Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 1 of 136 Page ID #:1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 M. KENDALL DAY, Chief Asset Forfeiture and Money Laundering Section (AFMLS) MARY BUTLER Chief, International Unit WOO S. LEE Deputy Chief, International Unit KYLE R. FREENY Trial Attorney Criminal Division United States Department of Justice 1400 New York Avenue, N.W., 10th Floor Washington, D.C. 20530 Telephone: (202) 514-1263 Email: Woo.Lee@usdoj.gov EILEEN M. DECKER United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section JOHN J. KUCERA (CBN: 274184) CHRISTEN A. SPROULE (CBN: 310120) Assistant United States Attorneys Asset Forfeiture Section 312 North Spring Street, 14th Floor Los Angeles, California 90012 Telephone: (213) 894-3391/(213) 894-4493 Facsimile: (213) 894-7177 Email: John.Kucera@usdoj.gov Christen.A.Sproule@usdoj.gov 18 19 20 Attorneys for Plaintiff UNITED STATES OF AMERICA 21 UNITED STATES DISTRICT COURT 22 FOR THE CENTRAL DISTRICT OF CALIFORNIA 23 UNITED STATES OF AMERICA, 24 Plaintiff, 25 v. 26 “THE WOLF OF WALL STREET” 27 MOTION PICTURE, INCLUDING ANY RIGHTS TO PROFITS, ROYALTIES 28 AND DISTRIBUTION PROCEEDS No. CV 16-16-5362 VERIFIED COMPLAINT FOR FORFEITURE IN REM 18 U.S.C. §§ 981(a)(1)(A) & (C) [F.B.I.] Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 2 of 136 Page ID #:2 1 OWED TO RED GRANITE PICTURES, 2 INC. OR ITS AFFILIATES AND/OR ASSIGNS, 3 Defendant. 4 5 6 7 8 The United States of America brings this complaint against the above-captioned asset and alleges as follows: 9 PERSONS AND ENTITIES 10 1. The plaintiff is the United States of America. 11 2. The defendant in this action is “The Wolf of Wall Street” Motion Picture, 12 Including any Rights to Profits, Royalties and Distribution Proceeds owed to Red 13 Granite Pictures, Inc. or its Affiliates and/or Assigns, (hereinafter, the “Defendant 14 Asset”), more particularly described in Attachment A. 15 16 17 3. The Defendant Asset is held by Red Granite Pictures, Inc. The persons and entities whose interests may be affected by this action are listed in Attachment A. 4. Contemporaneously with the filing of this complaint, plaintiff is filing 18 related actions seeking the civil forfeiture of the following assets (collectively, the 19 “SUBJECT ASSETS”): 20 a. THE L’ERMITAGE PROPERTY: All right and title to the real 21 property commonly known as 9291 Burton Way, Beverly Hills, California 90210, 22 including the L’Ermitage Hotel (“L’ERMITAGE PROPERTY”), including all 23 appurtenances, improvements, and attachments thereon. 24 b. THE L’ERMITAGE BUSINESS ASSETS: All assets related to 25 the L’ERMITAGE PROPERTY, including but not limited to all chattels and intangible 26 assets, inventory, and equipment (“L’ERMITAGE BUSINESS ASSETS”), including 27 any and all funds in accounts owned, held or maintained at financial institutions by 28 LBH Real Estate, or for the benefit of LBH Real Estate or the L’ERMITAGE 2 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 3 of 136 Page ID #:3 1 PROPERTY, and all leases, rents, and profits derived from said business. Collectively 2 herein, the L’ERMITAGE PROPERTY and the L’ERMITAGE BUSINESS ASSETS 3 are referred to as, “L’ERMITAGE.” 4 c. HILLCREST PROPERTY 1: All right and title to the real property 5 located in Beverly Hills, California1 owned by 912 North Hillcrest Road (BH), LLC 6 (“HILLCREST PROPERTY 1”), including all appurtenances, improvements, and 7 attachments thereon, as well as all leases, rents, and profits derived therefrom. 8 9 d. PARK LAUREL CONDOMINIUM: All right and title to the real property located in New York, New York owned by Park Laurel Acquisition LLC 10 (“PARK LAUREL CONDOMINIUM”), including all appurtenances, improvements, 11 and attachments thereon, as well as all leases, rents, and profits derived therefrom. 12 e. BOMBARDIER JET: All right and title to Bombardier Global 13 5000 aircraft bearing manufacturer serial number 9265 and registration number 14 N689WM, with two Rolls Royce engines bearing manufacturer’s serial numbers 12487 15 and 12488 (“BOMBADIER JET”), including all appurtenances, improvements, and 16 attachments thereon, all aircraft logbooks, and all leases, rents, and profits derived 17 therefrom. 18 f. TIME WARNER PENTHOUSE: All right and title to the real 19 property located in New York, New York owned by 80 Columbus Circle (NYC) LLC 20 (“TIME WARNER PENTHOUSE”), including all appurtenances, improvements, and 21 attachments thereon, as well as all leases, rents, and profits derived therefrom. The 22 TIME WARNER PENTHOUSE includes all right and title to the real property 23 commonly known as SU-11, New York, New York (“TIME WARNER STORAGE 24 UNIT”), including all appurtenances, improvements, and attachments thereon, as well 25 as all leases, rents, and profits derived therefrom. 26 27 28 1 Pursuant to L.R. 5.2-1, residential addresses are listed by the city and state only. 3 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 4 of 136 Page ID #:4 1 g. ORIOLE MANSION: All right and title to the real property located 2 in Los Angeles, California owned by Oriole Drive (LA) LLC (“ORIOLE MANSION”), 3 including all appurtenances, improvements, and attachments thereon, as well as all 4 leases, rents, and profits derived therefrom. 5 h. GREENE CONDOMINIUM: All right and title to the real property 6 located in New York, New York owned by 118 Greene Street (NYC) LLC (“GREENE 7 CONDOMINIUM”), including all appurtenances, improvements, and attachments 8 thereon, as well as all leases, rents, and profits derived therefrom. 9 i. EMI ASSETS: Any and all rights, including copyright and 10 intellectual property rights, as well as the right to collect and receive any profits, 11 royalties, and proceeds of distribution owned by or owed to JW Nile (BVI), Ltd.; JCL 12 Media (EMI Publishing Ltd.); and/or Jynwel Capital Ltd., relating to EMI Music 13 Publishing Group North America Holdings, Inc. and D.H. Publishing L.P. 14 j. SYMPHONY CP (PARK LANE) LLC ASSETS: All right to and 15 interest in Symphony CP (Park Lane) LLC, a Delaware limited liability company, 16 owned, held or acquired, directly or indirectly, by Symphony CP Investments LLC and 17 Symphony CP Investments Holdings LLC, including but not limited to any interest in 18 the real property and appurtenances located at 36 Central Park South, New York, New 19 York, 10019, known as the Park Lane Hotel, any right to collect and receive any profits 20 and proceeds therefrom, and any interest derived from the proceeds invested in 21 Symphony CP (Park Lane) LLC by Symphony CP Investments LLC or Symphony CP 22 Investments Holdings. 23 k. WALKER TOWER PENTHOUSE: All right and title to the 24 property located in New York, New York owned by 212 West 18th Street LLC 25 (“WALKER TOWER PENTHOUSE”), including all appurtenances, improvements, and 26 attachments thereon, as well as all leases, rents, and profits derived therefrom. 27 28 l. LAUREL BEVERLY HILLS MANSION: All right and title to the property located in Beverly Hills, California, owned by Laurel Beverly Hills Holdings, 4 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 5 of 136 Page ID #:5 1 LLC (“LAUREL BEVERLY HILLS MANSION”), including all appurtenances, 2 improvements, and attachments thereon, as well as all leases, rents, and profits derived 3 therefrom. 4 m. HILLCREST PROPERTY 2: All right and title to the property 5 located in Beverly Hills, California owned by 1169 Hillcrest Road LLC (“HILLCREST 6 PROPERTY 2”), including all appurtenances, improvements, and attachments thereon, 7 as well as all leases, rents, and profits derived therefrom. 8 9 n. maison de Vincent a Arles by Vincent Van Gogh. 10 11 o. SAINT GEORGES PAINTING: One painting entitled “Saint- Georges Majeur” by Claude Monet. 12 13 VAN GOGH ARTWORK: One pen and ink drawing entitled La p. NYMPHEAS PAINTING: One painting entitled “Nympheas avec Reflets de Hautes Herbes” by Claude Monet. 14 q. THE QENTAS TOWNHOUSE: All right and title to the property 15 located in London, United Kingdom (“U.K.”), SW1W 0JR, owned by Qentas Holdings 16 Limited (the “QENTAS TOWNHOUSE”), including all appurtenances, improvements, 17 and attachments thereon, as well as all leases, rents, and profits derived therefrom. 18 QENTAS TOWNHOUSE includes all right, title, and interest in the leasehold for 19 Parking Space 2 at the QENTAS TOWNHOUSE, as well as all sub-leases, rents, and 20 profits derived therefrom. According to a search of the Land Registry conducted by the 21 U.K. National Crime Agency (“NCA”), title to QENTAS TOWNHOUSE is held in the 22 name of Qentas Holdings Limited, and there are no recorded liens against the property. 23 NATURE OF THE ACTION 24 25 5. This is a civil action in rem to forfeit assets involved in and traceable to an 26 international conspiracy to launder money misappropriated from 1Malaysia 27 Development Berhad (“1MDB”), a strategic investment and development company 28 5 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 6 of 136 Page ID #:6 1 wholly-owned by the government of Malaysia.2 The United States seeks forfeiture of 2 property located in the United States and abroad, including in the United Kingdom and 3 Switzerland, pursuant to 18 U.S.C. § 981(a)(1)(C), on the ground that it was derived 4 from violations of U.S. law, and pursuant to 18 U.S.C. § 981(a)(1)(A) on the ground that 5 it is property involved in one or more money laundering offenses in violation of 18 6 U.S.C. §§ 1956 and/or 1957. 7 6. 1MDB was ostensibly created to pursue investment and development 8 projects for the economic benefit of Malaysia and its people, primarily relying on the 9 issuance of various debt securities to fund these projects. However, over the course of 10 an approximately four-year period, between approximately 2009 and at least 2013, 11 multiple individuals, including public officials and their associates, conspired to 12 fraudulently divert billions of dollars from 1MDB through various means, including by 13 defrauding foreign banks and by sending foreign wire communications in furtherance of 14 the scheme, and thereafter, to launder the proceeds of that criminal conduct, including in 15 and through U.S. financial institutions. The funds diverted from 1MDB were used for 16 the personal benefit of the co-conspirators and their relatives and associates, including to 17 purchase luxury real estate in the United States, pay gambling expenses at Las Vegas 18 casinos, acquire more than $200 million in artwork, invest in a major New York real 19 estate development project, and fund the production of major Hollywood films. 1MDB 20 maintained no interest in these assets and saw no returns on these investments. 21 7. The criminal conduct alleged herein occurred in three principal phases: 22 8. The “Good Star” Phase: The fraudulent diversion of funds from 1MDB 23 began in approximately September 2009, soon after 1MDB’s creation. Between 2009 24 and 2011, under the pretense of investing in a joint venture between 1MDB and 25 PetroSaudi International (“PetroSaudi” or “PSI”), a private Saudi oil extraction 26 company, officials of 1MDB and others arranged for the fraudulent transfer of more than 27 28 2 Malaysia is a sovereign country located in Southeast Asia. 6 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 7 of 136 Page ID #:7 1 $1 billion from 1MDB to a Swiss bank account held in the name of Good Star Limited 2 (“Good Star Account”). Officials at 1MDB caused this diversion of funds by, among 3 other things, providing false information to banks about the ownership of the Good Star 4 Account. Contrary to representations made by 1MDB officials, the Good Star Account 5 was beneficially owned not by PetroSaudi or the joint venture, but by LOW Taek Jho, 6 a/k/a Jho Low (“LOW”), a Malaysian national who had no formal position with 1MDB 7 but was involved in its creation. LOW laundered more than $400 million of the funds 8 misappropriated from 1MDB through the Good Star Account into the United States, after 9 which these funds were used for the personal gratification of LOW and his associates.3 10 9. The “Aabar-BVI” Phase: In 2012, 1MDB officials and others 11 misappropriated and fraudulently diverted a substantial portion of the proceeds that 12 1MDB raised through two separate bond offerings arranged and underwritten by 13 Goldman Sachs International (“Goldman”). The bonds were guaranteed by both 1MDB 14 and the International Petroleum Investment Company (“IPIC”), an investment fund 15 wholly-owned by the government of Abu Dhabi, in the United Arab Emirates 16 (“U.A.E.”).4 Beginning almost immediately after 1MDB received the proceeds of each 17 of these two bond issues, 1MDB officials caused a substantial portion of the proceeds – 18 approximately $1.367 billion, a sum equivalent to more than forty percent of the total net 19 proceeds raised – to be wire transferred to a Swiss bank account belonging to a British 20 Virgin Islands entity called Aabar Investments PJS Limited (“Aabar-BVI”). 21 10. Aabar-BVI was created and named to give the impression that it was 22 associated with Aabar Investments PJS (“Aabar”), a subsidiary of IPIC incorporated in 23 Abu Dhabi. In reality, Aabar-BVI has no genuine affiliation with Aabar or IPIC, and the 24 Swiss bank account belonging to Aabar-BVI (“Aabar-BVI Swiss Account”) was used to 25 3 26 27 28 All amounts referenced in dollars ($) are denominated in U.S. dollars and all dates, times, and monetary amounts are approximate. 4 The United Arab Emirates is a sovereign nation in the Arabian Peninsula, comprising seven separate emirates, including the Emirate of Abu Dhabi (“Abu Dhabi”). 7 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 8 of 136 Page ID #:8 1 siphon off proceeds of the 2012 bond sales for the personal benefit of officials at IPIC, 2 Aabar, and 1MDB and their associates. Funds diverted through the Aabar-BVI Swiss 3 Account were transferred to, among other places, a Singapore bank account controlled 4 by TAN Kim Loong, a/k/a Eric Tan (“TAN”), an associate of LOW. Those funds were 5 thereafter distributed for the personal benefit of various individuals, including officials at 6 1MDB, IPIC, or Aabar, rather than for the benefit of 1MDB, IPIC, or Aabar. 7 11. The “Tanore” Phase: In 2013, several individuals, including 1MDB 8 officials, diverted more than $1.26 billion out of a total of $3 billion in principal that 9 1MDB raised through a third bond offering arranged by Goldman in March 2013. The 10 proceeds of this bond offering were to be used by 1MDB to fund a joint venture with 11 Aabar known as the Abu Dhabi Malaysia Investment Company (“ADMIC”). However, 12 beginning days after the bond sale, a significant portion of the proceeds was instead 13 diverted to a bank account in Singapore held by Tanore Finance Corporation (“Tanore 14 Account”), for which TAN was the recorded beneficial owner. Although the Tanore 15 Account had no legitimate connection to 1MDB, the then-Executive Director of 1MDB 16 was an authorized signatory on the account. 1MDB funds transferred into the Tanore 17 Account were used for the personal benefit of LOW and his associates, including 18 officials at 1MDB, rather than for the benefit of 1MDB or ADMIC. 19 12. The proceeds of each of these three phases of criminal conduct were 20 laundered through a complex series of transactions, including through bank accounts in 21 Singapore, Switzerland, Luxembourg, and the United States. 22 13. Numerous assets, including the DEFENDANT ASSET, were acquired with 23 funds unlawfully diverted from 1MDB, or funds traceable thereto. As a result, the 24 DEFENDANT ASSET is subject to forfeiture to the United States pursuant to 18 U.S.C. 25 § 981(a)(1)(A), because it is property involved in one or more money laundering 26 transactions in violation of 18 U.S.C. §§ 1956 and/or 1957, and 18 U.S.C. § 981(a)(1)(C) 27 because it is property constituting or derived from proceeds traceable to one or more 28 8 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 9 of 136 Page ID #:9 1 violations of U.S. law defined as a specified unlawful activity in 18 U.S.C. §§ 1956(c)(7) 2 and/or 1961(1). 3 JURISDICTION AND VENUE 4 5 6 14. This is a civil forfeiture action brought pursuant to 18 U.S.C. § 981(a)(1)(A) and (C). 7 15. 8 and 1355. 9 16. This Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1345 Venue lies in this district pursuant to 28 U.S.C. §§ 1355(b)(1)(A) and 10 1355(b)(2) because acts and omissions giving rise to the forfeiture took place in the 11 Central District of California, and/or pursuant to 28 U.S.C. § 1395(b), because the 12 Defendant Asset is located in the Central District of California. 13 14 BACKGROUND: RELEVANT INDIVIDUALS AND ENTITIES 17. 1Malaysia Development Berhad (“1MDB”) is a strategic investment and 15 development company wholly-owned by the Malaysian government, through the 16 Malaysian Ministry of Finance. It was formed in 2009 when the Malaysian government 17 took control of a municipal entity called Terengganu Investment Authority (“TIA”). 18 1MDB’s governance structure has been comprised of a senior leadership team, a Board 19 of Directors (“1MDB Board of Directors” or “1MDB Board”), and a Board of Advisors. 20 18. PetroSaudi International Ltd. (“PetroSaudi” or “PSI”) is a private Saudi 21 Arabia-based oil services company incorporated in Saudi Arabia, which maintains 22 offices in the United Kingdom. 23 19. 1MDB PetroSaudi, Ltd. was a purported joint venture between 1MDB and 24 PetroSaudi formed in or around September 2009 for the stated purpose of exploiting 25 certain energy concessions PetroSaudi purportedly owned in Turkmenistan and 26 Argentina. 27 28 9 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 10 of 136 Page ID #:10 1 20. International Petroleum Investment Company (“IPIC”) is an investment 2 entity wholly-owned by the Abu Dhabi government. Its management is comprised of a 3 Chairman, Deputy Chairman, Board of Directors, and Managing Director. 4 5 6 21. Aabar Investments PJS (“Aabar”) is a public joint stock company incorporated under the laws of Abu Dhabi and a subsidiary of IPIC. 22. Aabar Investments PJS Ltd. (“Aabar BVI”) is an entity incorporated in 7 the British Virgin Islands in March 2012 that was purported to be owned by IPIC and 8 Aabar. Aabar-BVI maintained a bank account at BSI Bank in Switzerland. IPIC and 9 Aabar recently clarified that Aabar-BVI is not their affiliate. 10 23. Abu Dhabi Malaysia Investment Company (“ADMIC”) is a purported 11 joint venture between 1MDB and Aabar that was created in or around March 2013 for 12 the stated purpose of promoting the growth and development of Malaysia and Abu 13 Dhabi. 14 24. LOW Taek Jho, a/k/a/ Jho Low (“LOW”) is a Malaysian national who 15 advised on the creation of TIA, 1MDB’s predecessor. LOW has never held a formal 16 position at 1MDB, and he has publicly denied any involvement with 1MDB after its 17 inception. 18 25. 