The Hollywood studio behind The Wolf of Wall Street is in talks with the US Department of Justice to settle a lawsuit alleging the film was funded with money diverted from 1MDB, the Malaysian state investment fund mired in a multibillion-dollar embezzlement scandal.
The civil case against the movie, which starred Leonardo DiCaprio as crooked trader Jordan Belfort, is a component of the largest asset seizure the US has brought under an anti-kleptocracy initiative established in 2010.
Federal prosecutors and lawyers for Red Granite Pictures asked a California federal judge this week to extend a deadline in the lawsuit so they could “focus on their ongoing negotiations”.
“The parties have been actively discussing a potential settlement that would completely resolve this matter,” lawyers for both sides told the judge in Los Angeles in a joint statement, according to a court document.
The 1MDB case, in which US prosecutors are moving to seize $1bn in assets including profits from the 2013 Martin Scorsese film, is regarded as a test of US authorities’ willingness and ability to fight grand corruption.
Red Granite Pictures was co-founded by Riza Aziz, a stepson of Malaysian Prime Minister Najib Razak, who set up 1MDB in 2009.
In a statement last July, when the US civil claim was filed, Red Granite Pictures said: “To Red Granite’s knowledge, none of the funding it received four years ago was in any way illegitimate and there is nothing in today’s civil lawsuit claiming that Red Granite knew otherwise.”
The film is Mr Scorsese’s most successful at the box office, taking in $392m in worldwide ticket sales.
As well as alleging that The Wolf of Wall Street received illicit finance, US prosecutors allege that Mr Aziz used money diverted from 1MDB to buy properties in Beverly Hills, New York and London.
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In a previous court filing, lawyers for Mr Aziz described him as an “innocent owner” of the properties. He did not engage in a money-laundering transaction or any other offence, the lawyers said.
Mr Aziz is a friend of Jho Low, a Malaysian businessman who played no formal role at 1MDB but was deeply involved in its operations, according to US authorities. Mr Low received a “special thanks” credit at the end of The Wolf of Wall Street.
When Mr DiCaprio won a Golden Globe for his performance in the film, he thanked Mr Aziz and Mr Low, saying: “Thank you for not only being collaborators but taking a risk on this movie, truly.”
US prosecutors allege that Mr Low and his associates purchased assets including a Bombardier jet and the Viceroy L’Ermitage hotel in Beverly Hills as part of a conspiracy to launder funds stolen from 1MDB.
Mr Low has previously denied wrongdoing in relation to the financial scandal. Mr Low and his family have taken legal steps to contest the US asset seizure.
A spokesman for Red Granite Pictures declined to comment. The move to settle the case was first reported by The Hollywood Reporter.