'Wolf of Wall Street' in Malaysia finance scandal
July 21, 2016
The small Hollywood studio behind Martin Scorsese's "The Wolf of Wall Street" (2013) was accused on Wednesday of taking part in a money laundering scheme by an investment and development company called 1MDB.
The investment fund at the center of the scandal is owned by the government of Malaysia, whose Prime Minister Najib Razak has been implicated in the scandal involving large sums of money. The 1MDB state investment fund was established in 2009 in part as an effort to build up financial infrastructure in Kuala Lumpur.
But according to the lawsuits, funds from 1MDB were diverted to the co-founder of Petrosaudi, which had a joint venture with 1MDB, and then on to a high-ranking figure in the Malaysian government, known only as "Malaysian Official One." Prosecutors accuse these individuals of misappropriating the funds for private gain.
Razak, who established the fund in an effort to promote economic investment, is the step-father of Riza Aziz, the co-founder of Red Granite Pictures, which came up with the more than $100 million (91 million euros) needed to finance the film.
Red Granite denies claims
US actor Leonardo DiCaprio won a Golden Globe for his portrayal of real-life convicted stockbroker Jordan Belfort. Nominated for five Academy Awards, the film made some $400 million at worldwide box offices.
Assistant Attorney General Leslie Caldwell told reporters on Wednesday that all assets and rights to the movie would be seized as they stem from laundered money.
"Neither 1MDB nor the Malaysian people saw a penny of profit from that film nor from the other assets purchased with funds siphoned from 1MDB," Caldwell said. "Instead, that money went to relatives and associates of the corrupt officials of 1MDB and others."
Red Granite, which was founded in 2010, denied on Wednesday that the funding received in 2012 was illegitimate. In an email statement, the company said it was "confident that when the facts come out, it will be clear that [founder] Riza Aziz and Red Granite did nothing wrong."
Malaysia said it would cooperate with the "lawful investigations."
DiCaprio and Scorsese not named in lawsuit
According to the 136-page civil complaint filed by the US Justice Department, between June 2012 and November 2012, an investment firm tied to 1MDB sent 238 million dollars to an account controlled by Aziz.
About $100 million of these funds were subsequently sent to a bank account linked to the production house and used to fund its operations, including "The Wolf of Wall Street."
DiCaprio and Scorsese were also producers of the movie, but were not named in Wednesday's lawsuits.
According to the complaint, however, some of the money was also used for extravagant trips to Las Vegas, where hundreds of thousands of dollars were spent gambling at the Venetian Casino.
Among those who were invited to take part in a July 2012 gambling jaunt was "a lead actor in The Wolf of Wall Street," who won a Golden Globe for the movie, the complaint alleges.
Pressure mounting on Razak
Other governments have joined the US in placing pressure on the Malaysian government to reveal the location of the missing funds.
In a joint statement released by police, the attorney general, and the Monetary Authority of Singapore on Thursday, officials said 240 million Singapore dollars ($177 million, 160 million euros) in assets had been seized. The funds are tied to alleged 1MDB financial transactions that flowed through Singapore. Officials are also looking into "possible regulatory breaches and control lapses" at a number of financial institutions involved in the transactions.
Switzerland has also frozen millions of dollars in assets in the wake of the scandal.
Razak has had to fend off mounting allegations of corruption since "The Wall Street Journal" reported that he had received nearly $700 million in payments from 1MDB in 2013, allegations that the organization denies.
The government later said the donations were a gift from the Saudi royal family.
ksb/gsw (Reuters, AFP)