1MDB OFFICER 1 is a Malaysian national who served as the Executive 19 Director of 1MDB from the time of its creation until approximately March 2011. During 20 this time, 1MDB OFFICER 1 was a “public official” as that term is used in 18 U.S.C. 21 § 1956(c)(7)(B)(iv) and a “public servant” as that term is used in Section 21 of the 22 Malaysian Penal Code. 23 26. 1MDB OFFICER 2 is a Malaysian national who served as 1MDB’s Chief 24 Executive Officer (“CEO”) between at least 2009 and 2013. During this time, 1MDB 25 OFFICER 2 was a “public official” as that term is used in 18 U.S.C. § 1956(c)(7)(B)(iv) 26 and a “public servant” as that term is used in Section 21 of the Malaysian Penal Code. 27 28 27. 1MDB OFFICER 3 is Malaysian national who served as 1MDB’s General Counsel and Executive Director of Group Strategy during, at a minimum, 2012 and 10 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 11 of 136 Page ID #:11 1 2013. 1MDB OFFICER 3 was a main point of contact between 1MDB and Goldman in 2 connection with the three Goldman-underwritten bond offerings in 2012 and 2013. 3 During this time, 1MDB OFFICER 3 was a “public official” as that term is used in 18 4 U.S.C. § 1956(c)(7)(B)(iv) and a “public servant” as that term is used in Section 21 of 5 the Malaysian Penal Code. 6 28. MALAYSIAN OFFICIAL 1 is a high-ranking official in the Malaysian 7 government who also held a position of authority with 1MDB. During all times relevant 8 to the Complaint, MALAYSIAN OFFICIAL 1 was a “public official” as that term is 9 used in 18 U.S.C. § 1956(c)(7)(B)(iv) and a “public servant” as that term is used in 10 11 Section 21 of the Malaysian Penal Code. 29. Riza Shahriz Bin Abdul AZIZ (“AZIZ”), a Malaysian national, is a 12 relative of MALAYSIAN OFFICIAL 1 and a friend of LOW. He co-founded Red 13 Granite Pictures, a Hollywood movie production and distribution studio, in 2010. 14 30. “Eric” TAN Kim Loong (“TAN”) is a Malaysian national and an associate 15 of LOW. He was the stated beneficial owner of several bank accounts into which 16 misappropriated 1MDB funds were transferred. 17 31. Khadem Abdulla Al QUBAISI (“QUBAISI”), a U.A.E. national, was the 18 Managing Director of IPIC from 2007 to 2015 and the Chairman of Aabar in at least 19 2012 and 2013. During this time, he was a “public official” as that term is used in 18 20 U.S.C. § 1956(c)(7)(B)(iv) and a “public official” as that term is used in Article(5) of 21 United Arab Emirates Law, Federal Law No (3) Of 1989 On Issuance Of The Penal 22 Code. QUBAISI also was a director of Aabar-BVI. 23 32. Mohamed Ahmed Badawy Al-HUSSEINY (“HUSSEINY”), a U.S. 24 citizen, was the CEO of Aabar from 2010 to 2015. He was also a director of Aabar-BVI. 25 EVIDENCE SUPPORTING FORFEITURE 26 33. The Defendant Asset represents a portion of the proceeds of over $3.5 27 billion misappropriated from 1MDB. That misappropriation occurred in multiple phases 28 over the course of several years. The misappropriated funds were then used to purchase 11 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 12 of 136 Page ID #:12 1 the Defendant Asset, as well as to fund the co-conspirators’ lavish lifestyles, including 2 purchases of artwork and jewelry, the acquisition of luxury real estate, the payment of 3 gambling expenses, and the hiring of musicians and celebrities to attend parties. The use 4 of the diverted 1MDB funds for the personal benefit of the co-conspirators and their 5 associates was not consistent with the purposes for which 1MDB raised the funds, and 6 neither 1MDB nor the government of Malaysia realized any returns on these purchases 7 and expenditures. 8 9 10 I. BACKGROUND ON THE FORMATION OF 1MDB 34. 1MDB is an investment and development entity wholly-owned by the 11 government of Malaysia, through the Ministry of Finance (“MOF”). It grew out of an 12 entity called “Terengganu Investment Authority” (“TIA”).5 In or around February 2009, 13 the Malaysian municipality of Terengganu, assisted by Goldman, formed TIA with the 14 stated purpose of investing and managing that municipality’s public funds. To raise 15 capital for its operations, TIA issued and sold Islamic medium term notes (“IMTNs”), a 16 form of debt security, valued at 5 billion Malaysian ringgit (MYR). By 2009 conversion 17 rates, this amounted to approximately $1,425,680,000. The IMTNs were 30-year notes 18 with a yield of approximately 5.75 percent, issued with the assistance of AmBank in 19 Malaysia. 20 35. 21 22 LOW Taek Jho, a/k/a Jho LOW (“LOW”), a Malaysian national, served as an advisor to TIA and its founders as early as January 2009. 36. Electronic communications between Goldman employees and individuals 23 involved with TIA confirm that LOW was involved in the creation of TIA. For example, 24 on or about January 14, 2009, 1MDB OFFICER 1, who served as TIA’s Executive 25 Director of Business Development and later became the Executive Director of 1MDB, 26 sent an email to, among others, LOW and Goldman employees with the subject line “Re: 27 28 5 Except where a distinction is made, all references to 1MDB may refer to TIA before it was renamed 1MDB. 12 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 13 of 136 Page ID #:13 1 Project TIARA.” In this email, 1MDB OFFICER 1 stated, referring to LOW: “I think it 2 is best to get Jho involve[d] at every stage. Jho will revert on the suitability of dates n 3 [sic] time for the next 48 hrs.” 4 37. On or about March 31, 2009, LOW sent an email to a Goldman employee 5 and 1MDB OFFICER 1 with the subject line “Re – Press Answer URGENT.” In the 6 email, LOW stated: 7 Bro, here is outline of the issues I would like to discuss with the Terengganu 8 Investment Authority. In essence the disquiet surrounding the plan is that the 9 fund will operate entirely on borrowed money, which is largely anathema 10 because it puts taxpayer’s money at risk. Could they elaborate on this 11 concern? 12 13 There is also the issue of transparency and will the money go towards 14 portfolio investments or be used to buy strategic stakes in companies.? [sic] 15 16 38. According to Malaysian news reports and archived 1MDB press releases, in 17 or around July 2009, the Malaysian Ministry of Finance assumed control of TIA and the 18 more than $1 billion in IMTNs issued by TIA. In September 2009, TIA’s name was 19 changed to 1Malaysia Development Berhad, or 1MDB. The Malaysian government also 20 became a guarantor on the IMTNs. 1MDB was to act as a strategic development 21 company, wholly-owned by the Malaysian government, with a mission to promote 22 Malaysian economic development through global partnerships and foreign direct 23 investment. The Malaysian government exercised a high degree of control over 1MDB 24 pursuant to its governing documents, including its Articles of Association. 25 39. Upon its formation, MALAYSIAN OFFICIAL 1 assumed a position of 26 authority with 1MDB. MALAYSIAN OFFICIAL 1 had the authority to approve all 27 appointments to, and removals from, 1MDB’s Board of Directors and 1MDB’s Senior 28 Management Team. In addition, any financial commitments by 1MDB, including 13 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 14 of 136 Page ID #:14 1 investments, that were likely to affect a guarantee given by the government of Malaysia 2 for the benefit of 1MDB or any policy of the Malaysian government, required, the 3 approval of MALAYSIAN OFFICIAL 1. 4 5 6 II. THE GOOD STAR PHASE: MORE THAN $1 BILLION IS MISAPPROPRIATED FROM 1MDB 7 A. EXECUTIVE SUMMARY OF THE GOOD STAR PHASE 8 40. As one of its first investment projects, 1MDB entered into an agreement in 9 September 2009 with PetroSaudi International (“PetroSaudi” or “PSI”), a private Saudi 10 Arabia-based oil services company, to form a joint venture called 1MDB PetroSaudi Ltd. 11 (“the 1MDB-PetroSaudi JV” or “Joint Venture”). The stated purpose of the Joint 12 Venture was to exploit certain energy concession rights in Turkmenistan and Argentina 13 that PetroSaudi purported to own. Under the terms of the agreement, (a) 1MDB agreed 14 to invest $1 billion in cash in the Joint Venture in exchange for a forty percent (40%) 15 equity interest in the Joint Venture, and (b) PetroSaudi agreed to give the Joint Venture 16 the mineral extraction concessions it purportedly owned in Turkmenistan and Argentina 17 in exchange for a sixty percent (60%) equity interest in the Joint Venture. PetroSaudi’s 18 energy concession rights were allegedly valued at approximately $2.7 billion. 19 41. Both 1MDB’s Board of Directors and Bank Negara, Malaysia’s Central 20 Bank, approved the transfer of $1 billion to the Joint Venture. However, as set forth in 21 greater detail in the sections that follow, LOW and his associates caused $700 million of 22 the $1 billion that was to be invested in the Joint Venture to be sent to an account at RBS 23 Coutts Bank in Zurich (“RBS Coutts”) held in the name of Good Star Limited (“Good 24 Star Account”). 25 42. Between May and October 2011, approximately $330 million in additional 26 funds were wired at the direction of 1MDB officials to the Good Star Account 27 purportedly in connection with a financing agreement executed between 1MDB and the 28 1MDB-Petrosaudi JV. 14 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 15 of 136 Page ID #:15 1 43. Although 1MDB officials represented, including to Deutsche Bank in 2 Malaysia, that Good Star was a wholly-owned subsidiary of PetroSaudi, this was not 3 true. According to banking records, Good Star was a company controlled by LOW, and 4 LOW was also the Good Star Account’s beneficial owner and sole authorized signatory. 5 At the time, LOW was a 29-year-old with no official position with 1MDB or PetroSaudi. 6 7 8 9 B. INCEPTION OF GOOD STAR AND THE GOOD STAR ACCOUNT 44. RBS Coutts bank account records indicate that Good Star Limited was formed in the Seychelles on or about May 18, 2009.6 The sole director of Good Star is 10 listed as Smart Power, of which LOW is the sole director. LOW is listed on the bank 11 records as Good Star’s secretary. Smart Power’s ownership equity in Good Star consists 12 of a single bearer share of company stock. That single bearer share was issued to LOW 13 on or about June 2, 2009, seven days before he opened the Good Star Account. In 14 exchange for that single bearer share, LOW paid $1 in consideration. 15 45. A Memorandum issued pursuant to Good Star’s Articles of Association 16 indicates that the company’s books, records, and minutes would be maintained at 50 17 Raffles Place in Singapore, c/o SINGAPORE BANKER 1. SINGAPORE BANKER 1’s 18 office is also designated as the location where “all correspondence” to Good Star should 19 be sent. At the time, SINGAPORE BANKER 1 was employed as a banker at RBS 20 Coutts in Singapore. RBS Coutts’ Singapore branch occupied an address at 50 Raffles 21 Place in Singapore. 22 46. On or about June 9, 2009, LOW opened the Good Star Account at an RBS 23 Coutts branch in Singapore by completing an “Application for Opening an 24 Account/Custody Account by Legal Entities.” The application bears LOW’s signature. 25 LOW also completed a form entitled “Establishment of the Beneficial Owner’s Identity,” 26 which identified LOW as the sole beneficial owner of the Good Star Account. LOW 27 28 6 Seychelles is a sovereign country located in the Indian Ocean off of East Africa. 15 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 16 of 136 Page ID #:16 1 also completed a form entitled “Resolutions,” in which LOW was named as the sole 2 authorized signatory on the Good Star Account. This form also bears LOW’s signature. 3 Included in the account opening records was a copy of a page from LOW’s Malaysian 4 passport containing, among other things, LOW’s photograph. 5 C. 6 SEPTEMBER 2009 7 8 9 1MDB FORMS A JOINT VENTURE WITH PETROSAUDI IN 47. On or about September 18, 2009, the 1MDB Board of Directors (“Board”) met at the Royale Chulan Hotel in Kuala Lumpur, Malaysia. The 1MDB Board minutes 10 of that meeting provide that the purpose of the meeting was to discuss the anticipated 11 creation of the 1MDB-PetroSaudi JV. The following individuals were present: (i) 12 1MDB OFFICER 1, (ii) the CEO of 1MDB (“1MDB OFFICER 2”), (iii) the Chairman 13 of the 1MDB Board, (iv) 1MDB’s Director of Investments, and (v) three 1MDB 14 Directors. 15 48. The Board minutes further indicate that 1MDB OFFICERS 1 and 2 offered 16 a Position Paper during the September 18, 2009 meeting. The Position Paper, signed by 17 1MDB OFFICERS 1 and 2, included a formal request that the 1MDB Board authorize 18 1MDB “to invest US$1 bln into the [1MDB-PetroSaudi JV] upon signing of the [1MDB- 19 PetroSaudi JV Agreement] as its contribution to the capital of the [1MDB-PetroSaudi 20 JV].” 21 49. The Board minutes state further that, on or about September 18, 2009, the 22 1MDB Board authorized 1MDB to enter into negotiations with PetroSaudi for the 23 purpose of creating the 1MDB-PetroSaudi JV. However, the 1MDB Board also resolved 24 that 1MDB’s management should report back to the Board regarding some of the issues 25 raised by the Board, including whether (i) an expert selected by 1MDB could be used to 26 assess the value of PetroSaudi’s assets and (ii) PetroSaudi could also be required to 27 invest at least $1 billion in cash into the 1MDB-PetroSaudi JV. 28 16 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 17 of 136 Page ID #:17 1 50. A special meeting of the 1MDB Board was held on September 26, 2009, 2 which was attended by 1MDB OFFICERS 1 and 2 and members of the Board. 3 LOW also attended this meeting. Just prior to the meeting, LOW spoke by telephone 4 with MALAYSIAN OFFICIAL 1. 5 51. According to the 1MDB Board minutes of the September 26, 2009 meeting, 6 1MDB’s Board passed a resolution authorizing 1MDB to transmit $1 billion to the 7 1MDB-PetroSaudi JV. Specifically, the 1MDB Board approved 1MDB’s resolution to 8 transfer $1 billion from 1MDB through a foreign exchange transaction with Deutsche 9 Bank (Malaysia) Berhad (“Deutsche Bank”), “into the bank account of [the 1MDB- 10 PetroSaudi JV] for the purpose of subscribing of 1 billion ordinary shares in [the 1MDB- 11 PetroSaudi JV].” The resolution was signed by the Chairman of the 1MDB Board and 12 1MDB OFFICER 2. 13 52. The Joint Venture Agreement (“JVA”) between 1MDB and PetroSaudi was 14 executed on or about September 28, 2009. Under the terms of the JVA, 1MDB agreed to 15 invest $1 billion into the 1MDB-PetroSaudi JV in exchange for one billion equity shares, 16 equivalent to a 40% equity stake in the 1MDB-PetroSaudi JV. In turn, PetroSaudi 17 agreed to place into the 1MDB-PetroSaudi JV certain assets valued at approximately 18 $2.7 billion, purportedly consisting of “energy interests in the Turkmenistan sector of the 19 Caspian Sea” and “the Argentinean provinces of Rio Negro” and Chubut. 1MDB 20 OFFICER 2 signed the JVA on behalf of 1MDB, and the CEO and co-founder of 21 PetroSaudi (“PETROSAUDI CEO”), a Saudi national, signed on behalf of PetroSaudi. 22 53. The JVA provided further that 1MDB’s $1 billion contribution was to be 23 made in “immediately available cleared funds to a bank account in the name of, and 24 nominated by, [the 1MDB-PetroSaudi JV] with BSI Bank.” 25 54. BSI Bank is a private bank based in Switzerland that maintained a branch 26 in Singapore. The JVA required that 1MDB and PSI officials be joint signatories on the 27 BSI Bank account into which 1MDB’s contribution to the Joint Venture was to be 28 deposited. The JVA expressly required that, upon 1MDB’s contribution of $1 billion, 17 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 18 of 136 Page ID #:18 1 the 1MDB-PetroSaudi JV was to “deliver to 1MDB evidence, in the name of BSI Bank, 2 establishing that 1MDB was a joint beneficial owner” of the account at BSI Bank into 3 which 1MDB’s contribution to the 1MDB-PetroSaudi JV was deposited. 4 55. The JVA also required that by September 30, 2009 (within two days of the 5 JVA’s execution), the 1MDB-PetroSaudi JV pay to PetroSaudi $700 million, 6 purportedly as repayment for a loan PetroSaudi made to the 1MDB-PetroSaudi JV. 7 According to the JVA, PetroSaudi agreed to make this loan to the Joint Venture just 8 three days prior to execution of the JVA, that is, on or about September 25, 2009. 9 56. Notwithstanding the reference in the JVA to a “loan” from PetroSaudi to 10 the Joint Venture, PetroSaudi made no such loan, based on the following facts and 11 circumstances, among others: 12 a. On September 25, 2009, before the JVA was signed, PetroSaudi 13 purportedly agreed to make the loan, which was due to be repaid on or about September 14 30, 2009. There is no apparent commercial purpose for this loan. 15 b. The bank account maintained by the Joint Venture at J.P. Morgan 16 (Suisse), into which 1MDB ultimately transferred $300 million, was not opened until 17 September 30, 2009, after the loan was purportedly made. 18 19 20 c. Although PetroSaudi opened an account at J.P. Morgan (Suisse) in June 2009, this account was “inactive” until December 2009. d. The Malaysian Public Accounts Committee (“PAC”), a committee 21 within the Malaysian Parliament responsible for examining the accounts of public 22 authorities and other bodies administering public funds, conducted an examination of 23 1MDB and its financial activities, and it produced a public and non-public report of its 24 findings. According to an English-language translation of the public report available on 25 the PAC’s website, the auditors tasked by the PAC to examine 1MDB’s activities were 26 unable to validate documents related to PetroSaudi’s purported $700 million loan to the 27 1MDB-PetroSaudi JV and were unable to verify the existence of such a loan. 28 18 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 19 of 136 Page ID #:19 1 2 3 e. As detailed below, the $700 million went to an account controlled by LOW, not by PetroSaudi. 57. Regardless of the veracity of the purported loan from PetroSaudi to 1MDB- 4 PetroSaudi JV, the Position Paper that was presented to the 1MDB Board did not 5 disclose the existence of any loan, or any anticipated loan, from PetroSaudi to the Joint 6 Venture. Nor did the Position Paper disclose the need for 1MDB to direct any portion of 7 its $1 billion investment in the Joint Venture to PetroSaudi (rather than the Joint 8 Venture) in repayment of a loan. Indeed, at the time that the 1MDB Board authorized 9 the $1 billion investment in the 1MDB-PetroSaudi JV on September 26, 2009, the Board 10 was not told that any portion of the $1 billion investment in 1MDB-PetroSaudi JV would 11 be transferred to any entity other than the Joint Venture. Even though Article 75 of 12 1MDB’s Articles of Association requires that 1MDB’s Board approve all investment 13 decisions, the Board did not approve the use of 1MDB’s investment in the Joint Venture 14 to repay PetroSaudi for a loan, let alone to pay an entity unaffiliated with PetroSaudi. 