U.S. attorney general Loretta Lynch says billions of dollars were stolen from an investment fund run by the government of Malaysia.
The thieves may be high-ranking officials in the Malaysian government and their family members.
The money generated by the fund was supposed to be used for economic development projects and to help raise the quality of life in Malaysia. But instead, it was used to buy artwork by famous artists such as Vincent Van Gogh, Claude Monet and Pablo Picasso. More money was used to purchase expensive homes and a jet, and to finance Hollywood movies.
The fund is called 1MDB. It opened in 2009.
Early on, billions of dollars moved out of the fund and into the account of a co-founder of oil company PetroSaudi International. The money was supposed to fund a project between Malaysia and the oil company. But the money went back into the account of a Malaysian government official known as “Malaysian Official One.”
Lynch would not identify the person known as “Malaysian Official One.” But observers believe it may be Malaysian Prime Minister Najib Razak.
Over the next five years, more than $3.5 billion were transferred from the fund into private bank accounts in Switzerland.
The U.S. Department of Justice is working to recover at least $1 billion in assets that were purchased with money stolen from the fund.
Those assets include the artwork and some of the profits from the 2013 movie “The Wolf of Wall Street.” The case, filed in California, is in fact called “U.S. v. Wolf of Wall Street.”
Najib’s stepson and another Malaysian investor started the production company that financed the film. The money likely came from the 1MDB fund.
Lynch said, “Corrupt officials treated this public trust as a personal bank account.”
The Department of Justice is involved through its Kleptocracy Asset Recovery Initiative. Lynch says the U.S. is involved because money passed through American banks. U.S. investment bank Goldman Sachs also raised money for the fund.
The complaint says banks in Singapore, Switzerland, Luxembourg and the U.S. were used in the fraud. Other governments are investigating the 1MDB fund, including Switzerland and Singapore.
Members of the Malaysian government’s opposition will probably ask for Najib to resign. But some of those same party members say Najib’s position as prime minister is probably safe.
Charles Santiago is a member of the opposition Democratic Action Party. He says some organizations in Malaysia will ask for an investigation based on the U.S. allegations. But, he said, “This will not go far.”
I’m Dan Friedell.
Steve Herman wrote this story for VOANews.com. Dan Friedell adapted it for Learning English. Kelly Jean Kelly was the editor.
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Words in This Story
trust – n. an arrangement in which someone's property or money is legally held or managed by someone else or by an organization (such as a bank) for usually a set period of time
kleptocracy – n. a corrupt government that steals from the people it is supposed to represent
asset – n. something that is owned by a person, company, etc. — usually plural
initiative – n. a plan or program that is intended to solve a problem
complaint – n. a formal charge saying that someone has done something wrong
fraud – n. the crime of using dishonest methods to take something valuable from another person
allegation – n. a statement saying that someone has done something wrong or illegal