LOS ANGELES – The Department of Justice has reached a settlement of its civil forfeiture cases against more than $49 million worth of assets acquired by Khadem al-Qubaisi using funds allegedly misappropriated from 1Malaysia Development Berhad (1MDB), Malaysia’s investment development fund, and laundered through financial institutions in several jurisdictions, including the United States, Switzerland, Singapore and Luxembourg.
The assets subject to the settlement agreement include the sale proceeds of high-end real estate acquired in Beverly Hills, as well as a luxury penthouse in New York City that al-Qubaisi allegedly acquired with funds traceable to misappropriated 1MDB monies.
With the conclusion of this settlement, together with the prior disposition of other related forfeiture cases, the United States will have recovered or assisted in the recovery of nearly $1.1 billion in assets associated with the 1MDB international money laundering and bribery scheme. This represents the largest civil forfeiture ever concluded by the Justice Department.
“This settlement is another milestone in the asset forfeiture cases related to the 1MDB money laundering scheme – cases that have already led to the recovery of well over $1 billion,” said United States Attorney Nick Hanna. “Funds stolen from the people of Malaysia were used to acquire high-end properties, including residences each worth tens of millions of dollars. The cases resolved today continue to demonstrate our commitment to protecting the integrity of American financial institutions and ensuring that corrupt players cannot use our nation to conceal stolen riches.”
“As alleged in the forfeiture complaints, Khadem al-Qubaisi and others laundered billions of dollars embezzled from 1MDB, a Malaysian investment fund. Instead of benefitting the people of Malaysia, as intended, these funds were used by the co-conspirators to finance lavish acquisitions of personal property, luxury real estate and business investments in the United States and elsewhere,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “This settlement agreement ensures that nearly $50 million in stolen funds will be recouped, and sends a clear signal that the Department of Justice is committed to tracing, seizing, and forfeiting criminal proceeds that are laundered through the U.S. financial system.”
Under the terms of the settlement, the Atlantic Property Trust, which oversees the assets at issue in these forfeiture actions, agreed to forfeit all assets subject to pending forfeiture complaints in which they have a potential interest. The trustee, who is the wife of al-Qubaisi, is also required to cooperate and assist the Justice Department in the orderly transfer, management and disposition of the relevant assets.
“As this case demonstrates, when it comes to corruption, the FBI’s reach is long and uncompromising,” said Assistant Director Calvin Shivers of the FBI’s Criminal Investigative Division. “Our extensive investigation into Khadem al-Qubaisi and his co-conspirators has directly led to the return of over $1 billion to the people of Malaysia. The FBI, through our International Corruption Squads, shows this same level of commitment in all our international corruption investigations. Let this stand as a message to anyone who may consider using United States markets for money laundering: you will not prosper and you will be investigated and brought to justice.”
“This settlement is another step in our ongoing effort to return the embezzled funds misappropriated from 1Malaysia Development Berhad to the people of Malaysia,” said Chief Don Fort of IRS Criminal Investigation. “While tens of millions of dollars were appropriately surrendered by al-Qubaisi’s family, the real win is the unprecedented international cooperation shown in this case that will have a lasting impact for the people in Malaysia now and well into the future.”
According to the civil forfeiture complaints, from 2009 through 2015, more than $4.5 billion in funds belonging to 1MDB were allegedly misappropriated by high-level officials of 1MDB and their associates, including al-Qubaisi, through a criminal conspiracy involving international money laundering and bribery. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.
The FBI’s International Corruption Squads in New York City and Los Angeles and IRS Criminal Investigation are investigating the case.
The case is being prosecuted by Assistant United States Attorneys John Kucera, Michael R. Sew Hoy and Steven R. Welk of the Asset Forfeiture Section, along with Deputy Chief Woo S. Lee and Trial Attorneys Barbara Levy, Joshua L. Sohn and Jonathan Baum of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) at the Department of Justice. The Criminal Division’s Office of International Affairs is providing substantial assistance.
The Justice Department appreciates the significant assistance provided by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.
The assets being forfeited subject to this settlement are in addition to the more than $1 billion in assets the United States previously forfeited in connection with the Department of Justice’s 1MDB investigation. Following the conclusion of today’s settlement, several civil forfeiture complaints arising out of the 1MDB criminal conspiracy remain pending against assets associated with other alleged co-conspirators.
A civil forfeiture complaint is merely an allegation that money or property was involved in or represents the proceeds of a crime. These allegations are not proven until a court awards judgment in favor of the United States.