15 58. On or about September 30, 2009, 1MDB issued a press release entitled, 16 “[PSI] and [1MDB] in US $2.5 billion joint-venture partnership, opens new door to FDIs 17 [Foreign Direct Investments.]” The press release stated: 18 The [1MDB-PetroSaudi JV’s] objective is to seek, explore, and participate 19 in business and economic opportunities which result in the enhancement and 20 promotion of the future prosperity and long-term sustainable economic 21 development of Malaysia. It is expected to actively make investment in the 22 renewable energy sector. The [1MDB-PetroSaudi JV] is also expected to be 23 a vehicle for investments from the Middle East into the region, thereby 24 giving Malaysia the edge in drawing investments from the cash- and 25 resource-rich region. 26 27 28 19 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 20 of 136 Page ID #:20 1 D. FALSE REPRESENTATIONS TO BANKS CAUSING $700 2 MILLION DIVERSION FROM 1MDB TO THE GOOD STAR 3 ACCOUNT 4 59. As set forth below, members of 1MDB’s Senior Management Team, 5 including 1MDB OFFICERS 1 and 2, made material misrepresentations and omissions 6 to Deutsche Bank officials in order to cause Deutsche Bank to divert $700 million of 7 1MDB’s funds to the Good Star Account. 8 60. On or about September 30, 2009, a letter signed by 1MDB OFFICER 1 was 9 delivered “BY HAND” to Deutsche Bank in Malaysia instructing the Bank to transfer (i) 10 $300 million to an account at J.P. Morgan (Suisse), S.A. in Switzerland (the “$300 11 million wire transfer”) and (ii) $700 million to an account at RBS Coutts in Switzerland 12 (the “$700 million wire transfer”). The instructions specified the account numbers for 13 the two destination accounts but did not identify account names or beneficiaries. 14 61. J.P. Morgan Chase Bank (“J.P. Morgan”) records show that the Swiss J.P. 15 Morgan account referenced in the instructions to Deutsche Bank (that is, the account that 16 was to receive the $300 million wire transfer) belonged to an account held in the name of 17 the 1MDB-PetroSaudi JV (hereinafter, the “J.P. Morgan JV Account”). 18 62. RBS Coutts records show that the RBS Coutts account referenced in the 19 instructions to Deutsche Bank (that is, the account that was to receive the $700 million 20 wire transfer) was the Good Star Account. 21 63. These two transactions were to be carried out as foreign exchange 22 transactions, in which Deutsche Bank, on behalf of 1MDB, was to exchange an 23 equivalent sum of Malaysian Ringgit (“MYR”) for $1 billion in U.S. dollars. 24 64. In an email dated September 30, 2009, at 1:09 p.m., a 1MDB official 25 represented to a Deutsche Bank employee (the “Deutsche Bank Employee”), that the 26 “beneficiar[y]” of the $300 million wire transfer was the Joint Venture and the 27 “beneficiar[y]” of the $700 million wire was PetroSaudi. In that same email, the 1MDB 28 20 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 21 of 136 Page ID #:21 1 official indicated to Deutsche Bank that, “[i]n order to avoid any unforeseen 2 circumstance, we are not incorporating the name of the beneficiary in our instruction 3 letter and please follow our instruction according.” 4 65. Under Malaysian law, 1MDB was required to obtain approval from Bank 5 Negara, Malaysia’s Central Bank, before completing either of the ordered wire transfers. 6 On or about September 30, 2009, at approximately 2:05 p.m., the Acting Deputy 7 Director of Bank Negara’s Foreign Exchange Administration Department sent a letter 8 via facsimile to 1MDB OFFICER 1 (the “Bank Negara Letter”). In this letter, Bank 9 Negara acknowledged that “the funds for the approved investment will be remitted to 10 PetroJV’s account maintained with J.P. Morgan SA and RBS Coutts Bank Ltd.” The 11 reference to “PetroJV” was intended to refer to the 1MDB-PetroSaudi JV. 12 66. Later that same day, 1MDB OFFICER 1 provided a copy of the Bank 13 Negara Letter to Deutsche Bank, prior to Deutsche Bank’s initiation of the $700 million 14 wire transfer. 15 67. On September 30, 2009, at approximately 2:39 p.m., the Deutsche Bank 16 Employee, a Deutsche Bank supervisor (“Deutsche Bank Supervisor”), and 1MDB 17 OFFICER 1 had a telephone conversation regarding the requested $700 million wire 18 transfer. During this conversation, 1MDB OFFICER 1 falsely represented that the 19 beneficiary of the $700 million wire was PetroSaudi. In truth, the beneficiary of the wire 20 was Good Star. Their exchange, conducted in English, was as follows: 21 22 1MDB OFFICER 1 Hey, No [mah], I, whatever mistake they’ve made you cannot go back [ask] them. They [already] give you approval from [Bank Negara] all the way to the top. Deutsche Bank Supervisor Um-hum . . . 1MDB OFFICER 1 Uh. You want to, hang on, this one ___. The ___ is asking me to go and send it now. 23 24 25 26 27 28 21 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 22 of 136 Page ID #:22 1 Deutsche Bank Supervisor Okay, okay, okay. Let, let, let me just convince my compliance person. This is, I’m, I’m fine with you about the compliance side, uh, it’s. It’s a little bit sticky with this. But let me just try – 1MDB OFFICER 1 Good. Deutsche Bank Supervisor --and convince her 1MDB OFFICER 1 Yeah, and __ I don’t know how to answer you know, that’s why I’m under tremendous pressure – 1MDB OFFICER 1 Then, they going to be so upset ____? Deutsche Bank Supervisor Um-hum-hum. But it is okay for us to call [Bank Negara] if we need to, huh? Just, just to uh – 14 1MDB OFFICER 1 Yeah, yeah, yeah, yeah, yeah, yeah 15 Deutsche Bank Supervisor Because it’s not my decision. 1MDB OFFICER 1 But— Deutsche Bank Supervisor --[it’s my] compliance uh person. 1MDB OFFICER 1 [You tell your] compliance. Deutsche Bank Supervisor Yeah. 24 1MDB OFFICER 1 If they don’t send it [ah] 25 Deutsche Bank Supervisor Yeah. 1MDB OFFICER 1 ____ will [blame] them [___], the deal goes off, you know. 2 3 4 5 6 7 8 9 10 11 12 13 16 17 18 19 20 21 22 23 26 27 28 22 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 23 of 136 Page ID #:23 1 Okay, okay, okay. 2 Deutsche Bank Supervisor 3 1MDB OFFICER 1 No, I’m serious you know, you know this ___? Deutsche Bank Supervisor No, no, I understand. Understand. Yeah. 1MDB OFFICER 1 You know, if, do whatever you [can] do, either they send it now or they, they, they double [back], or whatever, but they cannot wait for this, you know. 10 Deutsche Bank Employee Yeah, just, just, just one quick question [1MDB OFFICER 1], what— 11 1MDB OFFICER 1 But if they’re going to overkill on the compliance thing uh they have to be responsible you know. Deutsche Bank Supervisor I understand that. Uh— Deutsche Bank Employee Yes, that’s, that’s fine. But just one question as to why is it going to [PetroSaudi] itself? Is there any particular reason? 18 1MDB OFFICER 1 Actually – 19 Deutsche Bank Employee Ah— 1MDB OFFICER 1 --for us, we don’t care. Because 700 million I mean it’s a __ advance [that’s] owed to them. Deutsche Bank Employee Oh, I see. 1MDB OFFICER 1 Alright. They give us instructions, send [whatever] they want to send it. ____. Deutsche Bank Employee Ah, I see, I see. Okay. Okay. 4 5 6 7 8 9 12 13 14 15 16 17 20 21 22 23 24 25 26 27 28 23 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 24 of 136 Page ID #:24 1 1MDB OFFICER 1 And for us what we care about making sure they have issue us one billion dollars [shares]. Ah. 4 Deutsche Bank Employee 5 1MDB OFFICER 1 --and the three hundred million goes to the account where [we control]. Ah. Okay. That, that’s— 8 Deutsche Bank Employee 9 1MDB OFFICER 1 ____ to them. This is where they want to send, they want to send to Timbuktu also, we don’t care. Deutsche Bank Employee Yeah, that’s fine. Alright. We just wanted to understand the background. 1MDB OFFICER 1 So [if] your compliance is overkill in terms _________ -- Deutsche Bank Employee Yeah. 1MDB OFFICER 1 --the message— 2 3 6 7 10 11 12 13 14 15 16 17 **** 18 19 68. On September 30, 2009, at approximately 2:51 p.m., the Deutsche Bank 20 Supervisor had a telephone conversation with a Bank Negara official (“Bank Negara 21 Official”). Their conversation included the following exchange: 22 23 Deutsche Bank Supervisor I understand that. I understand that. Okay. So you know in terms of account it’s basically a business decision for the [client] [now]. Bank Negara Official Yeah, yeah, yeah, because we, we, I mean we do not know of the, all that when there applied to us, they got 1.5 billion will be put by the Saudi MDB, one billion by us, uh by Malaysia – Um-hum, um-hum— 24 25 26 27 28 Deutsche Bank 24 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 25 of 136 Page ID #:25 1 Supervisor 2 Bank Negara Official 3 4 5 --and that, and the crediting of the account and so on , is this their business decision, la, so long as it does not deviate from the original intention and that is not for Bank Negara to say but more of the government [la] because this is MOF’s . . . baby [la]. 6 69. When the Bank Negara Official used the words “original intention,” he/she 7 meant the $1 billion in funds that were meant to be sent to the 1MDB-PetroSaudi JV. 8 70. At approximately 3:14 p.m., Deutsche Bank transmitted to RBS Coutts a 9 SWIFT payment order requesting that $700 million be credited to an account at RBS 10 Coutts.7 The SWIFT message did not identify the owner of the RBS Coutts account, but 11 the account number listed on the SWIFT as the recipient of the $700 million wire 12 transfer was the number of the Good Star Account. 13 71. Approximately six minutes later, at about 3:20 p.m., Deutsche Bank 14 transmitted a second SWIFT payment order to J.P. Morgan (Suisse) requesting that $300 15 million be credited to an account at J.P. Morgan (Suisse). As with the other SWIFT 16 message, the SWIFT message for the $300 million wire transfer did not identify the 17 owner of the beneficiary account. The account number listed in the SWIFT for the $300 18 million wire transfer matched the number for the J.P. Morgan JV Account. 19 72. At approximately 5:08 p.m., a Deutsche Bank compliance officer sent an 20 email to the Deutsche Bank Employee seeking “email confirmation from 1MDB of the 21 names of the beneficiaries to both payments.” The compliance officer also advised the 22 Deutsche Bank Employee that Bank Negara approved the wire transfers for the purpose 23 of allowing 1MDB to acquire an equity interest in the 1MDB-PetroSaudi JV. The email 24 25 26 27 28 7 SWIFT is an abbreviation for Society for Worldwide Interbank Financial Telecommunication, and a SWIFT payment order is a standard electronic communication used by and between financial institutions to conduct monetary transactions. 25 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 26 of 136 Page ID #:26 1 indicates the compliance officer’s belief that the $700 million wire transfer was being 2 sent to PetroSaudi (rather than Good Star). 3 73. On October 1, 2009, the Deutsche Bank Employee sent an email to other 4 Deutsche Bank employees stating: “The 3rd party payment by 1MDB to [the 1MDB- 5 PetroSaudi JV] and [PetroSaudi] is approved from my end.” This email indicated the 6 Deutsche Bank Employee’s similar belief that the $700 million wire transfer was being 7 sent to PetroSaudi. 8 9 74. On October 2, 2009, an RBS Coutts employee with the Regulatory Risk department emailed a Deutsche Bank employee, stating: “Please urgently confirm the 10 full name of the final beneficiary of the funds per e-mail and authenticated swift (see 11 details below) in order for us to apply the funds.” (Emphasis in original). In the email, 12 the RBS Coutts employee further explained that “[w]e are not in a position to credit the 13 funds without full beneficiary details (full name, address, account no.).” 14 75. Later, at approximately 6:19 p.m., the Deutsche Bank Employee sent an 15 email to 1MDB OFFICERS 1 and 2, explaining, “I believe RBS [Coutts] needs 16 confirmation on the beneficiary’s name in order to complete their internal risk mitigating 17 processes as no name was[.] We will await your instructions on whether to reveal the 18 beneficiary name and address (please provide) to RBS Coutts.” 19 76. Thereafter, at approximately 7:51 p.m., 1MDB OFFICER 2 emailed the 20 Deutsche Bank Employee and 1MDB OFFICER 1 with authorization to disclose to RBS 21 Coutts that the beneficiary of the $700 million wire was Good Star. However, 1MDB 22 OFFICER 2 misrepresented the nature of the relationship between Good Star and 23 PetroSaudi. Specifically, 1MDB OFFICER 2 stated: “This payment was for beneficiary 24 ‘Good Star Limited’ in their SWIFT. Good Star is owned 100% by PetroSaudi 25 International Limited.” In reality, however, Good Star’s sole shareholder and the 26 signatory on its account was LOW – not PetroSaudi. Approximately 30 minutes later, 27 1MDB OFFICER 2 emailed the Deutsche Bank Employee and provided Good Star’s 28 26 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 27 of 136 Page ID #:27 1 address as P.O. Box 1239, Offshore Incorporation, Victoria, Mahe, Republic of 2 Seychelles. 3 77. Finally, at approximately 9:30 p.m., Deutsche Bank submitted to RBS 4 Coutts a revised SWIFT instruction identifying “Good Star Limited” as the beneficiary 5 of the $700 million wire transfer, located at P.O. Box 1239, Offshore Incorporation, 6 Victoria, Mahe, Republic of Seychelles. 7 78. On or about October 23, 2009, Deutsche Bank informed Bank Negara 8 through a regulatory filing that the purpose of the $700 million wire transfer was for an 9 “equity investment in [a] new entity.” 10 79. J.P. Morgan Chase bank records confirm that on or about September 30, 11 2009, the Good Star Account received the $700 million wire transfer from Deutsche 12 Bank. A U.S. correspondent bank account at J.P. Morgan processed the $700 million 13 wire transfer to the Good Star Account at RBS Coutts. 14 80. The 1MDB-PetroSaudi JV never had an account at RBS Coutts. Rather, as 15 stated above, the 1MDB-PetroSaudi JV maintained an account at J.P. Morgan, and that 16 account received only $300 million of the total $1 billion that was to be invested in the 17 Joint Venture. 18 19 E. FUNDS FROM 1MDB BOARD OF DIRECTORS 20 21 22 23 24 25 26 27 1MDB OFFICERS 1 AND 2 CONCEAL MISAPPROPRIATION OF 81. Even after the $700 million wire transfer was made into the Good Star Account, 1MDB OFFICERS 1 and 2 continued to make material misrepresentations to the 1MDB Board relating to the true identity of the beneficiary of the $700 million wire transfer. 82. The 1MDB Board met in Selangor, Malaysia on October 3, 2009. The individuals present at the meeting included 1MDB OFFICERS 1 and 2, the Chairman of the 1MDB Board, 1MDB’s Secretary, and three directors of the 1MDB Board. 28 27 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 28 of 136 Page ID #:28 1 83. The 1MDB Board minutes for that meeting indicate that 1MDB OFFICER 2 2 made false and misleading representations to the Board in explaining key details 3 relating to the $700 million wire transfer. For example, 1MDB OFFICER 2 informed 4 the Board that, “[o]f the US$1 billion [1MDB] was supposed to inject into the [Joint 5 Venture], . . . US$700 million was remitted to PSI directly as settlement of all the 6 amounts owed by the JVCo. to PSI.” This statement is false and misleading for several 7 reasons: 8 9 10 a. wire transfer was sent directly to PetroSaudi was false. As noted above in paragraph 79, these funds were sent to an account held in the name of Good Star. 11 12 First, the representation by 1MDB OFFICER 2 that the $700 million b. Second, as noted above, Good Star is not a subsidiary of PetroSaudi, nor was PetroSaudi a beneficial owner of the Good Star Account. 13 c. Third, a loan does not appear to have ever been made by PetroSaudi 14 to the 1MDB-PetroSaudi JV and, thus, the $700 million wire transfer could not have 15 been a “settlement of all the amounts owed by the” 1MDB-PetroSaudi JV. 16 d. Fourth, notwithstanding the fact that 1MDB OFFICER 2, who signed 17 the JVA on or about September 28, 2009, was aware that the JVA included contractual 18 terms requiring the 1MDB-PetroSaudi JV to repay PetroSaudi $700 million for a 19 purported loan, neither 1MDB OFFICER 1 nor 1MDB OFFICER 2 disclosed this fact to 20 the1MDB Board prior to October 3, 2009 – after the $700 million wire had already been 21 diverted to the Good Star Account. 22 84. Even without having been told that the $700 million wire was sent to an 23 account held in the name of Good Star, 1MDB Board members raised concerns about the 24 transaction as represented by 1MDB OFFICER 2. Specifically, the minutes state, in 25 pertinent part: 26 The concerns raised by the [1MDB Board] that the recent developments in 27 the joint venture was not in accordance with the [1MDB Board’s] 28 28 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 29 of 136 Page ID #:29 1 understanding of the process, based on representations made at the previous 2 Special [1MDB Board] Meetings. Specifically: 3 4 (a) The [1MDB Board] was not consulted on the change of plans 5 to remit $700 million to [PetroSaudi]. The [1MDB Board’s] understanding 6 was for the full USA $1 billion to be wired to the joint bank account under 7 the name of the [Joint Venture] and the [Joint Venture’s] board of directors 8 makes the decision to remit US$700 million to [PetroSaudi]. 9 10 *** 11 12 (d) The substantial investment of US$1billion should have merited a 13 more thorough thought and due diligence process. 14 15 85. After expressing these concerns, 1MDB Board members asked that 1MDB 16 determine whether it would be possible to seek the return of the $700 million “so that the 17 funds could be remitted through the original agreed channel,” namely, the BSI Bank 18 account held in the name of the 1MDB-PetroSaudi JV. 19 86. The 1MDB Board instructed 1MDB OFFICER 2 and 1MDB management 20 “not to deviate from the [1MDB Board’s] instructions and what the [1MDB Board] has 21 agreed/understood to be the procedures of a particular transaction.” 22 87. The 1MDB Board met again in Selangor, Malaysia, on October 10, 2009. 23 The individuals present at the meeting included 1MDB OFFICER 2, the Chairman of the 24 1MDB Board, 1MDB’s Secretary, and three directors of the 1MDB Board. 25 88. The 1MDB Board minutes for this meeting indicate that 1MDB OFFICER 2 26 sought to respond to the concerns raised by the 1MDB Board at the October 3, 2009 27 meeting. Specifically, 1MDB OFFICER 2 represented that the $700 million wire 28 transfer was sent “directly to” PetroSaudi in order to repay PetroSaudi’s purported $700 29 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 30 of 136 Page ID #:30 1 million loan to the Joint Venture. 1MDB’s management explained that, pursuant to 2 clause 4.5 of the JVA, 1MDB was required to repay PetroSaudi’s loan by September 30, 3 2009. 