Singapore seizes assets in Malaysia wealth fund probe

By Kirsten Han

SINGAPORE (AA) – Singaporean authorities have seized around $177 million worth of assets as part of their investigations into allegations of money laundering, cheating and securities fraud related to a beleaguered Malaysian state development fund.

The announcement from Singaporean authorities came on the heels of prosecutors in the United States filing legal action to recover more than $1 billion in assets they claim were tied to money channeled from 1Malaysia Development Berhad (1MDB).

U.S. prosecutors say money taken from the fund was moved through shell companies and hidden in the U.S. via the purchase of high-end properties in New York and California and luxury goods.

A joint statement Thursday from the Monetary Authority of Singapore (MAS), the Attorney-General's Chambers and the Commercial Affairs Department of the Singapore Police Force stated that investigations into 1MDB had begun in March 2015.

Since then, bank accounts and properties belonging to various individuals of interest have been seized.

Of the 240 million Singapore dollars seized, around 120 Singapore million belong to Malaysian financier and agent Low Taek Jho, who has been implicated in alleged mismanagement at 1MDB, and his immediate family.

In a separate statement, MAS said it had found lapses and weaknesses in anti-money laundering controls in certain Singaporean financial institutions with 1MDB-related fund flows.

It identified the institutions as the Singapore branches of BSI Bank, Falcon Private Bank Limited, Standard Chartered bank and UBS AG, and DBS Bank Ltd.

Raffles Money Change, a licensed money changer and remittance agent, was also identified.

MAS had directed BSI Bank to shut down in May after finding both "serious breaches" in anti-money laundering controls as well as gross misconduct by its staff.

Six members of BSI Bank were referred to the Public Prosecutor to consider if criminal offences have been committed. One former BSI private banker, Teo Jiawei, has already been charged.

"The preliminary findings are that there were instances of control failings in all three banks and, in some cases, weaknesses in the processes for accepting clients and monitoring transactions," MAS said of Standard Chartered, UBS and DBS Bank. “There was also undue delay in detecting and reporting suspicious transactions.”

On Wednesday, the deputy director of the U.S. Federal Bureau of Investigation, Andrew McCabe, told a briefing in Washington that the Malaysian people “were defrauded on an enormous scale".

Among the assets the U.S. seeks to seize are paintings by Claude Monet and Vincent Van Gogh, and a $35 million Bombardier jet.

Prosecutors also said that money from 1MDB had been used to fund Hollywood film The Wolf of Wall Street, which was produced by a company founded by Riza Aziz, the stepson of Malaysian Prime Minister Najib Razak.

Although the premier -- whose opponents have demanded his resignation over financial scandals -- was not named in the civil lawsuits filed in the U.S. federal court, Razak is the chair of 1MDB’s Board of Directors, and all major decisions and actions taken by the fund require the authorization of the prime minister.

Malaysia has responded to the legal action by vowing to cooperate with lawful investigations of its companies and citizens.