollars at the Venetian Casino in Las Vegas and gambled with Aziz, McFarland and the “lead actor” of Wolf of Wall Street, presumably DiCaprio.
The money was originally earmarked for 1MDB, which according to the U.S., “was ostensibly created to pursue investment and development projects for the economic benefit of Malaysia and its people,” before allegedly being diverted between 2009 and 2013. During this time, authorities say that public officials in Malaysia and their associates defrauded foreign banks and laundered money. It’s said that the criminal conduct happened in three stages — the first occurred when a billion dollars was sent into a Swiss bank account with allegedly false information provided about ownership; the second occurred through bond offerings arranged by Goldman Sachs and guaranteed by 1MDb and an investment fund owned by the government of Abu Dhabi; the third happened through diversion of money into a bank account in Singapore.
According to the complaint, it was Low who then laundered hundreds of millions of dollars into the United States. Low is accused of using this money to acquire a “substantial interest” in EMI Music Publishing Group besides substantial purchases of real estate and art.
As for Aziz, he was allegedly sent $238 million from the Swiss account, and nearly $100 million went to real estate and the funding of Red Granite (which has been subject to public scorn and shadowy hounding.) States the complaint, “The funds sent from Aabar-BVI to Red Granite Capital, which were thereafter transferred into the United States for use by Red Granite Pictures, did not represent a legitimate investment by 1MDB, IPIC, or Aabar in Red Granite Pictures.”
A California federal court will now hear any objections from parties asserting a valid claim to these assets and will ultimately make a determination whether the assets are traced to illicit sources.
At a press conference, U.S. Attorney General Loretta Lynch called this a “significant step to combat international corruption” and the “largest single action” ever brought by the Kleptocracy Asset Recovery Initiative.
She clarified that authorities will seek anything that Red Granite would receive going forward from its hit film, but didn’t believe it was possible to seize past royalties.
Leslie Caldwell, an assistant attorney general, added that “neither 1mdb or the Malaysian people saw one penny of profit” from Wolf of Wall Street, which was even banned from being shown in Malaysia. She said, “Instead, it went to the relative of corrupt officials.”
Update: Here’s the statement from Red Granite:
“To Red Granite’s knowledge, none of the funding it received four years ago was in any way illegitimate and there is nothing in today’s civil lawsuit claiming that Red Granite knew otherwise. Red Granite continues to cooperate fully with all inquiries and is confident that when the facts come out, it will be clear that Riza Aziz and Red Granite did nothing wrong. Red Granite does not expect the lawsuit — which is limited to future proceeds generated by a single film, and which was not filed against Red Granite or any of its employees — to impact its day to day operations, and the company continues to move forward with exciting new projects.”
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