4 89. In fact, clause 4.5 of the JVA required the 1MDB-PetroSaudi JV, rather 5 than 1MDB itself, to repay PetroSaudi for the purported loan. Furthermore, by the 6 JVA’s terms, the repayment of the loan could be made only after notice was provided to 7 both 1MDB and PetroSaudi and both entities approved the repayment. However, prior 8 to October 3, 2009, the 1MDB Board was never told about a purported loan from 9 PetroSaudi to the 1MDB-PetroSaudi JV. 10 90. At no point prior to the execution of the Joint Venture, or in the Board 11 meetings held shortly thereafter to discuss the transaction, did 1MDB OFFICER 1 or 2 12 inform the 1MDB Board that funds from 1MDB had been sent to Good Star. 13 14 F. DIVERTED TO LOW’S GOOD STAR ACCOUNT IN 2011 15 16 AN ADDITIONAL $330 MILLION IN 1MDB FUNDS WAS 91. An additional $330 million in 1MDB funds was subsequently funneled into 17 the Good Star Account in 2011 under false pretenses. Although these funds were 18 intended to be transmitted to the 1MDB-PetroSaudi JV under a financing agreement 19 signed by 1MDB and the 1MDB-PetroSaudi JV, the funds were instead transmitted via 20 international wire transfers to the Good Star Account. Although 1MDB officials were 21 aware that these funds were not being sent to an account maintained by the 1MDB- 22 PetroSaudi JV, this fact was withheld from Deutsche Bank. J.P. Morgan correspondent 23 bank records demonstrate that funds were transferred to LOW’s Good Star Account. 24 92. On or about June 14, 2010, the 1MDB-PetroSaudi JV entered into a loan 25 agreement with 1MDB called a Murabaha Financing Agreement (“MFA”). Under the 26 MFA, 1MDB agreed to provide the 1MDB-PetroSaudi JV with a loan at an annual rate 27 of return of 8.75%. 28 30 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 31 of 136 Page ID #:31 1 93. On or about May 12, 2011, the 1MDB-PetroSaudi JV issued to 1MDB a 2 Notice of Drawing (the “Notice”). The Notice was signed by the PETROSAUDI CEO 3 on behalf of the 1MDB-PetroSaudi JV and requested that 1MDB transmit $330 million 4 to the Good Star Account. 5 94. J.P. Morgan correspondent bank records show that between May 20 and 6 October 25, 2011, $330,000,000 was transferred from 1MDB to the Good Star Account 7 over four wire transfers (“$330 million wire transfers”). Each of these transfers was a 8 foreign exchange transaction completed through financial institutions in Malaysia, 9 including AmBank and Deutsche Bank, and was processed through a U.S. correspondent 10 bank account at J.P. Morgan Chase. The following is a summary of the 2011 transfers 11 from 1MDB to the Good Star Account: 12 Table 1: 2011 Transfers from 1MDB to the Good Star Account 13 Date8 Amount 15 May 20, 2011 16 $30,000,000 Originating Bank AmBank U.S. Correspondent Bank J.P. Morgan Chase May 23, 2011 $65,000,000 AmBank J.P. Morgan Chase May 27, 2011 $110,000,000 Deutsche Bank J.P. Morgan Chase Oct. 25, 2011 $125,000,000 AmBank J.P. Morgan Chase 14 17 18 19 20 21 22 95. On or about May 23, 2011, 1MDB’s Chief Financial Officer wrote a letter 23 to a Bank Negara official misrepresenting the identity of the recipient of the 1MDB 24 funds being disbursed under the MFA. In the letter, the 1MDB official thanked Bank 25 26 27 28 8 The dates of wire transfers may vary, even among different records for the same wire transfer, based, for example, on time zone differences and/or the lapse of time between the initiation of the wire, the crediting of funds to the correspondent bank, and the crediting of funds to the beneficiary bank. 31 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 32 of 136 Page ID #:32 1 Negara for having approved the transmission of $330 million to the 1MDB-PetroSaudi 2 JV and explained that “1MDB-PSI has requested us to remit the funds to the account of 3 its parent company, PetroSaudi International Limited (“PSI Limited”) instead of the 4 account of 1MDB-PSI.” In truth, however, these funds were not being sent to 5 PetroSaudi, but to Good Star. 6 96. On or about May 25, 2011, the PETROSAUDI CEO sent 1MDB a letter on 7 behalf of PetroSaudi and the 1MDB-PetroSaudi JV. This letter confirmed that the 8 account at RBS Coutts in Switzerland had received the $30 million and the $65 million 9 wires referenced in the table above. However, the PETROSAUDI CEO requested that 10 1MDB send to RBS Coutts a “SWIFT CLARIFICATION” explaining that the 11 beneficiary of these wire transfers was actually “Account No. XXX.2000” (the Good 12 Star Account) and not “Petrosaudi International Limited.”9 13 97. The PETROSAUDI CEO’s statement in the May 25, 2011, letter that the 14 funds were not going to “Petrosaudi International Limited” was materially inconsistent 15 with the representation made by 1MDB OFFICER 2 in the September 30, 2009, email to 16 Deutsche Bank, described above in paragraph 76, in which 1MDB OFFICER 2 stated 17 that Good Star was a wholly-owned subsidiary of PetroSaudi. 18 98. On or about May 27, 2011, 1MDB OFFICER 2 signed a letter of 19 instruction, addressed to Deutsche Bank, requesting that an additional $110 million be 20 transferred from 1MDB to the Good Star Account. 21 22 23 24 25 26 27 28 9 All but the last four digits of the account number identified in PETROSAUDI CEO’s May 25, 2011, letter have been redacted pursuant to Federal Rule of Civil Procedure 5.2. The full account number listed in the PETROSAUDI CEO’s letter matches the account number for the Good Star Account. 32 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 33 of 136 Page ID #:33 1 G. FUNDS MISAPPROPRIATED FROM 1MDB WERE 2 TRANSFERRED TO THE CO-FOUNDER OF PETROSAUDI AND 3 THEREAFTER TO MALAYSIAN OFFICIAL 1 4 99. 5 6 7 8 9 10 11 12 13 fraudulently diverted from 1MDB to the Good Star Account. An additional $330 million was fraudulently diverted from 1MDB to the Good Star Account between May and October 2011. According to J.P. Morgan Chase banking records, between February and June of 2011, approximately $24,500,000 of these funds was transferred to an account at Riyad Bank maintained in the name of a Saudi prince who, together with the PETROSAUDI CEO, co-founded PetroSaudi (“PETROSAUDI CO-FOUNDER”). From those funds, $20,000,000 was then transferred, within days, to an account belonging to MALAYSIAN OFFICIAL 1. 100. J.P. Morgan correspondent bank records show two transfers of funds from 14 15 16 17 18 19 20 21 22 23 24 25 26 27 As set forth above, between September and October 2009, $700 million was the Good Star Account to the account of the PETROSAUDI CO-FOUNDER at Riyad Bank (“PSI Co-Founder Account”): (i) one for approximately $12,500,000 on or about February 18, 2011, and (ii) another for approximately $12,000,000 on or about June 10, 2011. 101. Correspondent bank records from J.P. Morgan Chase and Wells Fargo show that days after the transfers from the Good Star Account to the PSI Co-Founder Account, approximately $20,000,000 in funds was transferred from the PSI Co-Founder Account to an account at AmBank, whose beneficiary is listed as “AMPRIVATE BANKINGMR” (“AMPRIVATE BANKING-MR Account”). More specifically, the AMPRIVATE BANKING-MR Account received (i) a wire of approximately $10 million on or about February 23, 2011, roughly five days after the PETROSAUDI CO-FOUNDER received $12.5 million from the Good Star Account, and (ii) another wire for approximately $10 million on or about June 13, 2011, roughly three days after the PETROSAUDI CO- 28 33 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 34 of 136 Page ID #:34 1 FOUNDER received $12 million from the Good Star Account. These funds transferred 2 into and out of the PSI Co-Founder Account are summarized below: 3 Table 2: Transfers from Good Star to the PETROSAUDI CO-FOUNDER to 4 5 MALAYSIAN OFFICIAL 1 Credits into PSI Debits from PSI 6 Co-Founder Account Co-Founder Account 7 From 8 9 Date 2/18/2011 Good Star Account Amount Amount $12,500,000 2/23/2011 $10,000,000 AMPRIVATE BANKING-MR Account $10,000,000 AMPRIVATE BANKING-MR Account 10 11 6/10/2011 12 13 6/13/2011 Good Star Account To $12,000,000 14 15 16 102. Plaintiff alleges on information and belief that MALAYSIAN OFFICIAL 1 17 is the ultimate beneficiary of the AMPRIVATE BANKING-MR Account. The 18 AMPRIVATE BANKING-MR Account is the same account that later received certain 19 payments totaling approximately $681 million in March 2013. As set forth in Paragraph 20 263 below, the Attorney General of Malaysia has publicly stated that the account into 21 which these $681 million payments were made belonged to MALAYSIAN 22 OFFICIAL 1. 23 24 25 26 27 28 34 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 35 of 136 Page ID #:35 1 H. LOW LAUNDERED APPROXIMATELY $368 MILLION IN FUNDS 2 DIVERTED FROM THE 1MDB JOINT VENTURE INTO THE 3 UNITED STATES 4 5 103. LOW laundered hundreds of millions of dollars in proceeds from the 6 foregoing unlawful activity into the United States for the personal benefit of himself and 7 his associates. 8 9 104. Between approximately October 21, 2009, and October 13, 2010, eleven wires totaling approximately $368 million were sent from the Good Star Account to an 10 Interest on Lawyer Account held by the law firm Shearman & Sterling LLP in the United 11 States (“Shearman IOLA Account”).10 12 13 14 15 16 17 105. More particularly, bank records show the following credits to the Shearman IOLA Account from the Good Star Account: Table 3: Transfers from Good Star to the Shearman IOLA Account Date 10/21/2009 1/20/2010 18 19 20 Amount $148,000,000 $117,000,000 Notations on Wire Transfer N/A A.PH52A1 C.PARK.W .NY (BID-USD 35M) B.AV. INVEST.(USD37.5M) C.STAKE V.H (USD 15M) D.VICEROY ST. M.H(USD 10M) E.PEARL ENERGY (THAILAND) USD 19.5M 21 22 23 24 25 26 27 28 10 Bank records demonstrate that Shearman maintained one control account into which each of the wire transfers from the Good Star Account referenced above was transferred. In addition to this control account, Shearman maintained a number of client escrow accounts to which some client funds were distributed after their receipt. References to the Shearman IOLA Account refer to the control account. 35 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 36 of 136 Page ID #:36 1 2 Date Amount Notations on Wire Transfer 3/3/2010 $35,059,875 A)PH52A 1 CENT WW NYC(RENOV USD10M) B)AVIATION WORKCAPINC (5M+10559875) C)INC VICEROY HOTEL GR (USD 7M) D)INC RENOV BUDGET BHH (USD2.5M) 5/13/2010 $15,780,000 BID PROCESS - ACQUISITION OF THE EDEN HOTEL ROME (PREPARATION OF PARTIAL PORTION OF EQUITY) 6/23/2010 $8,599,985 BID PROCESS-ASCQUISITION OF 94 PICCADILLY RD LONDON (IN AND OUT CLUB)FOR HOTEL DEVELOPMENT + SERVICRESIDENCES (PROOF OF FUNDS) 8/17/2010 $2,799,985 N/A 8/31/2010 $653,985 9/3/2010 $8,645,985 9/28/2010 $5,999,985 9/28/2010 $17,999,985 ACQUISITION OF ASSETS/PROPERTY PAYMENT FOR EXTENSION ACQUISITION OF ASSETS/PROPERTY PARTBALANCE PAYMENT ACQUISITION OF ASSETS/PROPERTY (2 PCT BID. NEW YORK HELMSLEY HOTEL - USD300M ACQUISITION OF ASSETS /PROPERTY (FULL BALANCE PAYMENT + RENOVATION) 10/13/2010 $7,999,985 Total: $368,539,770.00 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 ACQUISITION OF ASSETS/PROPERTY BID HELMSLEY HOTEL NYC USD300M TRANCHE 2 26 27 28 106. As described in further detail in Section V of the Complaint, funds transferred to the Shearman IOLA Account were then used by LOW and others to 36 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 37 of 136 Page ID #:37 1 purchase assets and invest in business interests for their personal benefit, including, but 2 not limited to, luxury real estate, a Beverly Hills hotel, a private jet, and a major 3 Hollywood motion picture. 4 107. In addition, funds transferred to Shearman were also used to fund the 5 luxurious lifestyles enjoyed by LOW and his associates. For instance, between on or 6 about October 30, 2009, and June 18, 2010, a period of less than eight months, more 7 than $85 million in funds traceable to the Good Star Account was wired from the 8 Shearman IOLA Account to Las Vegas casinos, luxury yacht rental companies, business 9 jet rental vendors, a London interior decorator, and associates and family members of 10 11 LOW, among others. 108. For example, between October 2009 and October 2010, misappropriated 12 1MDB funds sent from the Good Star Account into the Shearman IOLA Account were 13 transferred as follows: (i) approximately $12,000,000 in wires to Caesars Palace, a Las 14 Vegas casino; (ii) approximately $13,400,000 in wires to the Las Vegas Sands Corp., the 15 owner of the Venetian Las Vegas, another casino; (iii) a wire for approximately 16 $11,000,000 to “Eric” TAN Kim Loong, an associate of LOW; (iv) approximately 17 $4,000,000 in wires to Jet Logic Ltd., a luxury jet rental service; (v) a wire for 18 approximately $3,500,000 to LOW’s sister; (vi) a wire for approximately $3,080,000 to 19 Rose Trading, a Hong Kong jeweler; (vii) approximately $2,698,000 in wires to 20 Yachtzoo, a luxury yacht rental service; (viii) approximately $2,288,000 in wires to 21 Argent Design Ltd., a United Kingdom-based interior designer; (ix) a wire for 22 approximately $670,000 to Excel Air, a jet rental company; (x) approximately $460,000 23 in wires to Skyline Private Air, an aircraft rental company; and (xi) a wire for 24 approximately $155,000 to Billiyon Air, a jet rental company. 25 26 27 28 37 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 38 of 136 Page ID #:38 1 I. LOW TRANSFERRED APPROXIMATELY $389 MILLION IN 2 1MDB FUNDS TO ANOTHER ACCOUNT CONTROLLED BY HIM 3 BUT HELD IN THE NAME OF ABU DHABI-KUWAIT-MALAYSIA 4 INVESTMENT CORPORATION (ADKMIC) 5 6 109. Over the course of five wire transfers between June 28, 2011, and 7 September 4, 2013, approximately $389 million was transferred from the Good Star 8 Account to an account at BSI Bank in Singapore held in the name of Abu Dhabi Kuwait 9 Malaysia Investment Corp. (“ADKMIC BSI Account”). LOW is the beneficial owner of 10 11 the ADKMIC BSI Account. 110. In a document entitled “LOW FAMILY HISTORY AND BACKGROUND, 12 ORIGINS OF JYNWEL CAPITAL,” that was emailed by LOW’s brother to a New 13 York business person on or about August 13, 2013, the Low family represented that 14 “Mr. Jho Low founded the Abu Dhabi-Kuwait-Malaysia Investment Corporation in 2007 15 and together with third-party investment partners structured numerous multi-million 16 dollar buyouts with interests in construction, real estate development (Putrajaya Perdana 17 Berhad), water infrastructure (Loh & Loh Corporation Berhad), road concessions and oil 18 & gas (UBG Berhad).” 19 20 21 22 111. J.P. Morgan Chase correspondent bank account records show the following credits to the ADKMIC BSI Account from the Good Star Account: Table 4: Transfers from Good Star to ADKMIC Date Amount June 28, 2011 $55,000,000 24 September 4, 2012 $38,000,000 25 November 2, 2012 $153,000,000 26 December 27, 2012 $142,500,000 27 September 4, 2013 $456,027 23 28 38 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 39 of 136 Page ID #:39 1 As described below, the funds transferred to the ADKMIC BSI Account were then used 2 by LOW and others to acquire assets in the United States, among other things. 3 4 5 III. THE AABAR-BVI PHASE: APPROXIMATELY $1.367 BILLION IS MISAPPROPRIATED FROM 1MDB 6 A. 7 112. In 2012, approximately $1.367 billion in 1MDB funds that were raised in EXECUTIVE SUMMARY OF THE AABAR-BVI PHASE 8 two separate bond offerings were misappropriated and fraudulently diverted to bank 9 accounts in Switzerland and Singapore. In issuing these bonds, 1MDB participated in 10 the publication and disclosure of two offering circulars that contained material 11 misrepresentations and omissions relating to: 12 a. How the proceeds of these bond issuances would be used, 13 b. The nature of the relationship between the issuer (i.e., subsidiaries of 14 1MDB) and the bond’s third-party guarantor (i.e., the International 15 Petroleum Investment Company of Abu Dhabi (“IPIC”)), and 16 c. The existence of any related-party transactions connected to the 2012 bond 17 issuances, including that 1MDB officials, IPIC officials, and their associates 18 would personally benefit from the issuance of these bonds. 19 113. After more than $1 billion had been misappropriated from 1MDB between 20 2009 and 2011 in the Good Star Phase, 1MDB needed to raise additional capital to fund 21 its operations. As set forth in greater detail below, 1MDB engaged Goldman to arrange 22 and underwrite two separate bond offerings in 2012. One of the stated purposes of the 23 2012 bond issues was to raise funds to allow 1MDB to acquire certain energy assets. 24 114. IPIC, an investment fund wholly-owned by the government of Abu Dhabi, 25 guaranteed, either directly or indirectly, both 2012 bond offerings and, in exchange, a 26 nominated subsidiary of IPIC was granted an option to purchase a minority share of the 27 energy assets acquired by 1MDB. 28 39 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 40 of 136 Page ID #:40 1 115. Almost immediately after receiving the proceeds of each of the 2012 bond 2 issues, 1MDB wire transferred a substantial portion of the proceeds – totaling 3 approximately $1.367 billion between the two bond sales, or more than forty percent of 4 the net proceeds raised – to a Swiss bank account belonging to an entity called Aabar 5 Investments PJS Limited, a British Virgin Islands-registered corporation (referred to 6 herein as “Aabar-BVI”) that bears a similar name to a legitimate subsidiary of IPIC, 7 called Aabar Investments PJS (referred to herein as “Aabar”). At the time of these 8 transfers, Khadem Abdulla al-QUBAISI (“QUBAISI”) was the Managing Director of 9 IPIC and the Chairman of Aabar; and Mohamed Ahmed Badawy Al-HUSSEINY 10 (“HUSSEINY”) was the CEO of Aabar. QUBAISI and HUSSEINY were also directors 11 of Aabar-BVI. 12 116. In their audited financial statements for the year ending on March 31, 2014, 13 1MDB booked their substantial payments to Aabar-BVI as an asset rather than a 14 payment, describing it as a “refundable deposit . . . held aside as collateral for the 15 guarantee” that IPIC provided for the 2012 bonds. 16 117. Following the dismissal of QUBAISI and HUSSEINY from their positions 17 at IPIC and Aabar in 2015, IPIC and Aabar have recently clarified that Aabar-BVI is not 18 owned by either entity. 19 118. The Swiss bank account belonging to Aabar-BVI (“Aabar-BVI Swiss 20 Account”) was used to siphon off proceeds of the two 2012 bond sales for the personal 21 benefit of individuals affiliated with IPIC, Aabar, and 1MDB, as well as their associates. 22 Beginning within days of receiving funds from 1MDB, Aabar-BVI transferred a total of 23 approximately $636 million to the Singapore bank account held by Blackstone Asia Real 24 Estate Partners (“Blackstone Account”). During this same time period, Aabar-BVI 25 transferred, through multiple overseas investment funds, an additional approximately 26 $465 million to the Blackstone Account. The beneficial owner of the Blackstone 27 Account was identified in bank records as “Eric” TAN Kim Loong (“TAN”), a 28 Malaysian national and an associate of LOW. 40 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 41 of 136 Page ID #:41 1 119. Funds transferred to the Blackstone Account by Aabar-BVI were 2 subsequently distributed to officials of IPIC, Aabar, and 1MDB. Between approximately 3 May and November 2012, shortly after Blackstone’s receipt of funds from the Aabar- 4 BVI Swiss Account, Blackstone transferred $472,750,000 into a Luxembourg account 5 beneficially owned by QUBAISI. During roughly the same time period, Blackstone 6 transferred $66,600,000 into two different accounts beneficially owned by HUSSEINY. 