1MDB
The 1MDB scandal is one of the largest instances of corruption in history, and its fallout has been in the news for almost a decade. Now, the United States Department of Justice has confiscated a Picasso drawing used to conceal stolen money.
The 1Malaysia Development Berhad (1MDB) was a sovereign wealth fund that the Malaysian government used to attract foreign investment starting in 2009. In their mandatory audit of the company, Malaysia’s Auditor-General submitted a report detailing their findings. However, the country’s National Security Council classified the report under the Official Secrets Act. A 2015 document leak exposed how Prime Minister Najib Razak, who made 1MDB into a state entity, funneled roughly $700 million from the company into personal bank accounts. When Razak’s party lost the 2018 general election, the new government subsequently declassified the audit, exposing how 1MDB was used to misappropriate billions of dollars. The scandal prompted investigations in Malaysia, the United States, Britain, Switzerland, Australia, and others. The FBI estimates stolen money adds up to $4.5 billion, while Swiss authorities say the number might be as high as $7 billion. One of the ways those involved hid the embezzled money was by using it to buy real estate and other assets, including art. Najib was eventually tried and convicted of money laundering, abuse of power, and breach of trust. The court sentenced him to 12 years in prison in 2020. Meanwhile, the alleged mastermind of the money laundering scheme, Jho Low, escaped Malaysia and has been living as a fugitive, most likely in China.
With art used to hide stolen money, authorities have confiscated art since the investigations began, with Van Goghs and Basquiats forfeited in the process. Low has recently agreed to forfeit roughly $100 million in assets to the Department of Justice. These assets include an apartment in Paris as well as several paintings, including one by Claude Monet and another by Andy Warhol collectively worth about $35 million. In this most recent development, though, the Justice Department has confiscated a Picasso drawing, Trois femmes nues et buste d’homme, from 1MDB’s former general counsel Jasmine Loo Ai Swan. The drawing, created in 1969, is worth approximately $1.27 million. Loo was able to purchase the drawing through Christie’s in 2014 using embezzled money. Along with the Picasso, Loo also forfeited a Swiss bank account totaling approximately $500K. This is just one small part of the $1.4 billion the United States has helped return to Malaysia in the scandal’s wake. Despite these forfeitures, Low and Loo are not exempt from any criminal charges they face in Malaysia, the United States, and courts in other countries. Low currently faces federal charges in New York that include money laundering and trying to bribe government officials in Malaysia and the United Arab Emirates. He also faces charges in a Washington DC court trying to conceal campaign contributions during the 2012 election.