11:06am PT by Eriq Gardner
Justice Dept. Seizes Money from Red Granite Co-Founder Joey McFarland's Bank Accounts
The Department of Justice continues to hunt for money siphoned from a Malaysian sovereign wealth fund called 1 Malaysia Development Berhad, or 1MDB. On Friday, the government filed new forfeiture complaints targeting at least $38 million in funds. That includes tens of millions of dollars held in bank and escrow accounts traced to Joey McFarland, a co-founder of Wolf of Wall Street producer Red Granite Pictures.
The seizures add to the more than a billion dollars in previously targeted assets in what is already the largest action ever brought by the DOJ's Kleptocracy Asset Recovery Initiative. More than two years ago, in attempting to take action over the embezzlement of 1MDB funds, the DOJ went after Wolf of Wall Street profits, a mansion in Beverly Hills, apartments in London and New York and artwork gifted to actor Leonardo DiCaprio.
Red Granite settled the Wolf of Wall Street case with the government for $60 million, but its leaders are still dealing with the fallout from money that allegedly was siphoned off from the 1MDB fund with the help of mysterious Malaysian businessman Jho Low, who had strong links with Razak, Aziz, McFarland and DiCaprio.
Neither McFarland nor Aziz have been charged, but in November the government indicted Low, who is still at large.
Soon thereafter, the Justice Department seized $37 million from the bank account of ex-Fugees rapper Pras Michel that is alleged to have been part of an illicit lobbying effort by Low.
Michel is currently putting up a fight to recover the money.
In a court brief filed earlier this week, the Justice Department slammed arguments that the money in Michel's accounts was for legitimate media consulting purposes.
"If a party wished to launder millions of dollars into a U.S. bank for criminal purposes, it could simply earmark a trivial percentage of the money for some lawful purpose, tell the receiving bank that the money was for the lawful purpose and entirely omit the criminal purpose that the lion’s share of the money was going towards," stated a government brief. "The law cannot — and does not — allow these sorts of tactics."
In the latest complaint, the government traces millions of dollars diverted from 1MDB to produce the film, Daddy's Home and Dumb and Dumber To, and how Aziz and McFarland indirectly acquired equity in a facilities management company headquartered in Kentucky using The Wolf of Wall Street as collateral. McFarland is said to have then transferred distributions from this company into bank accounts as well as an escrow account held by the U.S. law firm, Squire Patton Boggs.
The development comes the same week the Supreme Court ruled that the U.S. Constitution places limits on the ability of authorities to seize private property used to commit crimes.