7 In October and November 2012, Blackstone transferred $30,000,000 to an account 8 belonging to MALAYSIAN OFFICIAL 1. Finally in December 2012, Blackstone 9 transferred $5 million to a Swiss account beneficially owned by 1MDB OFFICER 3, 10 11 who was then 1MDB’s General Counsel and Executive Director of Group Strategy. 120. Shortly after receiving proceeds of the two 2012 bond sales from 1MDB, 12 Aabar-BVI also transferred $238,000,000 to a Singapore bank account belonging to Red 13 Granite Capital, an entity owned by Riza Shahriz Bin Abdul AZIZ (“AZIZ”). AZIZ is a 14 relative of MALAYSIAN OFFICIAL 1 and a friend of LOW. Among other things, 15 AZIZ used these funds to purchase luxury real estate in the United States and the United 16 Kingdom for his personal benefit, and to fund his movie production company, Red 17 Granite Pictures. 1MDB has disclaimed any investment interest in Red Granite Pictures. 18 19 20 21 22 B. IN 2012, 1MDB ISSUED $3.5 BILLION IN BONDS IN TWO SEPARATE OFFERINGS ARRANGED BY GOLDMAN 1. May 21, 2012, Bond Issue 121. At least as early as January 2012, officials at 1MDB approached Goldman 23 for financial advice in connection with 1MDB’s anticipated acquisition of certain power 24 assets in Malaysia. 25 122. On or about March 2, 2012, 1MDB Energy Limited (“1MDB Energy”), a 26 wholly-owned subsidiary of 1MDB, entered into a Sale and Purchase Agreement to 27 acquire Tanjong Energy Holdings Sdn Bhd (“Tanjong Energy”), a power production 28 company, from Tanjong Power Holdings Sdn Bhd (“Tanjong Power”) for MYR 8.5 41 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 42 of 136 Page ID #:42 1 billion, or approximately $2.755 billion U.S. dollars. 1MDB planned to raise MYR 6 2 billion of this MYR 8.5 billion through the local bank market.11 3 123. 1MDB engaged Goldman to assist in securing financing for the remaining 4 MYR 2.5 billion necessary to complete the Tanjong deal. By letter dated March 19, 5 2012, 1MDB engaged Goldman, through its Singapore office, as the “sole bookrunner 6 and arranger” for debt financing in connection with its capital needs for the Tanjong 7 acquisition. The engagement letter was signed by 1MDB OFFICER 2 and a Managing 8 Director of Goldman Sachs (Singapore) Pte. (“Goldman Managing Director”). Within 9 Goldman, this bond deal was referred to by the name “Project Magnolia.” 10 11 12 124. 1MDB OFFICER 3 served as a primary point of contact between 1MDB and Goldman concerning the Project Magnolia bond transaction. 125. Electronic communications among Goldman employees during the lead-up 13 to the May 21, 2012, bond closing date reflect that employees at Goldman offered 14 differing information about the nature of LOW’s relationship to 1MDB and/or his role in 15 the bond deal and the procurement of the IPIC guarantee: 16 17 a. In an email dated March 27, 2012, a managing director at Goldman- Asia referred to LOW as “the 1MDB Operator or intermediary in Malaysia.” 18 b. In approximately early April 2012, other Goldman employees 19 discussed whether LOW was involved in the Project Magnolia deal on behalf of 1MDB. 20 In an email dated April 3, 2012, a Goldman employee noted “that Jho Low is also 21 known to have close friends/ contacts in Abu Dhabi.” In an email response dated April 22 3, 2012, another Goldman employee wrote: “[Goldman Managing Director] said Jho 23 Low [was] not involved at all in deal as far as he aware [sic] but that Low was present 24 when [Goldman Managing Director] met . . . [the] Chairman of IPIC, in Abu Dhabi.” 25 26 27 28 11 Hereinafter, unless otherwise specified, references to 1MDB include 1MDB’s wholly-owned subsidiaries. 42 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 43 of 136 Page ID #:43 1 126. The offering circular for the Project Magnolia bonds, dated May 18, 2012, 2 indicates that 1MDB Energy issued $1.75 billion in privately-placed notes, with an 3 interest rate of 5.99% per annum, redeemable in 2022. The closing date of the bond 4 issue was May 21, 2012. The net proceeds were projected to be approximately 5 $1,553,800,000, once Goldman’s fees, commissions, and expenses were deducted. 6 127. The offering circular represented that the net proceeds of the bond issue 7 were to be used to “partially fund” the acquisition of Tanjong Energy. Of the 8 approximately $1,553,800,000 raised through the Project Magnolia bond sale, MYR 2.5 9 billion, or approximately $810 million, was designated in the offering circular for use in 10 acquiring Tanjong Energy. The remainder of the net proceeds, approximately $744 11 million, was designated for “general corporate purposes (which may include future 12 acquisitions).” 13 128. Internal documentation prepared by Goldman summarizing the bond 14 transaction indicates that the “general corporate purposes” for which the bond proceeds 15 were contemplated included “pre-fund guarantee fees to IPIC, cash on balance sheet, and 16 transaction related expenses.” 17 129. In reality, however, nearly $577 million – a sum equivalent to more than 18 one third of the net proceeds of the Project Magnolia bond offering – was diverted to 19 Aabar-BVI within one day of 1MDB’s having received the proceeds of the bond 20 offering. Nothing in the offering circular disclosed that 1MDB would transfer any of the 21 bond proceeds to Aabar-BVI, or that funds transferred to Aabar-BVI would subsequently 22 be used for the benefit of officials at 1MDB, IPIC, and Aabar, including QUBAISI, 23 IPIC’s Chairman, and HUSSEINY, Aabar’s CEO. 24 130. In exchange for Goldman’s services in arranging the bond offering and in 25 underwriting the notes, 1MDB agreed to pay Goldman: (a) a fee of 1% of the principal 26 amount of the notes, or $17.5 million, as an “Arranger Fee,” and (b) $175,000,000, as a 27 “Commission,” for a total of $192,500,000. These fees amount to roughly 11% of the 28 43 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 44 of 136 Page ID #:44 1 principal amount of the offering and were to be deducted directly from the subscription 2 proceeds of the bonds. 3 131. The notes issued by 1MBD Energy as part of Project Magnolia were 4 guaranteed by 1MDB. The notes were also jointly and severally guaranteed by IPIC, 5 which enabled 1MDB to obtain a better credit rating and, thus, a more favorable interest 6 rate on the bonds. QUBAISI signed the Representation Agreement between IPIC and 7 Goldman in which IPIC agreed to jointly guarantee the $1.75 billion in notes. Pursuant 8 to an “Interguarantor Agreement” between 1MDB and IPIC, dated May 21, 2012, 1MDB 9 agreed to “procure Ministry of Finance Inc to provide the necessary funding and support 10 to repay IPIC” any amounts payable and due under the notes. That agreement was 11 signed by QUBAISI and 1MDB OFFICER 2. 12 132. A document prepared by Goldman for IPIC entitled “IPIC: Meeting With 13 Ratings Agencies, Topics to Discuss,” characterized IPIC’s joint guarantee for the 14 1MDB bond issue as “unusual by previous IPIC standards.” It went on to indicate that 15 the guarantee was “expected to cement the strategic partnership between 1MDB and 16 IPIC which is in line with IPIC’s broader investment strategy in the energy and related 17 sectors globally and 1MDB’s mission to promote foreign direct investment into 18 Malaysia.” 19 133. The offering circular, however, contained misleading statements and 20 omitted material facts necessary to make its representations not misleading regarding the 21 consideration received by IPIC in exchange for guaranteeing 1MDB’s bonds. For 22 example, the offering circular indicated that in exchange for IPIC’s guarantee, 1MDB 23 granted “a nominated subsidiary of IPIC a right to acquire a substantial minority interest 24 of the share of capital in 1MDB Energy” within a ten-year period. In reality, however, 25 this option was actually awarded to Aabar-BVI, which was neither owned by nor 26 affiliated with IPIC, as described further below. 27 28 134. The consideration given by 1MDB in exchange for IPIC’s guarantee was set forth in a May 18, 2012, “Option Agreement” between 1MDB Energy and “Aabar 44 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 45 of 136 Page ID #:45 1 Investments PJS Limited, a company incorporated in the British Virgin Islands” (i.e., 2 Aabar-BVI). In that agreement, 1MDB Energy granted Aabar-BVI the option to 3 purchase, within a ten-year period, up to forty-nine percent (49%) of 1MDB Energy’s 4 shares in the holding company that acquired Tanjong Energy, for a maximum price of up 5 to MYR 1,225,000,000. The agreement specified that this call option was granted to 6 Aabar-BVI “[i]n consideration of [Aabar-BVI] procuring the Guarantee from IPIC and 7 the sum of United States Dollar One (USD1.00) paid by [Aabar-BVI] to [1MDB 8 Energy]. . . .” 1MDB OFFICER 2 signed the agreement on behalf of 1MDB Energy, 9 and HUSSEINY signed on behalf of Aabar-BVI. 10 2. October 19, 2012, Bond Issue 11 135. At least as early as approximately June 2012, 1MDB sought financial 12 advice from Goldman in connection with its anticipated acquisition of power assets from 13 Genting Berhad, a Malaysian entity, and sought Goldman’s assistance in raising an 14 additional tranche of capital to acquire those assets. As with the Project Magnolia bond 15 deal, 1MDB elected to have the bond issue fully underwritten by Goldman for an 16 additional fee. Within Goldman, this private placement bond transaction was referred to 17 by the name “Project Maximus.” 18 19 20 136. 1MDB OFFICER 3 served as the primary point of contact between 1MDB and Goldman concerning the Project Maximus transaction. 137. 1MDB entered into an agreement to purchase power assets from Genting 21 Berhad (“Genting”) on or about August 13, 2012. That same day, 1MDB created 22 another wholly-owned subsidiary called “1MDB Energy (Langat) Limited” (“1MDB 23 Energy Langat”), for the purposes of holding the power assets and issuing debt securities 24 to fund the acquisition Genting power assets. 25 138. The offering circular for Project Maximus, dated October 17, 2012, 26 indicated that 1MDB issued $1.75 billion in bonds through its second private placement 27 with Goldman, with a closing date of October 19, 2012. The notes had an interest rate of 28 5.75% per annum and were redeemable in 2022. The net proceeds of the bond sale – 45 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 46 of 136 Page ID #:46 1 once Goldman’s fees, commissions, and expenses were deducted – were listed in the 2 offering circular as approximately $1,636,260,000. 3 139. The offering circular represented that the net proceeds of the Project 4 Maximus bond sale were to be used by 1MDB Energy Langat, in part, to satisfy its 5 obligations under its agreement to acquire power assets from Genting Berhad. 6 Specifically, the offering circular represents that 1MDB Energy Langat intended to use 7 approximately $692,357,349 of the approximately $1,636,260,000 in net proceeds for 8 the purpose of the Genting acquisition, and it intended to use the balance of the proceeds 9 “for general corporate purposes (which may include future acquisitions).” 10 140. In truth, however, as explained in paragraphs 152-153 below, $790,354,855 11 – a sum equivalent to roughly half of the net proceeds of the Project Maximus bond 12 offering – was diverted to Aabar-BVI on or about the same day that 1MDB received the 13 proceeds of this bond sale. As with Project Magnolia, the offering circular for Project 14 Maximus nowhere disclosed that nearly half of the net bond proceeds would be 15 transferred to Aabar-BVI, in the form of “collateral” or otherwise, or that funds 16 transferred to Aabar-BVI would subsequently be used for the personal benefit of 17 officials at IPIC, Aabar, and 1MDB, including QUBAISI and HUSSEINY. 18 141. 1MDB guaranteed the notes issued by 1MDB Energy Langat. Although 19 IPIC did not directly guarantee the Project Maximus notes as it had with the Project 20 Magnolia bonds, it nevertheless agreed to privately secure the bonds on a bilateral basis 21 with Goldman. No reference to IPIC’s indirect guarantee was included in the offering 22 circular. The consideration given for that guarantee was set forth in an October 17, 23 2012, agreement entitled “Collaboration Agreement (Option),” entered into between 24 1MDB Energy Langat and “Aabar Investments PJS, a joint stock company organized 25 under the laws of Abu Dhabi.” That agreement stated that, “[i]n consideration of Aabar 26 Investments procuring the Guarantee from IPIC and the sum of United States Dollar One 27 (USD1.00) paid by Aabar Investments to [1MDB],” 1MDB granted Aabar the option to 28 46 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 47 of 136 Page ID #:47 1 acquire a forty-nine percent (49%) interest in 1MDB Energy Langat within a ten year 2 period. 3 4 142. Taken together, in 2012, 1MDB issued $3.5 billion in bonds that were underwritten by Goldman and guaranteed by IPIC. 5 6 C. BOND SALES WAS DIVERTED TO AND THROUGH THE AABAR- 7 BVI SWISS ACCOUNT 8 9 A SUBSTANTIAL PORTION OF THE PROCEEDS OF THE 2012 143. Over the course of several months, a large portion of the proceeds of both of 10 the 2012 bond sales – approximately $1.367 billion in total – was transferred from 11 1MDB to a bank account at BSI Bank in Switzerland held in the name of Aabar-BVI. 12 Plaintiff alleges on information and belief that the funds transferred to the Aabar-BVI 13 Swiss Account by 1MDB were not held for the benefit of 1MDB, IPIC, or Aabar. 14 Rather, the Aabar-BVI Swiss Account was used to unlawfully divert proceeds of both 15 the Project Magnolia and Project Maximus bonds, which were thereafter used, after 16 having passed through various accounts, to make substantial payments to QUBAISI, 17 HUSSEINY, MALAYSIAN OFFICIAL 1, and 1MDB OFFICER 3. 18 1. On or about May 22, 2012, Within Roughly One Day of the First 19 Bond Issue, Approximately $577 Million in 1MDB Funds Was 20 Diverted to the Aabar-BVI Swiss Account 21 144. The closing date for the Project Magnolia bonds was on or about May 21, 22 2012. Documentation associated with the bond deal shows that a total of $650,000,000 23 was to be deducted from the proceeds and remitted directly to accounts designated by 24 Tanjong Power, the entity from which 1MDB Energy had agreed to purchase Tanjong 25 Energy. 26 27 145. On or about May 21, 2012, a total of $907,500,000 in proceeds from the bond sale was transferred, at the direction of Bank of New York–London, from an 28 47 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 48 of 136 Page ID #:48 1 account at Bank of New York Mellon–New York in the United States to an account at 2 Falcon Private Bank Limited (“Falcon Bank”) held by 1MDB Energy. 3 146. Roughly one day later, on or about May 22, 2012, a wire in the amount of 4 $576,943,490 was sent from 1MDB Energy’s bank account at Falcon Bank to an account 5 at BSI Bank in Lugano, Switzerland maintained by Aabar-BVI (i.e., the “Aabar-BVI 6 Swiss Account”). This amount represents more than one third of the net proceeds from 7 the bond sale. The funds passed through correspondent bank accounts at J.P. Morgan 8 Chase and Citibank in the United States before being transferred to Aabar-BVI. 9 10 11 147. Nothing in the Project Magnolia offering circular disclosed that any funds would be sent to Aabar-BVI, let alone one third of the net bond proceeds. 148. Falcon Bank is wholly-owned by Aabar, and at the time that the 12 $576,943,490 was transferred from 1MDB Energy’s bank account at Falcon Bank to the 13 Aabar-BVI Swiss Account, HUSSEINY was Falcon Bank’s Chairman. 14 2. On or about October 19, 2012, Roughly the Same Day as the Second 15 Bond Issue, Approximately $790 Million in 1MDB Funds Was 16 Diverted to the Aabar-BVI Swiss Account 17 18 149. The proceeds from the Project Maximus bonds, which were issued on or about October 19, 2012, were transferred according to a similar pattern. 19 150. 1MDB directed that payment of the proceeds of the Project Maximus bond 20 sale, totaling $1,640,000,000, be made on October 19, 2012, to 1MDB Energy Langat’s 21 account at Falcon Bank, via Falcon Bank’s U.S. correspondent bank account at J.P. 22 Morgan Chase. 23 151. On or about October 19, 2012, 1MDB Energy Langat wired $692,174,991 24 from its account at Falcon Bank in Switzerland to an account at Citibank–Singapore 25 belonging to Genting Power Holdings Limited in connection with the purchase of power 26 assets. 27 28 152. On or about that same day (that is, October 19, 2012), 1MDB wire transferred $790,354,855 to the Aabar-BVI Swiss Account. This sum represents close to 48 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 49 of 136 Page ID #:49 1 fifty percent (50%) of the net proceeds of the October 19, 2012 bond sale. The funds 2 passed through correspondent bank accounts at J.P. Morgan Chase and Citibank in the 3 United States before being transferred to Aabar-BVI. 4 153. Nothing in the Project Maximus offering circular disclosed that any portion 5 of the funds, let alone close to fifty percent of the net proceeds of the bond sale, would 6 be funneled to Aabar-BVI in the form of “collateral” or otherwise. 7 154. Collectively, between the two 2012 bond sales, officials at 1MDB 8 transferred approximately $1.367 billion in bond proceeds to the Aabar-BVI Swiss 9 Account. This represented more than forty percent (40%) of the total net proceeds of the 10 11 12 13 two bond sales. 3. Funds Transferred to the Aabar-BVI Swiss Account Were Not Held for the Benefit of 1MDB, IPIC, or Aabar 155. Aabar Investments PJS Limited (referred to herein as “Aabar-BVI”) is an 14 entity incorporated in the British Virgin Islands (“BVI”) and is separate and distinct from 15 the similarly-named Aabar Investments PJS (referred to herein as “Aabar”), which is 16 controlled by IPIC and is incorporated in Abu Dhabi. 17 156. A Certificate of Incumbency prepared by Aabar-BVI’s registered agent in 18 the BVI indicates that Aabar-BVI was incorporated in BVI on March 14, 2012. That 19 certificate lists QUBAISI and HUSSEINY as Aabar-BVI’s Directors and “Aabar 20 Investments PJS” as its sole shareholder. 21 157. It is possible to register an entity with a name that mimics the name of an 22 existing entity, without the need to prove any relationship to the existing entity. This is a 23 common technique to lend the entity in question an appearance of legitimacy. It is also 24 possible to incorporate an entity in the BVI without providing evidence of the entity’s 25 true beneficial ownership and without providing evidence of the relationship between the 26 entity and the shareholder listed in the incorporation records. 