Somewhere off the Bahamas in early August 2014, one of the world’s best known super-models was presented with a fabulously expensive and specially commissioned set of diamonds – a matching 18k white gold diamond necklace, earings, bracelet and ring, designed by top jeweller Lorraine Schwartz and costing $1,980,000.

The presentation of the gift had been “meticulously planned” by her enthusiastic beau through a “high-end concierge servce” on board the brand new super-yacht, which he had just taken delivery of, according to a 251 page court document issued yesterday by the US Department of Justice.

The super-model was the Australian Miranda Kerr, famous for her own popular Swarovski jewellery collection (prices starting rather less exotically at $69); her pudgy admirer was the Malaysian super-thief Jho Low and the super-yacht was the $250 million, 300 foot Equanimity:

The gift to Miranda was engraved in her own initials and appears to have been accepted, because it was just one of a series of similar presentations made to her by Jho Low that year, all of which were carved with her own initials “MK”.

These had included a “11.72 carat heart-shaped diamond” necklace “including multiple chains” worth $1,815,520 and presented to Kerr on Valentine’s Day; an 8.8-carat pink diamond heart-shaped pendant costing $3,800,000 and two 5-carat “internally-flawless, pear-shaped diamond earrings” bought in October for just over a million dollars.

Miranda Kerr advertising her relatively down-market Swarovski range

However, the world famous smirk may now be lifted from the model’s lips, because the DOJ is issuing seizures against all those gems and the super-yacht itself, owing to the fact they were all illegally purchased with money stolen by Jho Low from the Malaysian people via the Prime Minister’s pet ‘development fund’ 1MDB.

What everybody is wondering is when will the charges follow against her lavish admirer?

Leo DiCaprio to hand back a lot more than that Oscar

Miranda is not the only super-star to be left mortally embarrassed by the up-shots from Jho Low’s antics along with those of his boss, the now equally shamed and ridiculous-looking PM Najib Razak.

On the very same day as this, the third 1MDB seizure notice, was issued by the DOJ, actor Leo DiCaprio had announced he was belatedly handing over to the authorities a vintage Oscar statuete, which had also been gifted by Jho Low together with Najib’s son Riza Aziz as a birthday present . Originally stolen from Marlon Brando, Jho Low and Riza Aziz had paid $600,000 for it.

However, this was merely the beginning of Leo’s woes.  The star had up till this point not been directly named by the DOJ – he was earlier referred to merely as Hollywood Actor 1.  But, hours after his plainly reluctant gesture over the statuette (Sarawak Report has chided him for years for accepting 1MDB tainted gifts and entertainment) the court papers demanded he give up a whole lot more wildly expensive gifts, which the FBI had proved were all funded by stolen money.

Leo clutching (finally) his own Oscar won last year

Leo was not only named for receiving entertainment in Las Vegas gambling dens as a guest of Riza Aziz and Jho, courtesy of money stolen from 1MDB, but the DOJ also listed a string of valuable gifts, which he appeared to have orchestrated for himself, including a Picasso painting and movie poster memorabilia.

Says the deposition:

Further strike against Red Granite

Riza and McFarland

ven more injuriously, the DOJ has repaid Riza’s production company Red Granite’s attempts to fight off confiscation of their profits from Wolf of Wall Street with an order to snatch the proceeds of even more of their films, which they say were financed by taking money from 1MDB.

These include the Jim Carey hit Dumb and Dumber 2 and Daddy’s Home.

McFarland, Riza’s ‘co-producer’ at Red Granite Pictures, is another person whose reputation is sullied by his involvement with the thieves from 1MDB (whom he had described as “family” on Instagram), again despite years of warnings from Sarawak Report.

He fancies himself as an art lover and became involved in laundering through the art market with Jho Low.  Aslo, together with Riza he embarked on an orgy of memorabilia purchases through Cinema Archives, all of it using money stolen from 1MDB.  According to the DOJ:

Meanwhile, Low organised for purchases for DiCaprio, including in January 2014 a “$3,280,000 painting entitled “Nature Morte au Crane de Taureau” by Pablo Picasso”. According to the DOJ the money was stolen from the bond issues by 1MDB. The painting was gifted to DiCaprio with a hand-written note in the name of Low’s proxy/alias Eric Tan “Dear Leonardo DiCaprio, Happy belated Birthday! This gift is for you”.  

