A $US30 million penthouse in London. Another one in New York. A $US40m mansion in Beverly Hills, with a gold pyramid in — yes, in — the pool, with just the tip showing. A $US250m superyacht with a helicopter landing pad, berthed for a time in Cairns. A rare pink diamond on an $US800,000 chain.
All this and more was bought in a three-year period by two young men from Malaysia, neither of whom had turned 35. Where did they get the money? If you’re thinking “fraud”, well, the US Department of Justice agrees with you. According to a 251-page document lodged with a New York district court this week, it believes that these two men — and many others just like them, in court cases still to come — used the purchase of penthouses, artworks, rare jewels and big boats to launder dirty money stolen from their countrymen. And now, using powers given to US investigators in the aftermath of the global financial crisis, the Department of Justice (it’s known as the DoJ, pronounced “dodge”) is coming for the spoils.
Who are these men, who deny all wrongdoing? One of them is the pink-faced, pudgy son of a Malaysian banker, known as Jho (pronounced Joe) Low. The other is his friend, Riza Aziz, whose mother is married to Malaysian Prime Minister Najib Razak. If the civil case against them is to be believed, both have a weakness for big toys and beautiful women.
Unlike many cases involving allegations of money laundering, this one is very easy to understand.
According to the court filing, in 2009, Malaysia’s new Prime Minister — who, by chance, also is the Finance Minister — decided to establish a Malaysia-wide investment fund, much like Australia’s Future Fund, supposedly for the benefit of all Malaysians. Instead, the DoJ says, in five years between 2009 and 2014 Razak’s stepson, Aziz, and his best friend, Jho Low, diverted $US4.5 billion from the fund for their personal benefit. Why is the DoJ on the case? It’s alleged money was laundered through US real estate and artworks handled by US-based based auction houses.
Malaysia’s Prime Minister himself has not been charged with wrongdoing, and both men say they are innocent.
The DoJ begs to differ: according to the document, Aziz and Jho Low began siphoning money from the fund almost immediately.
At first, they laundered it through real estate purchases and then, in 2011, they allegedly teamed up with an American partner, Joey McFarland, to create a company called Red Granite Pictures, with the aim of spending some of the newly clean cash, by making Hollywood movies. In the process, they hoped, they’d get to hang with beautiful women and Hollywood’s leading men.
Red Granite approached one of Hollywood’s most bankable stars, Leonardo DiCaprio, who at that point had been trying for six years to find somebody willing to front up the funds to make a film based on Jordan Belfort’s bestseller, The Wolf of Wall Street.
It’s no secret that DiCaprio hoped that a lead role in this film would deliver him the Oscar he’d missed out on not once but twice previously. Red Granite told DiCaprio it could fund the film, and DiCaprio soon became the partners’ buddy. A few months into the friendship, he attended an extraordinary party in Las Vegas to celebrate Jho Low’s birthday, where the champagne was $US25,000 a bottle.
A short time later, DiCaprio also was a guest at Red Granite’s million-dollar party to launch The Wolf of Wall Street in Cannes, attended by a rapping Kanye West.
Back in Los Angeles, DiCaprio introduced his new friends to an old friend who happened to own a company called Cinema Archives, which sold old movie posters and Hollywood memorabilia. Aziz and Jho Low, perhaps to curry favour with DiCaprio, began buying posters for him and for themselves. They also found and bought Marlon Brando’s long-lost Oscar for On The Waterfront, which they gave to DiCaprio for his birthday, as a kind of holding gift, until he could win his own.
Their generosity didn’t end there: in December 2012, Red Granite picked up the tab for DiCaprio and his Wolf stars to celebrate New Year’s Eve not once but twice: first in Australia, where they stayed long enough to party with topless girls on a yacht in Sydney Harbour; then in Las Vegas, where they partied with Paris Hilton. They also gave him a Monet valued at $US3m.
The investment paid off: The Wolf of Wall Street came out in December 2013 and, having cost just over $US100m to make, it made $US342m. But the DoJ says Malaysia got none of that money (also, for the record, DiCaprio got an Oscar nomination but not the statue. For that, he’d have to wait for the lead role in The Revenant, funded by his new best friend, Australian billionaire James Packer, and his business partners.)
But if Jho Low felt abandoned by DiCaprio, he didn’t show it, perhaps because he, too, had a new obsession. According to the court documents, Jho Low in 2014 finalised the purchase of a $US250m, 90m superyacht with a massage room, a sauna, a steam room and an “experiential shower”.
Australian model Miranda Kerr.
He also bought $US2m worth of pink diamond jewellery to give as a gift to a woman with whom the chubby Malaysian had developed an obsession: Australian supermodel Miranda Kerr. Jho Low ordered each piece carved with her initials: “MK” According to the DoJ, he also planned “a multi-day excursion aboard his new yacht” — it’s called Equanimity, which means “calmness, in a stressful situation” — in late July and early August 2014. “The excursion was planned at Low’s direction by a high-end concierge service,” the DoJ says, “and meticulous planning went into arranging the manner in which Low would present each piece of the matching diamond jewellery set to Kerr.” At the time Kerr was promoting her own brand of Swarovski jewellery collection (prices start at a more modest $US78 for a necklace.)
Neither Kerr nor DiCaprio is accused of wrongdoing, and Jho Low has yet to be charged with a crime; nothing is proven against anyone.
What may be alarming to the oligarchs and fraudsters who have laundered money in a manner similar to that outlined in the document is the fact some of the red flags were sent up not by whistleblowers but from nervous bankers who had to handle the transactions in a new regulatory climate. “This is something: how can you send hundreds of millions of dollars with documentation, you know, nine million here, twenty million there, no signatures on the bill … I mean it’s ridiculous!” said one in a email that is now before the New York judge.
The case is expected to come before the courts later this year. In the meantime, Kerr this week returned the jewels to the US government, while DiCaprio returned the Oscar and a Monet, plus some other gifts, and both have promised to co-operate fully.
The DoJ is not yet done with clawing back what it says was illegally gained: from Aziz and Jho Low it wants a private jet; a Time Warner penthouse; a van Gogh pen and ink drawing; a mansion in Beverly Hills; and plenty more, plus of course the profits from The Wolf of Wall Street, which may yet be returned to Malaysia, whose citizens likely have never seen the film. Somewhat ironically, the movie couldn’t be shown there because of morality laws.