27 158. Irrespective of any apparent nominal relationship between Aabar-BVI and 28 Aabar reflected in incorporation records, Aabar-BVI was not a legitimate subsidiary of 49 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 50 of 136 Page ID #:50 1 Aabar or IPIC operating within the bounds of any authority granted by Aabar or IPIC, 2 and the funds transmitted from 1MDB to the Aabar-BVI Swiss Account were not held in 3 that account for the benefit of 1MDB, IPIC, or Aabar. 4 159. Neither of the offering circulars contain any mention of an agreement by 5 1MDB to pay Aabar-BVI, either as a premium or as collateral, more than forty percent 6 (40%) of the net proceeds from the two 2012 bond sales in order to secure the 7 guarantees. This information would have been material to the transactions, because it 8 would have significantly affected 1MDB’s liquidity, as well as its ability to engage 9 successfully in the business ventures described in the offering circulars, and thereby 10 increased the risk of default. 11 160. As noted in Paragraph 56, the Malaysian Public Accounts Committee 12 (“PAC”) initiated an audit of certain 1MDB financial transactions and produced a public 13 report of its findings. Auditors working at the direction of the PAC concluded that the 14 $1.367 billion “security deposit” payments made to Aabar-BVI in 2012 were “made 15 without the approval of the 1MDB Board of Directors.” 16 161. On or about April 11, 2016, IPIC and Aabar issued a statement to the 17 London Stock Exchange in response to media reports indicating that a BVI entity called 18 Aabar Investments PJS Limited had received substantial payments from 1MDB. In that 19 statement, IPIC and Aabar stated that, “Aabar BVI was not an entity within either 20 corporate group” and that neither IPIC nor Aabar “has received any payments from 21 Aabar BVI. . . .” 22 162. In response to IPIC’s statement to the London Stock Exchange, 1MDB 23 issued a press release on April 11, 2016, in which 1MDB indicated that it paid Aabar- 24 BVI “substantial sums” in 2012, as recorded in its financial statements. That same 25 release also asserted that, “1MDB company records show documentary evidence of the 26 ownership of Aabar BVI and of each payment made, pursuant to various legal 27 agreements that were negotiated with Khadem Al Qubaisi in his capacity as Managing 28 50 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 51 of 136 Page ID #:51 1 Director of IPIC & Chairman of Aabar and/or with Mohamed Badawy Al Husseiny, in 2 his capacity as CEO of Aabar.” 3 4 5 163. QUBAISI and HUSSEINY were dismissed from their positions at IPIC and Aabar in 2015. 164. In June 2016, IPIC filed its consolidated financial statements for the year 6 ending December 31, 2015, with the London Stock Exchange. In those financial 7 statements, IPIC indicated that it “understands that other companies outside the group’s 8 corporate structure were incorporated in other offshore jurisdictions using variations of 9 the ‘Aabar’ name. The Group is investigating these entities further.” IPIC reiterated that 10 neither it nor Aabar were affiliated with, or received payments from, Aabar-BVI. 11 Finally, IPIC indicated that after 1MDB defaulted on two interest payments due under 12 the 2012 notes in the first half of 2016, IPIC made interest payments totaling $103 13 million on 1MDB’s behalf “pursuant to its obligations in respect of the Guarantees.” 14 165. As set forth below, funds transferred from 1MDB to the Aabar-BVI Swiss 15 Account were distributed, inter alia, to officials at IPIC, Aabar, and 1MDB, including 16 QUBAISI and HUSSEINY, with several payments occurring within days of the receipt 17 of 1MDB funds by Aabar-BVI. Plaintiff alleges on information and belief that the 18 Aabar-BVI Swiss Account was used to conceal and to facilitate this unlawful diversion 19 of funds. 20 21 22 23 24 D. AABAR-BVI TRANSFERRED APPROXIMATELY $1.1 BILLION TO THE BLACKSTONE ACCOUNT, BEGINNING WITHIN DAYS OF RECEIVING FUNDS FROM 1MDB 166. Of the approximately $1.367 billion 1MDB sent to Aabar-BVI by 1MDB, 25 approximately $1.1 billion was thereafter transferred, either directly or indirectly via 26 overseas investments funds, into the Blackstone Account. The Blackstone Account was 27 controlled by TAN, a close associate of LOW. Plaintiff alleges on information and 28 51 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 52 of 136 Page ID #:52 1 belief that the Blackstone Account was used as a transit account to improperly distribute 2 funds to individuals affiliated with 1MDB, IPIC, and Aabar. 3 1. Aabar-BVI Transferred Approximately $636 Million Directly to the 4 Blackstone Account, Beginning Within Days of Receiving Funds from 5 1MDB 6 167. Between approximately May 25, 2012, and December 14, 2012, five wire 7 transfers totaling $636,000,000 were sent from the Aabar-BVI Swiss Account to an 8 account at Standard Chartered Bank in Singapore held in the name of Blackstone Asia 9 Real Estate Partners (“Blackstone”). These wire transfers were processed through 10 correspondent bank accounts at Standard Chartered Bank and Citibank in the United 11 States. The approximate dates and amounts of these five wires appear below: 12 Table 5: Wire Transfers from Aabar-BVI Swiss Account to Blackstone 13 14 15 Date Amount Sending Party Receiving Party 5/25/2012 $295,000,000 Aabar-BVI Blackstone 7/25/2012 $133,000,000 Aabar-BVI Blackstone 10/23/2012 $75,000,000 Aabar-BVI Blackstone 11/23/2012 $95,000,000 Aabar-BVI Blackstone 12/14/2012 $39,000,000 Aabar-BVI Blackstone 16 17 18 19 20 168. TAN was identified as the beneficial owner of the Blackstone Account and 21 an authorized signatory on the account. The account was originally opened in the name 22 of Foreign FX Trading Limited. The account name was changed to Blackstone Asia 23 Real Estate Partners on or about May 26, 2011. 24 169. TAN is a friend and associate of LOW. Plaintiff alleges on information and 25 belief, however, that TAN’s only connection to 1MDB was his relationship with LOW. 26 170. Bank statements show that prior to the wire transfer of $295,000,000 from 27 Aabar-BVI on or about May 25, 2012, the account balance for the Blackstone Account 28 was $532,981. 52 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 53 of 136 Page ID #:53 1 171. Plaintiff alleges on information and belief that Blackstone was a shell 2 corporation created for the purpose of maintaining a bank account to funnel diverted 3 money, based on the following facts and circumstances, among others: 4 a. The flow of money into and out of the Blackstone Account is not 5 consistent with what can reasonably be characterized as regular business activity. For 6 example, the account did not have the types of debits and credits consistent with 7 legitimate business activity, including, for example, transfers to vendors, payroll, or 8 receipt of proceeds from customers. 9 b. Blackstone made extensive use of a money exchange business in 10 Singapore called Raffles Cash Exchange. Between approximately July 2011 and 11 February 2013, twenty wires were sent from the Blackstone Account to Raffles Cash 12 Exchange, totaling approximately $12,800,000. Frequent use of currency exchange 13 brokers, especially for large sums and where the entity already maintains an account at a 14 major bank capable of processing currency exchanges, is a technique commonly used 15 by individuals engaged in money laundering and other unlawful conduct to move 16 money in a way that is less likely to be traced by law enforcement and regulatory 17 officials. 18 c. Blackstone’s full name – Blackstone Asia Real Estate Partners – is 19 similar, though not identical, to the name of a major real estate private equity firm, 20 Blackstone Real Estate. Blackstone Real Estate is an affiliate of the well-known 21 private investment firm Blackstone Group – an entity listed on the New York Stock 22 Exchange – and has, according to its website, $101 billion in assets under management. 23 The practice of utilizing a bank account held by an entity with a name that mimics a 24 well-known commercial enterprise is a technique commonly employed to lend the 25 appearance of legitimacy to transactions that might otherwise be subject to additional 26 scrutiny by the financial institutions involved, for example, because of the size of the 27 transaction or because of the role of a politically-exposed person or entity in the 28 transaction. 53 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 54 of 136 Page ID #:54 1 2. Aabar-BVI Transferred an Additional Approximately $455 Million to 2 the Blackstone Account Via Overseas Investment Funds 3 172. Within days of Aabar-BVI’s receipt of proceeds from the Project Maximus 4 bond offering, an additional $455,000,000 was transferred from the Aabar-BVI Swiss 5 Account to the Blackstone Account via two overseas investment funds. 6 173. On or about October 22, 2012 – roughly six days after the Project Maximus 7 bond issue and four days after Aabar-BVI received approximately $790 million from 8 1MDB Energy Langat – Aabar-BVI sent approximately $75 million to a bank account at 9 ING Bank N.V. in Amsterdam belonging to Enterprise Emerging Markets Fund 10 (“Enterprise”). On or about the same day, Aabar-BVI also sent approximately $291 11 million to another bank account at ING Bank N.V. in Amsterdam belonging to 12 Cistenique Investment Fund (“Cistenique”). On or about November 2, 2012, Aabar-BVI 13 sent an additional approximately $97 million to Enterprise. In the case of each of these 14 three payments, the funds were transferred from Aabar-BVI via the clearing company 15 Citco, before being transferred on to either Enterprise or Cistenique. 16 17 18 174. Enterprise and Cistenique are relatively small investment funds located in Curacao that have other customers and hold investments unrelated to 1MDB. 175. Shortly after Cistenique and Enterprise received funds from Aabar-BVI, 19 each transferred a substantially similar amount to the Blackstone Account. More 20 particularly: 21 a. On or about October 24, 2012, roughly two days after receiving 22 approximately $291,000,000 from Aabar-BVI, Cistenique transferred $285,000,000 to 23 the Blackstone Account. 24 b. On or about October 24, 2012, approximately two days after 25 receiving approximately $75,000,000 from Aabar-BVI, Enterprise transferred 26 $75,000,000 to the Blackstone Account. On or about November 8, 2012, approximately 27 six days after receiving $97,000,000 from Aabar-BVI, Enterprise transferred an 28 additional $95,000,000 to the Blackstone Account, for a total of $170,000,000. 54 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 55 of 136 Page ID #:55 1 2 176. Cistenique and Enterprise were used as intermediaries to pass $455,000,000 from Aabar-BVI to the Blackstone Account. 3 4 *** 177. In total, between May and December 2012, approximately $1.1 billion was 5 transferred directly or indirectly from the Aabar-BVI Swiss Account to the Blackstone 6 Account. 7 8 9 10 11 E. AFTER RECEIVING FUNDS FROM AABAR-BVI, BLACKSTONE DISTRIBUTED APPROXIMATELY $574 MILLION TO OFFICERS OF IPIC, AABAR, AND 1MDB 178. Once funds were transferred from Aabar-BVI to Blackstone, they were used 12 to make payments to QUBAISI and HUSSEINY, who served as officers of both Aabar 13 and Aabar-BVI, to MALAYSIAN OFFICIAL 1, and to 1MDB OFFICER 3. The 14 distribution of these funds from the Blackstone Account for the personal benefit of 15 officials involved in the bond deal further evidences a misappropriation of public funds 16 and the diversion of the bond proceeds from their intended purpose. 17 179. Neither of the offering circulars for the 2012 bonds contained any 18 disclosure that a substantial portion of the proceeds of the bonds would be paid to 19 officials of IPIC, Aabar, and 1MDB. This fact would have been material to the bond 20 transaction, as it would have alerted investors to the possibility of conflicts of interest 21 and related-party transactions. The representation that the proceeds of the two bond 22 deals could be used for “other corporate purposes” of 1MDB does not encompass the use 23 of those funds for the personal benefit of officials of IPIC, Aabar, or 1MDB. 24 180. Although both offering circulars also contained boilerplate language about 25 the limits of any “forward-looking statements,” this boilerplate language similarly did 26 not encompass the possibility that 1MDB would radically depart from the stated 27 intended use of the bond proceeds almost immediately after the closing dates for each 28 offering. More specifically, each offering circular indicated generically that any 55 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 56 of 136 Page ID #:56 1 “forward-looking statements” contained in the circular, such as those statements 2 containing “will” or “expect,” were “reasonable” at the time of the offering circular but 3 were not meant to give “assurance that these expectations will prove to be correct” in the 4 future. This boilerplate language was intended, among other things, to give 1MDB 5 business flexibility to respond to changed circumstances in the future; it did not, 6 however, contemplate or convey the possibility that 1MDB would almost immediately 7 begin diverting the proceeds of the bond sale to Aabar-BVI and thereafter to accounts 8 beneficially owned by officials of 1MDB, IPIC, and Aabar. 9 1. 10 11 Blackstone Transferred Approximately $473 Million to an Account Controlled by QUBAISI 181. Between approximately May 29, 2012, and November 30, 2012, four wires 12 totaling $472,750,000 were sent from the Blackstone Account to an account at Bank 13 Privee Edmond de Rothschild (“Bank Rothschild”) in Luxembourg maintained in the 14 name of Vasco Investments Services SA (“Vasco Account”). These wires were 15 processed through a correspondent bank account at Standard Chartered Bank in the 16 United States. As shown in the table below, each of these four wire transfers was made 17 within a matter of days after the Blackstone Account received funds from Aabar-BVI, 18 including two of the four that were made within about ten days of Aabar-BVI’s receipt 19 of funds from 1MDB Energy: 20 Table 6: Chronology of Wire Transfers to Vasco Investments 21 22 in Relation to Other Related Transfers Date Sending Party Receiving Party Amount 5/22/2012 5/25/2012 5/29/2012 1MDB Energy Aabar BVI Blackstone Aabar BVI Blackstone Vasco Investments $576,943,490 $295,000,000 $158,000,000 7/25/2012 8/1/2012 Aabar BVI Blackstone Blackstone Vasco Investments $133,000,000 $100,750,000 23 24 25 26 27 28 56 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 57 of 136 Page ID #:57 1 10/19/2012 10/2210/24/2012 10/2210/24/2012 10/23/12 10/29/12 1MDB Energy Langat Aabar-BVI (via Enterprise) Aabar-BVI (via Cistenique) Aabar BVI Blackstone 11/23/2012 11/30/2-12 Aabar BVI Blackstone 2 3 4 5 6 7 8 9 10 Aabar BVI $790,354,855 Blackstone $75,000,000 Blackstone Blackstone Vasco Investments $285,000,000 $75,000,000 $129,000,000 Blackstone Vasco Investments $95,000,000 $85,000,000 182. Vasco Investments Services SA is a BVI entity affiliated with QUBAISI, and QUBAISI is the beneficial owner of the Vasco Account. 11 183. QUBAISI used a portion of the $472,250,000 transferred into the Vasco 12 Account from Blackstone to acquire real property in the United States worth roughly 13 $100 million, as described further in Section V. The assets purchased with funds from 14 the Vasco Account were not held by or used for the benefit of 1MDB or 1MDB’s 15 subsidiaries, nor were the assets held by or used for the benefit of IPIC or Aabar. 16 184. QUBAISI’s receipt of proceeds from 1MDB’s 2012 bond sales for his own 17 personal benefit is in contravention to his charge as Managing Director of IPIC. 18 Pursuant to IPIC’s Articles of Association, approved on November 30, 1999, “[n]either 19 the Chairman nor the other Board members shall have a direct or indirect interest in the 20 contracts and projects entered into, carried out or intended to be entered into or carried 21 out by the Company and the Company shall not grant them any financial facilities.” To 22 the extent that QUBAISI purported to be acting in his capacity as Managing Director of 23 IPIC in connection with the above-described transactions relating to Aabar-BVI, 24 including the receipt of 1MDB funds into the Aabar-BVI Swiss Account and the transfer 25 of funds through the Blackstone Account to his own Vasco Account, he was acting ultra 26 vires. 27 28 185. Upon information and belief, at the time that LOW, TAN, and QUBAISI transferred or caused the transfer of funds from the Aabar-BVI Swiss Account to 57 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 58 of 136 Page ID #:58 1 Blackstone using a U.S. correspondent bank account at Standard Chartered Bank, as well 2 as at the time that LOW, TAN, and QUBAISI transferred or caused the transfer of funds 3 from Blackstone to the Vasco Account using a U.S. correspondent bank account at 4 Standard Chartered Bank, as well as at the time that QUBAISI transferred or caused the 5 transfer of funds from the Vasco Account into the United States for the purchase of real 6 property, LOW, TAN, and QUBAISI knew that the funds had been misappropriated 7 from 1MDB and/or IPIC, and they intended to deprive 1MDB and/or IPIC of ownership 8 over those funds. 9 2. 10 11 12 13 Blackstone Transferred $66.6 Million to an Account Controlled by HUSSEINY 186. Between May and December 2012, entities belonging to HUSSEINY, thenCEO of Aabar, also received $66,600,000 from the Blackstone Account. 187. Between approximately May 29, 2012, and December 3, 2012, Blackstone 14 sent four separate wire transfers, totaling $55,000,000, to an account at BHF Bank in 15 Frankfurt, Germany, held in the name of Rayan Inc. (“Rayan”). Each of these four wire 16 transfers was processed through a U.S. correspondent bank account at Standard 17 Chartered Bank. These wire transfers are summarized below: 18 Table 7: Wire Transfers from Blackstone to Rayan 19 20 21 22 23 24 Date Sending Party Receiving Party Amount 5/29/2012 Blackstone Rayan $30,000,000 7/13/2012 Blackstone Rayan $5,000,000 11/2/2012 Blackstone Rayan $10,000,000 12/3/2012 Blackstone Rayan $10,000,000 25 188. HUSSEINY is the beneficial owner of the Rayan Account. 26 189. The first wire transfer from Blackstone to Rayan in the amount of 27 $30,000,000 occurred roughly seven days after 1MDB transferred $576,943,490 to 28 Aabar-BVI, and roughly three days after Aabar-BVI transferred $295,000,000 to 58 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 59 of 136 Page ID #:59 1 Blackstone. The same day that Blackstone transferred $30,000,000 to HUSSEINY’s 2 Rayan Account (that is, May 29, 2012), Blackstone separately transferred $158,000,000 3 to QUBAISI’s Vasco Account. 