DiCaprio accepted it, but now the DOJ are demanding it back along with a photograph gifted in November 2013, entitled “Boy with the Toy Hand Grenade” by Diane Arbus, purchased from Cinema Archives in New Jersey for $750,000 using money diverted from the 1MDB fund.  Also a Jean-Michel  Basquiat oil painting, “a collage entitled “Redman One” purchased for $9,191,040 from the Helly Nahmad Gallery in New York, using diverted proceeds of the 2013 bond sale:

Sarawak Report has already further detailed how Jho Low donated at least one further serious item of artwork a Lichtenstein sculpture to Leo DiCaprio’s charity at an auction in 2015.

Meanwhile, Joey MacFarland has also himself acquired numerous expensive pieces, thanks to his role as art expert assisting Jho in the of laundering 1MDB money.  During 2013-15  McFarland attended auctions with Jho on several occasions, helping him bid for items on behalf of the company supposedly owned by his proxy Eric Tan, Tanore.

These were then allegedly paid for by Eric Tan, using 1MDB money, says the DOJ, and then gifted back to Jho – a classic money-launder’s trick to conceal ownership.

McFarland also received some of these “gifts”:

Rosmah’s diamonds – Over $200 million spent on gems

Altogether $200 million was spent on jewellery from 1MDB

All these conspirators and collaborators, as they are variously termed by the DOJ, benefitteed to the tune of millions from their association with Jho Low, Riza Aziz and 1MDB.  But, no one to the extent of Rosmah Mansor. The expense of the gifts provided for her dwarfs the money spent on the likes of Jho’s Mum, sister (both beneficiaries) and even Miranda Kerr.

After the 2013 election, the complaint confirms, the remaining money in Najib’s (‘Malaysian Official 1″) account, $620 million was passed back to Tanore, where it was then spent by Jho/’Eric Tan’.  It was from this money that a $27.3 million necklace was bought for Rosmah:

Shortly after the election, June 2nd, the deposition relates, Jho texted  Schwartz: “Need a 18 carrot pink heart diamond vivid or slightly short of vivid. On diamond necklace urgent.”  Later in July 2013 Schwartz was invited to join Low and Rosmah on Khadem Al Qubaisi’s super-yacht Topaz off Monaco to show the stone:

The finished product was presented to the “VVIP client” in September when Rosmah visited New York.  It was just the start, explains the DOJ as it carries on describing the money trail through which such purchases were arranged:

The next major haul for Rosmah was arranged the following Christmas, when Rosmah visited her son in Hollywood, running up a massive quarter of a million dollar bill (paid for by Red Granite) at the Bel-Air Hotel, according to sources who spoke to Sarawak Report.

During this stay Schwartz was again flown over to show pieces to the PM’s wife.  She chose no fewer than 27 different 18-carat gold necklaces and bracelets at a total cost of  $1,300,000:

The DOJ lists the purchases by Rosmah on this occasion

Total cost $1.3 million

PetroSaudi and Tarek Obaid in the frame

For months PM Najib Razak and his collaborators have attempted to play down the DOJ action and pretend the allegations weren’t true, it wasn’t him or later that the accession of President Trump would get him off the hook.

However, yesterday’s further court filing shows such claims to have been nonsense. The DOJ has expanded its original 136 page document to 251 even more closely detailed pages showing the exact money trails for the billions stolen from 1MDB.

It has added a further half billion dollars in assets to the previous one billion it originally seized in July last year, including all the items listed above.

And for the first time the action has ponted directly to Rosmah Mansor as a major beneficiary as well as her husband, who is himself even more clearly identified as the major recipient of the money stolen through Tanore into the AmBank Account, which the DOJ describes as the “AMPRIVATE BANKING-MR Account” in KL, although it was falsely described to Falcon Bank as belonging to SRC International at the time of the transfer of the $681 million in March 2013.

The DOJ acknowledges that Najib’s specially appointed new Attorney General had in January 2016 “ultimately characterized the payment of $681 million as a personal donation to MALAYSIAN OFFICIAL 1 [the DOJ’s term for Najib] from the Saudi royal family which was given to him without any consideration”.

However, says the US Justice Department, AG Apandi was wrong to say so:

The deposition carries on to corroborate Sarawak Report’s earlier reports that the original 1MDB scam was hatched aboard the Tatoosh yacht off Monaco in 2009 in the presence of Najib, Rosmah, Jho Low and the shareholders of the original ‘joint venture partner’ the shareholders of PetroSaudi.

For the first time the DOJ has expanded its scope to naming the CEO of PetroSaudi, Tarek Obaid and referring to its “British Chief Investment Officer” Patrick Mahony and to issuing a seizure notice against an investment made by Obaid using 1MDB money.  This investment consisted of $2 million of shares in the major data processing company Palantir made by Obaid, says the DOJ, with stolen money.

