US agrees $1bn 1MDB recovery deal with Malaysian fugitive Jho Low

The 1MDB scandal which helped topple Malaysia's corruption-plagued former regimeMore

The 1MDB scandal which helped topple Malaysia's corruption-plagued former regimeMore

The US Justice Department said on Wednesday it has reached a settlement deal with financier Jho Low to recover nearly $1 billion that was misappropriated from Malaysian investment fund 1MDB. It's unclear whether it affects the criminal charges against Low in the US.

"A staggering amount of money embezzled from 1MDB at the expense of the people of Malaysia was laundered through the purchase of big-ticket assets in the USA and other nations", said United States Attorney Nick Hanna.

Since 2016, the Justice Department, in the biggest ever case in its anti-kleptocracy program, has filed civil lawsuits seeking to seize about $1.7 billion in assets allegedly bought with stolen 1MDB funds.

Combined with previous settlements covering a $120m superyacht, a NY hotel and other assets, it brings the total amount recovered by the United States to more than $1bn.

Jho Low, however, maintains that the agreement does not constitute an admission of guilt, liability or any form of wrongdoing by him or the asset owners.

Deputy Chief Woo S. Lee and Trial Attorneys Kyle R. Freeny, Joshua L. Sohn, Barbara Levy and Jonathan Baum of the Criminal Division's Money Laundering and Asset Recovery Section and Assistant US Attorneys John Kucera, Michael R. Sew Hoy and Steven R. Welk of the Central District of California are prosecuting the case.

The proposed settlement was filed in a California court on Wednesday and needs to be approved by a judge.

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"We were pleased to help negotiate this historic resolution in order to preserve the tremendous value of assets involved", Chris Christie, the former governor of New Jersey said in a statement. "Our strict anti-money laundering controls are effective, and we will seize assets used by criminals to hide ill-gotten gains".

The settlement with the US Department of Justice (DoJ) does not mean that fugitive businessman Low Taek Jho, better known as Jho Low, is free from any criminal charges.

Other legal cases related to the fund are still ongoing in the US, Malaysia and other jurisdictions. The two sides negotiated a deal to avoid the legal costs and uncertainty of extended litigation. It subsequently raised $6.5bn in bonds with the help of Goldman Sachs, much of which was allegedly stolen.

Malaysian government officials did not immediately respond to requests seeking comment on the settlement. A former senior executive at the firm has pleaded guilty to his role.

Several properties involved in the settlement have been sold, and proceeds are being held for restitution payments.

In a statement via his lawyers on the DOJ settlement this week, Low said the deal "fully and forever resolves in their entirety each of the United States government's civil, criminal, and administrative actions or proceedings relating to the defendant assets at issue in the Central District of California". The "agreement builds on a series of successful prior agreements negotiated withe the U.S. Department of Justice and is a result of good faith discussions", he said.

Money taken from 1MDB was also funneled into private-equity investments. The appreciation in the value of those stakes is likely to represent the largest chunk of the money to be recovered by the US government. Low is in hiding, believed by many to be in China. His original investment of just over US$100 million grew to more than US$415 million.

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