Malaysian financier Jho Low is alleged to be the mastermind behind the convoluted labyrinth of offshore vehicles involved in pilfering billions from 1MBD. Has he done too good a job at hiding the assets?
U.S. prosecutors allege that billions were pilfered from Malaysia’s 1MDB. Instead of financing the country’s development, prosecutors allege that millions were spent on luxury hotels like the Park Lane in New York, fine art by Vincent Van Gogh and Claude Monet, a recording catalogue and even financing for the Hollywood blockbuster «The Wolf of Wall Street».
The scandal has engulfed Swiss banks, many of whom acted as a pass-through in Singapore for money to move elsewhere, though the scandal has also reached Zurich itself.
The fate of hundreds millions in luxury assets is currently being duked out in a Los Angeles courtroom, where Jho Low and his family are trying to stop assets being seized by U.S. officials.
Only Himself to Blame
Now, the intricately-constructed spiderweb of money, accounts, assets and offshore havens could prove Low’s undoing, according to court filings reported by legal news outlet «Law360» (behind paywall) .
Low, who remains AWOL, and his family are to blame for the convoluted legal structures shielding the assets because they themselves designed a fortress-like structure for them, U.S. prosecutors said in legal briefs.
«Movant’s failure to file a timely claim is a direct result of the fact that Jho Low and his family strategically choose to cede control over the defendant property by creating an elaborate labyrinth of trusts and shell corporations,» U.S. prosecutors said.
Movant refers to Low and his family in this case, who filed the objection.
Low and family have asked the court to let them file their objections after a deadline, until they had deposed Rothschild Private Bank and Trust in Zurich as a trustee. Instead, they installed a Cayman Islands-based outfit which is likely to push back far harder on the U.S.’ demands.
The U.S. argued that allowing Low to file late is as good as encouraging criminals to use offshore entities to hide their assets.
The current court case isn’t to decide on the assets themselves; it is merely to decide whether Low and his family can actually file an objection to the seizure by the U.S. after they missed a court deadline to do so.