4 190. On or about December 18, 2012 – four days after Aabar-BVI transferred 5 $39,000,000 into the Blackstone Account – Blackstone sent $10,100,000 to an account at 6 Bank of America in Texas held in the name of MB Consulting LLC (“MB Consulting 7 Account”). The payment details on the wire read: “PAYMENT FOR SERVICES.” 8 9 10 11 12 13 14 15 16 191. HUSSEINY is the beneficial owner of the MB Consulting Account and the only authorized signatory on the account. 192. The MB Consulting Account received another wire transfer of $1,500,000 from the Blackstone Account on or about January 22, 2013. 3. Blackstone Transferred at Least $30 million to an Account Belonging to MALAYSIAN OFFICIAL 1 193. Blackstone also transferred at least $30,000,000 to an account belonging to MALAYSIAN OFFICIAL 1 shortly after receiving funds from Aabar-BVI. 194. On or about October 30, 2012 – roughly seven days after Blackstone 17 received $75,000,000 directly from Aabar-BVI and roughly six days after it received 18 $360,000,000 indirectly from Aabar-BVI via Enterprise and Cistenique – Blackstone 19 transferred $5,000,000 into an account at AmBank in Malaysia held in the name of 20 “AMPRIVATE BANKING MR.” 21 195. That bank account belongs to MALAYSIAN OFFICIAL 1 and is the same 22 account that received $20,000,000 from the PETROSAUDI CO-FOUNDER in 2011, 23 within days of the receipt by the PETROSAUDI CO-FOUNDER of funds from Good 24 Star, as set forth in Section II.G. 25 196. On or about November 19, 2012 – less than two weeks after Blackstone 26 received $95,000,000 from Aabar-BVI via Enterprise – Blackstone transferred 27 $25,000,000 to the same AMPRIVATE BANKING-MR Account belonging to 28 MALAYSIAN OFFICIAL 1. 59 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 60 of 136 Page ID #:60 1 4. 2 3 Blackstone Transferred $5 million to an Account Controlled by 1MDB OFFICER 3 197. On or about December 6, 2012, a wire in the amount of $5,000,000 was 4 sent from the Blackstone Account to an account at Falcon Bank in Zurich maintained in 5 the name of River Dee International SA (“River Dee Account”). 6 7 198. 1MDB OFFICER 3 is the beneficial owner of the River Dee Account at Falcon Bank. 8 9 *** 199. On or about February 22, 2013, not long after funds were distributed to the 10 various officials as described above, the balance of the Blackstone Account fell to zero 11 and the account had no further transactions thereafter. 12 200. Blackstone was used as an intermediary to obscure the fact that 1MDB 13 bond proceeds were being sent from Aabar-BVI – of which QUBAISI and HUSSEINY 14 were directors – to accounts that were beneficially owned by QUBAISI, HUSSEINY, 15 MALAYSIAN OFFICIAL 1, and 1MDB OFFICER 3. 16 201. The funds sent to accounts belonging to QUBAISI, HUSSEINY, 17 MALAYSIAN OFFICIAL 1, and 1MDB OFFICER 3, as described above, were 18 unlawfully misappropriated from 1MDB and/or IPIC. 19 20 21 22 F. AABAR-BVI SENT APPROXIMATELY $238 MILLION TO AN ACCOUNT CONTROLLED BY AZIZ 202. Between June 18, 2012, and November 4, 2012, $238,000,000 was 23 transferred directly from the Aabar-BVI Swiss Account to an account controlled by 24 AZIZ, a relative of MALAYSIAN OFFICIAL 1. From there, the funds were used to 25 acquire nearly $100 million in real property for the personal benefit of AZIZ and to fund 26 Red Granite Pictures, AZIZ’s movie production company. 27 28 60 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 61 of 136 Page ID #:61 1 203. Aabar-BVI sent three wire transfers totaling $238,000,000 to an account at 2 BSI Singapore held in the name of Red Granite Capital Limited (“Red Granite Capital 3 Account”). These wires are summarized below: 4 5 6 7 8 Table 8: Wire Transfers from Aabar-BVI to Red Granite Capital 9 Date Sending Party Receiving Party Amount 11 6/18/2012 Aabar-BVI Red Granite Capital $133,000,000 12 10/23/2012 Aabar-BVI Red Granite Capital $60,000,000 13 11/14/2012 Aabar-BVI Red Granite Capital $45,000,000 10 14 15 204. Red Granite Capital is a BVI-incorporated entity owned by AZIZ. In his 16 2012 U.S. tax return, a copy of which was obtained from AZIZ’s accounting firm, AZIZ 17 listed Red Granite Capital’s “principal business or profession” as “Motion Pictures.” 18 Bank records reflect that AZIZ is also beneficial owner of the Red Granite Capital 19 Account in Singapore. 20 1. AZIZ Claimed that Approximately $94.3 Million of the $238 Million 21 from Aabar-BVI, which AZIZ Used to Purchase Real Estate, Was a 22 “Gift” from Aabar-BVI 23 205. AZIZ used more than $94,000,000 of the $238,000,000 that Aabar-BVI 24 transferred to Red Granite Capital in 2012 to purchase real estate in the United States 25 and the United Kingdom. AZIZ claimed, including in his 2012 U.S. tax return, that this 26 money was a “gift” from Aabar-BVI. 27 28 206. Shortly after receiving funds from the Aabar-BVI Swiss Account, AZIZ sent two wires totaling $94,300,000 from his Red Granite Capital Account to the 61 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 62 of 136 Page ID #:62 1 Shearman IOLA Account in the United States. The first wire, in the amount of 2 $58,500,000, was sent on or about June 20, 2012, roughly two days after Red Granite 3 Capital received $133,000,000 from Aabar-BVI. The second wire, in the amount of 4 $35,800,000, was sent on or about November 15, 2012, roughly one day after Red 5 Granite Capital received $45,000,000 from Aabar-BVI. In total, AZIZ caused 6 $94,300,000 to be transferred from his Red Granite Capital Account to a Shearman 7 IOLA Account in the United States in which funds were held for his benefit. 8 9 10 207. AZIZ used this $94,300,000 to acquire three pieces of real estate – one in New York City, one in Beverly Hills, and one in London, United Kingdom. 208. The source and nature of the funds received from Aabar-BVI and used by 11 AZIZ to purchase real property was a topic of discussion among AZIZ’s accountants at 12 Nigro Karlin Segal Feldstein & Bolno (“NKSFB”), a Los Angeles-based business and 13 accounting firm, in connection with the preparation of his 2012 tax return: 14 a. In an email dated October 13, 2013, a partner at NKSFB wrote: “We 15 need something for our files that explains why AABAR Investments gave a gift to Riza 16 for $94,300,050 and it was not income. Is someone from the company related to 17 Riza? . . .” 18 b. By email dated the same day, a Managing Director at NKSFB who 19 acted as the business manager for AZIZ and Red Granite (“Red Granite Business 20 Manager”), responded: “It is the personal holding company of a family friend.” 21 c. The partner, in a response sent within an hour, indicated in relevant 22 part: “The funds came from an investor in Red Granite Capital, I cannot sign the returns 23 without proof it is not income to Riza. The firm would be put at risk, these numbers are 24 too high.” 25 209. In response to this email exchange, the Red Granite Business Manager, 26 through AZIZ, procured a letter, purporting to be from HUSSEINY and bearing his 27 signature. The text of that letter reads: 28 62 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 63 of 136 Page ID #:63 1 This letter is intended to confirm that the transfer of $94,500,000.00 which 2 consisted of a wire transfer on June 18, 2012 to BSI Bank, Ltd. (account 3 number [XXX]250A) for the benefit of Riza Aziz was intended as a gift. 4 The transfer was made for no consideration and no services were performed 5 or gift received for assets. This was a gratuitous transfer made with 6 detached and disinterested generosity based on our close personal 7 relationship.12 8 9 10 HUSSEINY’S letter purported to have been sent “[o]n behalf of Aabar Investments PJS Limited / Solution Century Limited.” 11 12 13 210. Solution Century Limited is an entity affiliated with HUSSEINY and his wife. 211. The fact that Aabar-BVI purportedly gifted approximately $94 million to 14 AZIZ on the basis of “disinterested generosity” and the “close personal relationship” 15 between AZIZ and HUSSEINY further demonstrates that Aabar-BVI was not operating 16 as a legitimate subsidiary of Aabar or IPIC and that the funds held in the Swiss Aabar- 17 BVI account were not being held for the benefit of 1MDB, Aabar, or IPIC. 18 2. 19 20 Approximately $64 Million in Funds from Aabar-BVI Was Used to Fund Red Granite Pictures 212. Funds transferred from Aabar-BVI to AZIZ’s Red Granite Capital Account 21 were also used to fund Red Granite Pictures, an investment unaffiliated with 1MDB, 22 Aabar, or IPIC. 23 24 25 26 27 28 12 Contrary to the statements in this letter, no wire was sent from Aabar-BVI to Red Granite Capital on June 18, 2012, in the amount of $94,500,00. Rather, as indicated above, the June 18, 2012 wire from Aabar-BVI to Red Granite Capital was in the amount of approximately $133,000,000. The amount claimed to be a gift, $94,500,000, is roughly equal to the amount of money that AZIZ transferred into the United States over a period of approximately five months and used to purchase personal assets. 63 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 64 of 136 Page ID #:64 1 213. Red Granite Pictures is a movie production company co-founded by AZIZ 2 in 2010, which produced several major motion pictures, including “The Wolf of Wall 3 Street,” “Friends with Kids,” and “Dumb and Dumber To.” Red Granite Pictures was 4 incorporated in California on September 30, 2010, as Red Granite Productions and 5 changed its name to Red Granite Pictures on or about June 6, 2011. Red Granite 6 Pictures’ website lists AZIZ as CEO, founder, chairman, and producer. 7 214. Between June 20, 2012 – two days after Aabar-BVI sent its first wire to Red 8 Granite Capital – and November 20, 2012, eleven wires totaling $64,000,000 were sent 9 from the Red Granite Capital Account to an account at City National Bank in the United 10 States maintained by Red Granite Pictures. 11 215. These funds transferred to Red Granite Pictures in the United States were 12 then used to fund Red Granite Picture’s operations, including the production of the film 13 “The Wolf of Wall Street,” which was released in the United States on December 25, 14 2013. 15 216. The funds sent from Aabar-BVI to Red Granite Capital, which were 16 thereafter transferred into the United States for use by Red Granite Pictures, did not 17 represent a legitimate investment by 1MDB, IPIC, or Aabar in Red Granite Pictures. 18 And balance sheets for Red Granite Pictures and Red Granite Capital show no payments 19 to 1MDB, IPIC, or Aabar indicative of any investment return. 20 217. Public statements and media interviews by relevant individuals and entities 21 also negate the existence of any legitimate investment by 1MDB, IPIC, or Aabar in Red 22 Granite Pictures. For example, on August 11, 2014, the New York Times published an 23 article entitled An Audacious Studio Rattles Hollywood, which included an interview 24 with AZIZ and Red Granite Pictures co-founder Christopher “Joey” McFarland 25 (“McFarland”). In that article, AZIZ is reported to have identified HUSSEINY as Red 26 Granite’s principle investor. He is also reported as indicating that HUSSEINY was 27 investing personal money rather than government funds. This same article appears in the 28 64 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 65 of 136 Page ID #:65 1 “News” section of Red Granite Picture’s website under the heading Riza Aziz & Joey 2 McFarland Featured in the New York Times. 3 218. In an article published by the New York Times on February 8, 2015, entitled 4 Jho Low, Well Connected in Malaysia, Has an Appetite for New York, an attorney for 5 HUSSEINY is quoted as saying that HUSSEINY’s investment in Red Granite was made 6 with “personal money.” 7 219. On April 3, 2016, 1MDB issued a press release, available on its public 8 website, denying that it had any role in investing, directly or indirectly, in Red Granite 9 Pictures. 10 3. AZIZ Transferred at least $41 Million in Funds Received from 11 Aabar-BVI to an Account That Was Then Used to Pay Gambling 12 Expenses for Himself, LOW, and TAN 13 220. Just days after the Red Granite Capital Account received funds from Aabar- 14 BVI, some of those funds were transferred to an account at Standard Chartered Bank in 15 Singapore held in the name of Alsen Chance Holdings Limited (“Alsen Chance 16 Account”). Account opening documents for the Alsen Chance Account list TAN as the 17 director of Alsen Chance. Shortly thereafter, the Alsen Chance Account was used to pay 18 gambling expenses for LOW, TAN, AZIZ, and at least one former official from 1MDB. 19 221. More particularly, on or about June 21, 2012 – roughly three days after 20 Aabar-BVI transferred $133,000,000 into AZIZ’s Red Granite Capital Account – AZIZ 21 caused $41,000,000 to be wired from his Red Granite Capital Account to the Alsen 22 Chance Account. 23 222. Roughly three weeks later, on or about July 10, 2012, a wire for 24 $11,000,000 was sent from the Alsen Chance Account to a bank account maintained by 25 Las Vegas Sands, LLC. Among other things, Las Vegas Sands owns and operates the 26 Venetian Resort-Hotel-Casino (“Venetian Casino”) in Las Vegas. The payment details 27 on the wire read: “PLAYER NO [XXX]4296.” 28 65 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 66 of 136 Page ID #:66 1 223. The Venetian Casino used customer account number XXX4296 to identify 2 LOW. On or about July 10, 2012, $11,000,000 was deposited into LOW’s account at the 3 Venetian Casino, and records show that LOW gambled there for approximately seven 4 days beginning on or about that date. 5 224. On or about July 11, 2012, an additional wire of $2,000,000 was sent from 6 the Alsen Chance Account to Las Vegas Sands LLC. The payment details on that wire 7 read: “TAN KIM LOONG PLAYER NO [XXX]8710.” The Venetian Casino Resort 8 used customer account number XXX8710 to identify TAN. 9 225. On or about July 15, 2012, LOW withdrew an aggregate cash amount of 10 $1,150,090 at the Venetian Casino: $500,000 as a withdrawal of deposit, and $650,090 11 as redemption of casino chips and other gaming instruments. Several individuals 12 gambled with LOW on this occasion, using his account. These individuals included 13 AZIZ; Red Granite Pictures co-founder McFarland; a lead actor in “The Wolf of Wall 14 Street” (“Hollywood Actor 1”); and a former Chief Investment Officer of 1MDB.13 15 16 *** 226. The use of funds traceable to proceeds of the 2012 1MDB bond sales for 17 interests unrelated to the business of 1MDB, as described above and in further detail in 18 Part V below, is not consistent with the intended use of those funds and further 19 demonstrates that funds transferred from 1MDB to the Aabar-BVI Swiss Account were 20 unlawfully diverted. 21 22 23 24 25 26 27 28 13 LOW, TAN, AZIZ and McFarland gambled together at the Venetian Casino on other occasions, including several times in 2014. 66 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 67 of 136 Page ID #:67 1 2 IV. THE TANORE PHASE: MORE THAN $1.26 BILLION IS MISAPPROPRIATED FROM 1MDB 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 A. EXECUTIVE SUMMARY OF THE TANORE PHASE 227. As set forth in greater detail in the sections that follow, in 2013, more than $1.26 billion in 1MDB funds that were raised in a third bond offering arranged by Goldman were misappropriated and fraudulently diverted to bank accounts in Switzerland and Singapore. In issuing these bonds, 1MDB participated in the publication and disclosure of an offering circular that again contained material misrepresentations and omitted material facts necessary to render its representations not misleading regarding:  How the proceeds of these bond issuances would be used, and  The existence of any related-party transactions connected to the 2013 bond issuances, including that 1MDB officials and their associates and relatives would personally benefit from the issuance of these bonds. 228. 1MDB issued an additional $3 billion in Goldman-underwritten bonds in March 2013. Notwithstanding the fact that the stated purpose of these bonds was to generate proceeds to invest in a joint venture with Aabar called Abu Dhabi Malaysia Investment Company (“ADMIC”), more than $1.26 billion in proceeds was diverted to a bank account held in the name of Tanore Finance Corporation (“Tanore Account”). As with the Blackstone Account, TAN was the beneficial owner of record for the Tanore Account. Although the account had no legitimate affiliation with 1MDB or ADMIC, 1MDB OFFICER 3 was an authorized signatory on the Tanore Account. 229. Funds transferred to the Tanore Account were distributed for the benefit of at least one public official associated with 1MDB. More particularly, very shortly after the bond offering closed, between approximately March 21, 2013, and March 25, 2013, $681,000,000 was transferred from the Tanore Account to an account belonging to 28 67 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 68 of 136 Page ID #:68 1 MALAYSIAN OFFICIAL 1. Of this amount, approximately $620 million was returned 2 to the Tanore Account on or about August 26, 2013. 3 230. 1MDB funds diverted to the Tanore Account were also used by LOW and 4 TAN to purchase artwork for their personal benefit and to purchase an interest in the 5 Park Lane Hotel for the personal benefit of LOW. The disposition of these funds was 6 not consistent with the intended use of the 2013 bond proceeds nor was it made for the 7 benefit of 1MDB or ADMIC. 8 9 B. UNDERWRITTEN BONDS FOR INVESTMENT IN A JOINT 10 VENTURE WITH AABAR 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IN MARCH 2013, 1MDB ISSUED $3 BILLION IN GOLDMAN- 231. On or about March 12, 2013, 1MDB entered into a 50:50 joint venture with Aabar known as ADMIC. According to the joint venture agreement (“ADMIC Agreement”), the formation of ADMIC was “of strategic importance to the government to government relationship between the Government of the Emirate of Abu Dhabi and the Government of Malaysia, given the strategic initiatives to be undertaken jointly by the Parties and the catalytic effect such initiatives are expected to have upon the growth and development of Malaysia and the Emirate of Abu Dhabi respectively.”14 232. Pursuant to the ADMIC Agreement, ADMIC was to be capitalized by an investment of $3 billion by 1MDB and $3 billion by Aabar. 1MDB and Aabar, as the two shareholders of the company, were to adopt an investment plan for ADMIC, to include a “five (5) year strategic roadmap for the investment policies of the Company,” as soon as practicable after formation of the company. 14 The Abu Dhabi Malaysia Investment Company (“ADMIC”) is an entity distinct from the Abu Dhabi Malaysia Kuwait Investment Corporation (“ADKMIC”). The former was a purported joint venture between 1MDB and Aabar in which the proceeds of the Project Catalyze bond were supposed to be invested, whereas the latter was an entity owned and controlled by LOW that was used to launder funds, as described in Part II.I above. 68 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 69 of 136 Page ID #:69 1 233. The ADMIC Agreement provides that “the Company [i.e., ADMIC] will 2 open and maintain bank accounts in the name of [ADMIC].” It further provides that 3 “[a]ll monies of [ADMIC], and all instruments for the payment of money to [ADMIC], 4 shall be deposited in the bank accounts of [ADMIC].” 