The DOJ filing several times also makes clear that Obaid deliberately collaborated with Jho Low and deceitful 1MDB officials in misrepresenting the nature of various deals to different banks, in particular by representing PetroSaudi as the owner of the company Good Star, which received the bulk of the $1.83 million 1MDB “invested” in the so-called 1MDB PetroSaudi joint venture.

For these services the DOJ confirms what Sarawak Report had earlier reported, which was that Jho Low through Good Star paid Obaid $85 million and then later a further $60 million, pretending to banks that these were Investment Management agreements.

The deposition confirms that the DOJ believes the role of PetroSaudi to have been deliberately fraudulent throughout the management of 1MDB, hence the seizure notice for the Palantir shares.  Sarawak Report has noted numerous other acquisitions in businesses and property made by Obaid and Mahony through monies gained through their fraudulent association with 1MDB  in the UK and Switzerland.

The action now taken against these figures in the US represents a major step forward in holding them to account for their much larger acquisitions and criminal actions through on-going European investigations.

Indeed, Sarawak Report has learnt that Patrick Mahony was detained and subpeoenaed on his last visit to the United States and that Tarek Obaid was detained and held in custody for some days during his last visit to China. Saudi Arabia has moreover resisted extending the passport of Obaid’s brother and business associate Karim Obaid. Further moves are expected soon.

Baseless allegations?

Whereas Prime Minister Najib and his handful of vocal supporters have issued just a few half-baked denials and conflicting explanations for the huge sums of money that have passed through his and his family’s accounts the DOJ’s latest court document expands in excruciating and documented detail over 251 pages exactly how he orchestrated the theft of billions of dollars from 1MDB through Jho Low – and how much of it ended up in his own bank account, around the neck of his wife and in properties and businesses for his step-son and his associates.

Painstakingly compiled over a year and a half of investigation, the DOJ has brought to bear bank transfer and company documentation; interviews with executives and officals, as well as information from letters, emails, texts and phone conversations, all dated and corroborated, to demonstrate exactly how Jho Low stole the money and where it went.

By contrast, Najib and his officials have over the past year refused to investigate the matter, denying all wrong-doing and come out with as little as possible in the way of  unsubstantiated explanations for money that arrived in Najib’s accounts.  This bluff and guff has been used to desmiss two years of dedicated and detailed reporting by Sarawak Report and other journalists as “baseless lies” and “politically motivated slander”.

An arrest warrant has been issued by Malaysian authorities against the Editor of Sarawak Report, which has been also been banned for over a year – just on Wednesday Malaysia’s Chief of Police again dismissed Sarawak Report as having ‘no evidence’ for its slew of allegations relating to 1MDB and he threatened the Editor to come to KL and ‘try to prove’ those allegations,  whilst refusing to offer ‘safe passage’ in the process.

Malaysians are now free to make a choice as to who they wish to believe and what to treat as ‘fake news’.

There is the detailed body of reporting by Sarawak Report, The Edge, The WSJ and other established international news organisations, which has now been backed and corroborated by the forensic detail obtained from banks and other official sources laid out by the United States Department of Justice, or there are the various belated and reluctant statements which have been wrung out of Najib and his allies, backed by no evidence whatsoever.

The one credble investigation and report produced in Malaysia was that of the Auditor General, which was unconstitutionally declared an ‘Official Secret” by Najib last year. However, Sarawak Report obtained and published it and the DOJ has extensively quoted from it also in their own court filing.  The detail from the AG’s report (he has now been replaced by an unqualified crony of Najib) entirely supports the evidence of the DOJ.

“Options Buy-Back Phase” confirms suspicions of “Round-tripping” cover-ups by 1MDB

Sarawak Report will return to the further detail of the money trails revealed by the DOJ in future articles.

However, this third court deposition covers one major new area of investigation by the FBI’s financial investigation team, which is described as a ‘4th Phase’ to the 1MDB financial scam, in addition to the already detailed ‘Good Star Phase’, ‘Power Purchase/Aabar Phase’ and ‘Tanore Phase’.

They have labelled it “The Options Buy-Back Phase”, a final period of illegal activity that was mainly concerned with attempts to recycle borrowed funds time and again through 1MDB accounts in an attempt to cover up the previous thefts of billions from the fund.

Jho Low and his collaborators in 1MDB management had repeatedly siphoned money out of 1MDB’s various bond issues by pretending to be obliged to make payments to settle various ‘guarantees’ and ‘options agreements’ with their business partners at the Abu Dhabi sovereign fund Aabar/IPIC, whose Chair and CEO have been established as leading co-conspirators.

