Although the US Department of Justice (DOJ) filed a 1MDB-related civil forfeiture suit, it later applied for a stay because it may have wanted to freeze the assets to facilitate an ongoing parallel criminal probe.
This was suggested by US attorney Thomas Goldstein, an experienced Supreme Court practitioner.
“I think that… what they (DOJ) wanted to do is make sure those assets were not dissipated so that they (the assets) can be held onto and returned if appropriate and if it was determined that they were related to 1MDB.
“There is a criminal process ongoing, it hasn’t produced anything yet, but they want the assets frozen so that it does not get sold or anything like that,” Goldstein said in a talk titled “Criminal litigation in the US” at Universiti Teknologi Mara in Shah Alam today.
“Once they grabbed hold of the assets, they were concerned that if they went all the way through the civil forfeiture process, they would have to disclose everything they knew about the potential criminal case.
“So, in the US, what happens sometimes is they get the assets then they put it on hold and they conduct the criminal investigation,” he added.
He was responding to a question posed by Gerakan Youth deputy chief Andy Yong, also a lawyer by profession.
Yong had questioned why the DOJ initiated the civil forfeiture proceedings against the 1MDB-linked assets even though the department was aware of a parallel criminal probe.
The DOJ has so far filed three civil forfeiture suits against assets allegedly purchased with money misappropriated from 1MDB, seeking to seize these assets.
However, on Aug 11, the department applied for a stay on the suits, saying that the proceedings would likely have an “adverse effect on the government’s ability to conduct the related criminal investigation.” A US court later granted the stay.
Goldstein, who formerly taught Supreme Court litigation at Harvard Law School and Stanford Law School, also said that the US government appears to be working to have the money returned to Malaysia.
‘DOJ’s goal is to return the money’
“I think that I see mentioned that their (DOJ) goal is, and I assume the government here is trying to collaborate with, is that if the money came from 1MDB, to have the money returned to Malaysia.
“I do not think the US government is trying to take this money and keep it for the US in any way, but rather they are trying to determine whether the money can somehow be traced back to 1MDB,” Goldstein said.
He also stressed that civil forfeiture suits are only targeted at assets and not individuals.
Until now, there has been no suggestion by the DOJ that US law has been violated by individuals in Malaysia or that the Malaysian government is involved, he said.
“The DOJ has only initiated a civil forfeiture action against the property, not against anyone.
“They have taken great care not to suggest anywhere in the civil forfeiture action that they are targeting any particular person involved in the government, whether it is the prime minister or anyone else involved in 1MDB,” he said.
Goldstein did concede, however, that a civil forfeiture is sometimes a prelude to a criminal case in the US system, but pointed out that this has not yet happened with 1MDB.
“There are no criminal charges, there are no criminal defendants, there are no criminal targets that have been announced,” he said.
However, he said, if a criminal case were to develop, then it would be a “classical criminal case,” where the government would have to bring the criminal case and prove it beyond reasonable doubt before a grand jury.
In the civil forfeiture suits, the DOJ mentioned a “Malaysian Official 1” (MO1) multiple times, which Minister in the Prime Minister’s Department Abdul Rahman Dahlan later revealed to be a reference to Prime Minister Najib Abdul Razak.
Najib has consistently denied using public funds for personal gain, and said accusations otherwise are attempts to topple the government.