1MDB Fraud Vehicles Now Being Used to Recover Stolen Money
(Bloomberg) -- Once conduits for hundreds of millions of dollars looted from 1MDB, a group of offshore entities are being repurposed to try to track down the Malaysian sovereign wealth fund's stolen money.
Three British Virgin Islands-based companies linked to 1MDB on Tuesday filed for Chapter 15 bankruptcy in Florida, utilizing the section of the U.S. code that allows foreign debtors to bring proceedings in the states. Their aim is to recover a portion of the $8.5 billion allegedly stolen from 1MDB, some of which may be in the U.S., the companies said.
The offshore entities were “part of the fraud perpetrated against 1 Malaysia Development Berhad,” they said in the filing, with some likely created solely to receive stolen funds or transfer them on to other entities. They are now being overseen by administrators appointed by the Malaysian government.
The Chapter 15 filing is designed to help the administrators gather information from those involved in the deals, and seize whatever assets they're able to locate.
Brooklyn Jury
The overseers for the funds “have identified various individuals and entities located in the United States who either participated or otherwise possess knowledge” related to the transactions at issue, according to court papers. “Some of the missing funds passed through U.S. entities, including investment managers, fund managers and other U.S. entities who provided services to the participants in the fraud.”
The move comes as a jury in Brooklyn, New York, decides the fate of former Goldman Sachs Group Inc. banker Roger Ng, who was accused of conspiring with his former boss, Tim Leissner, and Malaysian financier Jho Low to loot 1MDB. Leissner pleaded guilty and testified against Ng, while Low remains a fugitive.
The entities said U.S. Justice Department efforts to recover funds stolen in the scheme have seen some success, but they said they believed $1.15 billion stolen from 1MDB subsidiary SRC Malaysia, the parent of the funds behind Tuesday's filing, had fallen through the cracks.
“There are companies and trusts that are yet to be uncovered related to the fraud,” lawyers for the funds said in court papers.
The case is In re SRC Strategic Resources Ltd., 22-12656, U.S. Bankruptcy Court, Southern District of Florida (Miami).
©2022 Bloomberg L.P.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
-
Indians Are Travelling, But Not Every Journey Is A Holiday | The Week In Whys
Pilgrims, patients and working women are the real travellers, and the system hasn't quite caught up with them.
-
Getting To Work Costs Women More | The Reason Why
It is not just about women paying more than men. It is about women paying much more in cities than in villages.
-
AI Bias In Investing Cannot Be Eliminated, But It Can Be Governed
Framing is a particularly important example as identical financial information presented in terms of gains rather than losses can lead an LLM to reach a different assessment.