To some parties these payments were described as ‘refundable deposits’ (eg to auditors, who were required to treat the payments as assets on the books), whereas to others (e.g. banks) they were described as non-refundable one-off payments to be used by the recipients as they wished.  The money was sent to bogus off-shore companies posing as subsidiaries of Aabar and then forwarded on to various bank accounts controlled by Low, usually in the name of further bogus off-shore companies with names that appeared to link them to other major concerns, such as the Blackstone and Blackrock funds.

The DOJ also establishes what critics have long pointed to and suspected, which is that another off-shore fund linked to 1MDB, the so-called Bridge Global Fund based in the Caymen Islands, was also entirely bogus.  Bridge Global was alleged to have absorbed the investment of supposed capital and profits retreived from the initial 1MDB joint venture with PetroSaudi, boasted to total $2.3 billion.  In fact, as SR and others have pointed out all the money was stolen well before the setting up of Bridge Global in 2012.

The DOJ confirms that theft and the suspicions that the supposed investment in Bridge Global was in fact virtually worthless. Their investigators detail a series of “fraudulent” manoeuvres designed to disguise the fact that the worth of the fund had been exponentially inflated, assisted by valuations carried out in return for bribes by employees of the Singapore firm NRA Capital.

The 1MDB ‘investment’ into Bridge Global was supposedly the claimed $2.3 billion proceeds allegedly gained from selling its joint venture interest in PetroSaudi, which amounted to that company’s single investment in two drill ships now operating in Venezuela under the subsidiary PSOIL.  Contrary to earlier claims made to 1MDB’s Board, PetroSaudi had no other major assets.

However, PSOIL’s drill ships were valued at less than $100 million, say the DOJ investigators and the company in 2012 had itself registered losses of over $110 million – 40% of that amounted to nothing near $2.3 billion.  Therefore, it is of little surprise that the managers of Bridge Global (who were collaborators linked to BSI bank and Jho Low’s relationship managers Yak Yew Chee and Yeo Jiawei) re-invested their non-existent profits in none other than ‘units’ in PSOIL.

This was a heavily guarded secret, explains the court filing, which explains that the 1MDB Brazen Sky company, which was supposed to hold the units, was advertised as containing cash and then convertible units.  In fact, by 2014 the units in Brazen Sky represented only the value of the two drill ships owned by PetroSaudi, says the DOJ filing, one of which was already so clapped out that it had been decommissioned and the other was at the centre of a major dispute with the Venezuelan Government and had been standing idle for several months.

So, when demands were made for that investment to be redeemed from Bridge Global, prior to a planned floatation of 1MDB, which Najib and Jho Low hoped would cover all the losses, Jho Low and his co-conspirators embarked on an elaborate ploy to borrow money from Deutsche Bank and circle it through the Brazen Sky account to make it look as if the money had indeed been recovered and then used up.

1MDB borrowed the money from Deutsche Bank in two tranches in 2014 of $250 million in May and $975 million in September (total $1.2 billion). The DOJ details how Low immediately used $142,000 of the May loan to finish off the remaining payments due on his yacht, covertly diverting the money through a secretive series of misleadingly named off-shore companies named Affinity Equity and Alfa Synergy.

The rest of the money was recycled through Brazen Sky to make it look as though this was money being redeemed from Bridge Global fund in the Caymans.

Jho Low and 1MDB’s scheme entailed telling Deutsche Bank that the borrowing was to pay  Aabar/IPIC for options and guarantees totalling $1.2 billion, which were non-refundable. In fact, that money was diverted into yet another fake Aabar subsidiary in the Seychelles, which he and his collaborators also controlled.

From there the money was sent to a specially constructed ‘fiduciary fund’ called Lambasa Global Opportunity Fund, based in Barbados and supposedly the vehicle invested in by the Bridge Global fund managers. In fact it was just one of many such ‘fiduciary funds’, which Jho Low used to transfer money and disguise its origin.

From Lambasa Global Opportunity the money went to Bridge Global itself and then to 1MDB’s Brazen Sky, posing as money ‘redeemed’ from the Cayman Island fund investment.

1MDB’s Round-tripping cover up – Diagram provided by the DOJ

This ‘redeemed’ money (which had actually been borrowed from Deutsche Bank for an entirely separate stated purpose) was then forwarded internally to the 1MDB Global account, whose management then claimed to the company’s auditors they used it to pay off the very same options that the Deutsche Bank loan was supposed to pay off.  They did that ‘paying off’ by sending the money back to the same bogus Aabar Seychelles account, which did not of course actually belong to Aabar/IPIC.

