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Fugitive Malaysian tycoon Jho Low nears US$1 billion settlement with US over 1MDB scandal, reports say

Fugitive Malaysian tycoon Jho Low nears US$1 billion settlement with US over 1MDB scandal, reports say

Deal would be biggest recovery of funds under US government’s Kleptocracy Asset Recovery Initiative and resolve more than dozen forfeiture lawsuits. Settlement will not include an admission of guilt or wrongdoing and will not be tied to criminal action against Low
Fugitive Malaysian financier Jho Low, widely viewed as the mastermind behind the multibillion dollar plunder of the 1MDB state fund, is poised to forfeit some US$1 billion to the US Department of Justice in a tentative settlement in civil forfeiture cases surrounding the scandal, reports said on Thursday.

Bloomberg, The New York Times and Malaysian business daily The Edge Markets reported the imminent settlement deal, citing sources with knowledge of the matter.

The reports said the deal will not include an admission of guilt or wrongdoing and would not be tied to criminal action against him.

The settlement could be filed in a California court as soon as this week, according to Bloomberg. The settlement would be the biggest recovery of funds under the US government’s Kleptocracy Asset Recovery Initiative. The Bloomberg source said the settlement would resolve more than a dozen forfeiture lawsuits.

The Department of Justice first announced the filing of civil forfeiture complaints in 2016, during the era of President Barack Obama.

Then attorney general Loretta E. Lynch said at the time that the action was taken as a warning that it would not allow the US financial system to be used as a conduit for corruption by officials around the world.

A Department of Justice spokesman declined to comment when contacted by This Week in Asia on Thursday. Low's New York-based spokesman did not respond to a request for comment.

The reports said the settlement will involve the recovery of funds from the sale of properties in Los Angeles, London and New York, as well as a Bombardier plane currently impounded in Singapore.

The US$1 billion amount is also expected to include a large chunk of investment in private equity.

The development comes amid an ongoing criminal trial involving Najib Razak, the former Malaysian prime minister who founded 1MDB in 2009 with Low’s help.

Najib, defeated in elections last year partly because of allegations of his involvement in the plunder, is facing 42 charges for his role in losses at the fund and companies linked to it.

Prime Minister Mahathir Mohamad, the 94-year-old ex-leader who returned to the helm after defeating Najib, has said that recouping the 1MDB’s losses – estimated to be over US$4.5 billion – is one of his government priorities.

In court, Najib’s lawyers have sought to paint the 66-year-old as having been duped by Low into believing that some US$681 million revealed to be in his personal accounts came from donations from the Saudi royal family.

Low has denied wrongdoing but has said he will not return to face justice in Malaysia because he has no faith in the justice system under Mahathir’s government.

The cherubic businessman is a wanted man in Malaysia and neighbouring Singapore – one among several jurisdictions that are involved in the 1MDB investigations.

Malaysia is separately seeking some US$3.3 billion in compensation from Goldman Sachs, the US investment bank which raised bonds for 1MDB.

The country’s attorney general, Tommy Thomas, said in an interview with Nikkei Asian Review earlier this month that two rounds of talks have taken place between his officials and the US bank, with the gulf remaining “very wide”.

17 current and former Goldman executives are among a slew of individuals who are facing criminal charges for their role – direct or indirect – in the saga.

Others include the Najib-era chief of the treasury, Irwan Serigar Abdullah, and Arul Kanda Kandasamy, a former 1MDB chief executive.
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