A California federal judge paused several cases seeking to seize assets stolen from the sovereign investment fund 1Malaysia Development Bhd this week, saying the U.S. government’s argument that discovery posed a risk to its criminal investigation was compelling.
The U.S. government has filed civil seizure lawsuits to seize rare art, intellectual property, real estate and more controlled by the families accused of plundering 1Malaysia Development Berhad (1MDB) and companies linked to them.
Prosecutors have said they are still building criminal cases and have asked for discovery to be halted so they wouldn’t have to turn over information that could reveal their sources.
Lawyers for the asset owners protested, saying it wouldn’t be fair for the government to hold up discovery after trying to rush the cases along before they were ready to mount a defence. A U.S. District Judge disagreed, saying the scope and sensitivity of the case meant it was too risky to proceed with even a limited amount of discovery for at least six months, legal industry publication Law360 reports (subscription)
Trump Meets Najib
Earlier this week U.S. President Donald Trump welcomed Malaysian Prime Minister Najib Razak to the White House, praising his country for investing in the United States, while carefully steering clear of the American investigation into the long running Malaysian corruption scandal. The meeting was said to be brief and no press conference was held.
Last month’s request to stay the forfeiture cases came shortly after prosecutors filed a 249-page amended forfeiture complaint claiming 1MDB officials and co-conspirators started looting the fund soon after its inception in 2009.The complaint suggests the fraud was orchestrated by Malaysian financier Low Taek Jho, better known as Jho Low.
The Department of Justice is seeking to trace proceeds of the fraud to a wide array of purchases including properties in New York, London and Beverly Hills, a private jet, diamond jewelry; and artwork by Jean-Michel Basquiat, Pablo Picasso, Vincent van Gogh and others.
Low has said attempts to link him to guilty pleas in the 1MDB probes are based on «unfounded assumptions.» In previous interviews with «Euromoney» and the «South China Morning Post», Low has denied accusations of wrong-doing and insisted he was being made a scapegoat.
Previously seen on the social pages of glossy magazines, Low’s appearances more recent have been few and far between since the billion-dollar graft scandal surrounding 1MBD broke.