According to the DOJ 1MDB managers then performed the same ’round-tripping’ exercise with exactly the same money six times in late 2014, producing figures that told 1MDB’s accountants that $1.5 billion had been redeemed but then spent on repayments, whilst at the same time 1MDB confirmed to Deutsche Bank that the $1.2 bn loan had also been spent on settling the Options and guarantees.

The carefully constructed deception therefore meant telling one thing to the bank and another to the accountant, says the DOJ, such was the deliberate and fraudulent conniving of officials from 1MDB.  It got worse. The same 1MDB officials, orchestrated by Jho Low, even forged company bank statements to maintain their deception.  The executive responsible is described as 1MDB Official 4, a new player introduced by the DOJ and who is apparently the 1MDB Executive Director of Finance, Terence Geh.

The forgery was prompted by a complaint from Deutsche Bank, who pointed out their loan agreement was that there would be no spending from the Brazen Sky account without the bank’s permission, as its supposed value was being used as collateral for the loan.

The bank had discovered from the 1MDB official audit that money had been allegedly redeemed from the Caymans into Brazen Sky (as described above) and then ‘used up to cover payments’.  Deutsche Bank therefore demanded reassurance of the value of the Brazen Sky account, which 1MDB staff claimed still held the ‘balance’ of the $2.3 billion allegedly now redeemed from the Caymans – amounting to some $900 million plus in cash.

Towards the end of 2014 the bank said it wanted to see the figures. At first, the DOJ relates, 1MDB officials stalled and said that their computer servers had crashed and they had lost all their financial records!  At the time Sarawak Report reported its own tip-off that 1MDB were indeed claiming their computers had been hacked and recalled all company computers so they could be wiped.

Then 1MDB Officer 4 produced BSI bank statements for Deutsche Bank to review. There was a November statement and then a later one.  It is this document that 1MDB Offcier 4 fraudulently altered in an act of forgery, according to the DOJ, in order to deceive the bank that there was indeed around a billion in cash in the Brazen Sky account.

In March 2015 it was Sarawak Report that again broke the news that Singapore regulators had confirmed to Bank Negara officials that a forged bank statement had been presented – and it was this damning discovery which had effectively triggered the entire global investigation into what has become the world’s biggest kleptocracy case.

Ironically, it is BN politicians and 1MDB officials who have, time and again, accused Sarawak Report of forgery and tampering, when it is in fact they themeselves who have thus been caught red-handed in the act.

Incompetent and Inept

It is also ironic that this team of mega-fraudsters, who managed to con top banks, fool endless accountants, buy major artworks, borrow from top auction houses and strut round the pinnacle of social circles, very nearly got away with it and yet were, in fact, complete bumbling amateurs and laughably inept.

The DOJ again relates several of the ludicrous excuses and comical letters written by Jho Low and his colleagues to persuade banks and auction houses to accept their vast injections of cash.  Equally ridiculous, surely, have been Najib’s nonsense and incomplete excuses about Saudi Royals?

The sheer brass necked, bumbling and repeated unbelievable incompetence of Low and his colleagues was summed up in communications by the Swiss CEO of Falcon Bank, Eduardo Leemann, who expressed his utter exasperation to Jho Low at the time his bank was being asked to pass through the enormous $681 million payments made through the Tanore account to Najib himself just before the election.

First, in a recorded phone conversation to his Board Chairman Mohamed Al Husseiny (a conspirator of Jho’s who was pushing for the payment) Leemann said:

The DOJ then quotes a second conversation, this time between Leemann directly with Jho Low.  Again the anxious banker (who later denied any wrong doing and claimed he retired)  does not mince his words:

Nevertheless, Falcon did indeed go ahead and process the transaction, says the DOJ and until Sarawak Report together with critics such as Tony Pua started to call everyone’s bluff they were getting away with it as were all the other big businesses, which had swallowed their doubts in order to do business with Jho Low, 1MDB and Malaysia’s Offial Number One.

In late 2014, according to the Minister of Finance’s plans, 1MDB was getting ready to launch a floatation, which would have brought billions of dollars from Malaysian government-controlled companies gushing into the company with the blatant intention of washing away all these dirty doings.  Once again, the unwitting Malaysian tax payer would have financed one of the greatest thefts that the world has ever known and the world’s biggest kleptocracy case.

Najib Razak and his cheerleaders are now blaming Sarawak Report and alleged ‘opposition conspirators’ for spiking that floatation and for ‘making up lies’ about 1MDB and forging documents.  It is now for Malaysians to decide, based on the evidence they see before the, what is the truth and who is making ‘fake news’.

Source: Sarawak Report