Kleptocracy At Its Worst

The United States has called the 1Malaysia Development Berhad (1MDB) scandal "kleptocracy at its worst". US Attorney General Jeff Sessions said in Washington on Monday (Dec 4) that the Department of Justice (DOJ) "is working to provide justice to the victims of this alleged scheme".

"In total, 1MDB officials allegedly laundered more than US$4.5 billion (S$6.1 billion) in funds through a complex web of opaque transactions and fraudulent shell companies with bank accounts in countries ranging from Switzerland and Singapore to Luxembourg and the United States. This is kleptocracy at its worst," he said at the Global Forum on Asset Recovery hosted by the US and United Kingdom.

1MDB's troubles made global headlines in 2015 when over US$700 million deposited via companies linked to the state investment fund was found in Datuk Seri Najib's personal bank accounts. The premier has insisted the money was a donation from Saudi royals, and has been cleared in Malaysia of any wrongdoing.

Meanwhile investigations have continued overseas, including the jailing of several bankers in Singapore. The Malaysian authorities have not brought anyone to court over the billions allegedly siphoned from 1MDB.

The ongoing DOJ probe into the state fund had in its documents referred to a "Malaysian Official 1" who was said to have received huge sums of money originating from 1MDB. While Mr Najib was not specifically named in the filings, a member of his Cabinet had confirmed that Mr Najib is "Malaysian Official 1".

Attorney General Sessions detailed in his speech how "1MDB was created by the Malaysian government to promote long-term economic development for the benefit of the Malaysian people". 

"But allegedly corrupt officials and their associates reportedly used the funds for a lavish spending spree: US$200 million for real estate in Southern California and New York. US$130 million in artwork. US$100 million in an American music label. Not to mention a US$265 million yacht," he said.