5 234. The joint venture agreement was signed by QUBAISI, as the Chairman of 6 Aabar, and by the Chairman of 1MDB’s Board of Directors; and it was witnessed by 7 HUSSEINY, the CEO of Aabar, and by 1MDB OFFICER 2, the CEO of 1MDB. Aabar 8 appointed QUBAISI as a director of ADMIC and 1MDB appointed its Chief Financial 9 Officer. 10 235. At least as early as mid-January 2013, officials at 1MDB enlisted 11 Goldman’s assistance to finance its capital contribution to the planned joint venture 12 through privately placed debt securities. 1MDB OFFICER 3 served as a main point of 13 contact between 1MDB and Goldman on this deal. Within Goldman, this bond 14 transaction was referred to by the name “Project Catalyze.” 15 236. In a March 2013 presentation prepared for 1MDB, IPIC, and Aabar in 16 connection with the deal, Goldman set forth its understanding of 1MDB’s “key 17 objectives.” Foremost among these were “maintenance of confidentiality during 18 execution” of the deal and “speed of execution.” 19 237. 1MDB issued approximately $3 billion in bonds through its third private 20 placement with Goldman. The closing date for the bond issue was March 19, 2013. The 21 notes had a 4.4% interest rate and were redeemable in 2023. The offering circular, dated 22 March 16, 2013, listed the net proceeds of the bond sale, once Goldman’s fees, 23 commissions, and expenses were deducted, as approximately $2,716,760,000. The 24 bonds were issued by 1MDB Global Investments Limited (“1MDB Global”), a wholly- 25 owned subsidiary of 1MDB that was incorporated in the British Virgin Islands on March 26 8, 2013. 27 28 238. The Government of Malaysia provided a “Letter of Support,” dated March 14, 2013, in connection with the Project Catalyze transaction. That Letter of Support 69 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 70 of 136 Page ID #:70 1 provided, among other things, that if 1MDB failed to provide adequate capital to ensure 2 that 1MDB Global was able to service its obligations with respect to the bonds, Malaysia 3 would then “step-in to inject the necessary capital into the Issuer or make payments to 4 ensure the Issuer’s obligation in respect of the Debt are fully met.” The Letter of 5 Support also indicated that, “[t]o the fullest extent permitted by law,” Malaysia would 6 waive its sovereign immunity and submit itself to the jurisdiction of English courts in 7 connection with disputes arising out of the letter. The letter is signed by MALAYSIAN 8 OFFICIAL 1. 9 239. The offering circular represents that 1MDB Global intended to “either on- 10 lend all of the net proceeds of this Offering to ADMIC or use the net proceeds of the 11 offering to fund its investment in ADMIC, which will be a 50:50 joint venture between 12 the Issuer and Aabar.” The offering circular noted that “ADMIC has yet to adopt a 13 formal investment plan or establish investment criteria.” It further represented that 14 “ADMIC does not have any specific investment, merger, stock exchange, asset 15 acquisition, reorganization, or other business combination under consideration or 16 contemplation and ADMIC has not, nor has anyone on ADMIC’s behalf, contacted, or 17 been contacted by, any potential target investment or had any discussions, formal or 18 otherwise, with respect to such a transaction.” The circular goes on to note that, 19 “ADMIC does not currently have an investment plan or investment criteria in place. The 20 Board of Directors intends to adopt an investment plan as soon as is practicable. The 21 investment plan, and any future investments, will be made with the mutual agreement of 22 the shareholders of ADMIC,” i.e., Aabar and 1MDB. 23 240. In a press release issued on April 23, 2013, 1MDB indicated that, “[t]he 24 proceeds from the US$3 billion capital raised will be utilised for investments in strategic 25 and important high-impact projects like energy and strategic real estate which are vital to 26 the long term-economic [sic] growth of both countries.” The press release gave, as an 27 example of a future investment project, the Tun Razak Exchange (TRX). The Tun 28 70 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 71 of 136 Page ID #:71 1 Razak Exchange is a project to develop a financial center in downtown Kuala Lumpur 2 that has yet to be completed. 3 241. In truth, however, as explained below in Paragraphs 243-258, instead of 4 being used to fund ADMIC, more than $1.26 billion in bond proceeds from the 2013 5 bond offering were diverted to unrelated overseas shell company accounts, including the 6 Tanore Account at Falcon Bank in Singapore and an account opened in the name of 7 Granton Property Holdings Limited at Falcon Bank (“Granton Account”). 8 242. The offering circular also omitted material facts necessary to makes it 9 representations regarding the use of the bond proceeds not misleading, in that it failed to 10 disclose that certain individuals related to 1MDB, including MALAYSIAN OFFICIAL 11 1, would receive hundreds of millions of dollars from the proceeds of the bond sale 12 within days of its closing. This fact would have been material to the bond transaction, as 13 it would have alerted investors to the possibility of conflicts of interest and related-party 14 transactions. The representation that ADMIC had not determined how all of the bond 15 proceeds would be used did not encompass using those funds, beginning almost 16 immediately after the bond issue, for the personal benefit of individuals related to 1MDB 17 and their associates. 18 19 20 21 C. FUNDS FROM THE 2013 BOND SALE WERE DIVERTED TO THE TANORE ACCOUNT 243. Notwithstanding the fact that 1MDB represented in the offering circular and 22 its press release that the proceeds of the 2013 bond sale would be used to fund ADMIC, 23 more than $1.26 billion was diverted from the proceeds of the 2013 bond sale through 24 bank accounts controlled by TAN and held in the name of various entities, including 25 Tanore Finance Corporation and Granton Property Holdings. This approximately $1.26 26 billion in funds was neither lent to ADMIC nor used to fund 1MDB’s investment in 27 ADMIC, as represented in the bond offering circular, but instead was held and used for 28 the benefit of LOW and his associates, including public officials of 1MDB. 71 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 72 of 136 Page ID #:72 1 244. On or about March 19, 2013, a total of $2,721,000,000, representing 2 proceeds of the bond sale, was transferred from Bank of New York Mellon into the BSI 3 Lugano account of 1MDB Global in two separate wires of $2,494,250,000 and 4 $226,750,000. The payments details listed in both SWIFT messages indicate, in relevant 5 part: “ATTN [SINGAPORE BANKER 1.]” SINGAPORE BANKER 1 is the same 6 individual whose name appears in Good Star’s corporate records, as noted in Paragraph 7 45 above. At the time of the wire transfers to 1MDB Global, SINGAPORE BANKER 1 8 was employed by BSI Bank in Singapore. 9 245. Between May 21 and 27, 2013, 1MDB Global transferred a total of 10 $1,590,000,000 from its account at BSI Lugano to accounts belonging to three different 11 overseas investment funds: Devonshire Capital Growth Fund (“Devonshire”), a fund 12 located in the British Virgin Islands; Enterprise, a fund located in Curacao; and 13 Cistenique, another fund located in Curacao (collectively, the “Overseas Investment 14 Funds”). This money was routed via the clearing company Citco, before being 15 transferred into the accounts of the Overseas Investment Funds. As described in 16 Paragraphs 172-176 above, two of these three funds, Cistenique and Enterprise, were 17 used in 2012 to pass funds traceable to the Project Maximus bond proceeds from Aabar- 18 BVI to Blackstone. 19 20 21 22 246. The approximate dates and aggregated amounts of these transfers from 1MDB Global to the three Overseas Investments Funds, via Citco, are set forth below: Table 9: Wire Transfers from 1MDB Global to Overseas Investment Funds Dates Sending Party Receiving Party Amount 23 3/21/2013 1MDB Global Devonshire $646,464,649 24 3/21/13 - 3/27/2013 1MDB Global Enterprise $414,756,416 25 3/21/13 - 3/22/2013 1MDB Global Cistenique $531,090,534 26 27 28 247. Within approximately two days after 1MDB Global began its transfer of more than $1.5 billion to the Overseas Investment Funds, the Overseas Investment Funds 72 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 73 of 136 Page ID #:73 1 collectively transferred a total of $835,000,000 to the Tanore Account. The approximate 2 dates and amounts of these wires, which passed through a correspondent bank account at 3 J.P. Morgan Chase in the United States, are summarized below: 4 Table 10: Wire Transfers from Overseas Investment Funds to Tanore 5 7 3/21/2013 Sending Party Devonshire 8 3/22/2013 Enterprise 3/22/2013 Cistenique 6 Date 9 10 Sending Party Bank BSI Bank Singapore ING Bank Netherlands ING Bank Netherlands Receiving Party Amount Tanore $210,000,000 Tanore $250,000,000 Tanore $375,000,000 11 12 248. TAN opened the Tanore Account on or about November 2, 2012, and he 13 was originally its sole authorized signatory. Bank records list HUSSEINY as the 14 “referrer” for the account. 15 249. On or about March 20, 2013, one day before funds were first credited to the 16 Tanore Account from the Overseas Investment Funds, 1MDB OFFICER 3 was given 17 signing authority on the Tanore Account through the execution of a Power of Attorney 18 form signed by 1MDB OFFICER 3. A copy of the Malaysian passport belonging to 19 1MDB OFFICER 3 was included in that documentation. 20 250. Bank statements show that the above-referenced wire transfers from the 21 Overseas Investment Funds, beginning on or about March 21, 2013, were the first credits 22 to the Tanore Account. 23 251. On or about March 21, 2013, Devonshire transferred an additional 24 $430,000,000 to the Granton Account. Account opening documents for the Granton 25 Account were signed by TAN. The $430,000,000 wire from Devonshire was processed 26 through a U.S. correspondent bank account at J.P. Morgan Chase, and bank statements 27 show that it was the first credit to the Granton Account. 28 73 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 74 of 136 Page ID #:74 1 252. On or about that same day, March 21, 2013, Granton transferred 2 $430,000,000 – the same amount received from Devonshire – to the Tanore Account. 3 As set forth above, the Tanore Account and the Granton Account have the same 4 beneficial owner of record (TAN). 5 6 253. Approximately four days later, on or about March 25, 2013, Tanore transferred $378,000,000 back to the Granton Account. 7 254. The passage of funds back and forth through accounts held in the name of 8 different legal entities but having the same stated beneficial owner had no legitimate 9 commercial purpose but was instead undertaken as a means of layering these 10 transactions to obscure the nature, source, location, ownership and/or control of the 11 funds. 12 255. The transfer of 1MDB funds through the Overseas Investment Funds to the 13 Tanore and Granton Accounts could not have been accomplished without the 14 participation or acquiescence of one or more officials at 1MDB. 15 256. Bank statements for the Tanore Account demonstrate that funds transferred 16 to the Tanore Account were not thereafter transferred to an account belonging to 17 ADMIC or used for investment purposes with any apparent legitimate business 18 connection to ADMIC or 1MDB. 19 257. Instead, funds from the Tanore Account were sent to an account belonging 20 to MALAYSIAN OFFICIAL 1, and were also used by TAN and LOW to purchase art. 21 Funds from the Tanore Account were also used by LOW to acquire a substantial interest 22 in a luxury hotel in New York City. These uses were inconsistent with the intended 23 purpose of the bond proceeds as set forth in the offering circular and the April 23, 2013, 24 1MDB press release. 25 258. The execution of various SWIFT instructions and other transfer directions, 26 as well as the preparation of the voluminous documentation that was created in 27 connection with the diversion of more than $1 billion in funds from 1MDB through the 28 Overseas Investment Funds to the Tanore Account, would have been difficult to execute 74 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 75 of 136 Page ID #:75 1 within such a short period of time, i.e., within days of the bond closing date, without 2 advance planning. The plan to divert proceeds of the Project Catalyze bond offering to 3 the Tanore Account pre-dated the March 19, 2013, bond offering. 4 5 6 7 8 9 10 11 D. $681 MILLION WAS TRANSFERRED FROM THE TANORE ACCOUNT TO AN ACCOUNT BELONGING TO MALAYSIAN OFFICIAL 1 259. Shortly after proceeds of the 2013 bond sale were diverted to the Tanore Account, $681,000,000 was sent from the Tanore Account to a bank account belonging to MALAYSIAN OFFICIAL 1. 260. On or about March 21, 2013, Tanore transferred $620,000,000 into an 12 account at AmBank in Malaysia, whose beneficiary was listed as “AMPRIVATE 13 BANKING-MR.” On or about March 25, 2013, an additional $61,000,000 was wired 14 from the Tanore Account to the same account at AmBank, for a total of $681,000,000. 15 261. This account belonged to MALAYSIAN OFFICIAL 1 and is the same 16 account that in 2011 received $20 million from the PETROSAUDI CO-FOUNDER that 17 was traceable to the Good Star Account, as set forth in Section II.G. It is also the same 18 account that in 2012 received at least $30 million from the Blackstone Account that was 19 traceable to the Aabar-BVI Swiss Account and the 2012 bond proceeds, as set forth in 20 Section III.E.3. 21 262. On or about August 26, 2013, $620,010,715 was wired from a different 22 account at AmBank to the Tanore Account. This AmBank account also belonged to 23 MALAYSIAN OFFICIAL 1, and the transfer represented funds from the $681 million 24 payments that were being returned to Tanore. 25 263. The Attorney General of Malaysia publicly stated that he conducted an 26 inquiry into the $681 million in payments. In a press release issued on January 26, 2016, 27 the Malaysian Attorney General confirmed that, “the sum of USD681 million (RM2.08 28 billion) [was] transferred into the personal account of [MALAYSIAN OFFICIAL 1] 75 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 76 of 136 Page ID #:76 1 between 22.03.2013 and 10.04.2013,” and that, “in August 2013, a sum of USD620 2 million (RM2.03 billion) was returned by [MALAYSIAN OFFICIAL 1]. . . .” The 3 Malaysian Attorney General ultimately characterized the payment of $681 million as a 4 “personal donation to [MALAYSIAN OFFICIAL 1] from the Saudi royal family which 5 was given to him without any consideration.” 6 264. Bank records associated with the Tanore Account show that TAN was the 7 beneficial owner of the Tanore Account, from which the $681,000,000 payments to the 8 account of MALAYSIAN OFFICIAL 1 were made, and that 1MDB OFFICER 3 was 9 added as an authorized signor on the Tanore Account roughly one day before the first 10 wire of $620,000,000 was sent from the Tanore Account to the account of 11 MALAYSIAN OFFICIAL 1. 12 13 E. THE TANORE ACCOUNT WAS USED TO PURCHASE ART FOR 14 THE PERSONAL BENEFIT OF TAN AND LOW 15 16 FROM APPROXIMATELY MAY THROUGH SEPTEMBER 2013, 265. Notwithstanding the fact that 1MDB represented in the offering circular that 17 the proceeds of the 2013 bond sale would be used for ADMIC, funds from the 2013 18 bond sale that were diverted through the Tanore Account were used to purchase tens of 19 millions of dollars in artwork in the United States. This artwork was acquired for the 20 personal benefit of LOW, TAN and their associates, not for the benefit of 1MDB or 21 ADMIC. 22 23 24 1. From Approximately May Through September 2013, Tanore Purchased Approximately $137 Million in Art 266. In early May 2013, TAN opened an account at Christie’s Auction House 25 (“Christie’s”) in the name of Tanore Finance Corporation. Christie’s is a major art 26 auction house with a salesroom in New York. The Christie’s account opened for Tanore 27 was assigned account number XXX7644. In connection with the opening of this 28 account, TAN submitted a letter to Christie’s from Falcon Bank in Zurich, which was 76 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 77 of 136 Page ID #:77 1 dated May 8, 2013 and was signed by the Director and Managing Director of the Bank. 2 That letter represented that TAN was the beneficial owner of the Tanore Account. 3 267. On or about May 10, 2013, TAN designated McFarland, co-founder of Red 4 Granite Pictures, as an agent authorized to bid on behalf of Tanore. McFarland 5 corresponded with Christie’s about Tanore’s bidding account using his Red Granite 6 Pictures email account. 7 268. At auctions held in New York on or about May 13, 2013, and May 15, 8 2013, Tanore purchased five works of art for a collective total price of $58,348,750. 9 Specifically, invoices show that at an “11th Hour” Charity Sale on May 13, 2013, Tanore 10 purchased an unnamed work by Mark Ryden for $714,000 (“Ryden work”) and an 11 unnamed work by Ed Ruscha for $367,500 (“Ruscha work”). At a Post-War & 12 Contemporary Evening Sale on May 15, 2013, Tanore purchased Dustheads, by Jean- 13 Michel Basquiat (“Dustheads”) for $48,843,750; Untitled – Standing Mobile, Alexander 14 Calder (“Calder Standing Mobile”) for $5,387,750; and Tic Tac Toe, by Alexander 15 Calder (“Tic Tac Toe”) for $3,035,750. 16 269. On or about June 4, 2013, $58,348,750 was wire transferred from the 17 Tanore Account at Falcon Bank to an account at J.P. Morgan Chase in the United States 18 maintained by Christie’s. 19 270. On or about June 28, 2013, Tanore purchased two works of art in a private 20 sale arranged by Christie’s: Concetto spaziale, Attese, by Lucio Fontana (“the Fontana 21 piece”); and Untitled (Yellow and Blue) by Mark Rothko (“the Rothko piece”). The 22 invoice set forth three alternative payment amounts, depending on when payment was 23 made, including: payment of $7,950,000 by July 5, 2013, and payment of the remaining 24 $71,550,000 by October 3, 2013, for a total purchase price of $79,500,000. 25 271. On or about July 3, 2013, $7,950,000 was wired from the Tanore Account 26 to an account at J.P. Morgan Chase in the United States maintained by Christie’s. On or 27 about September 9, 2013, Tanore wired an additional $71,550,000 to Christie’s account 28 77 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 78 of 136 Page ID #:78 1 at J.P. Morgan Chase. The remittance instructions for both wires contain references to 2 Tanore’s account number and “INVOICE DATE: 28JUN13.” 3 272. A Senior Vice President at Christie’s (“Christie’s VP”) who served as a 4 client representative for Tanore and LOW viewed Tanore and LOW as interchangeable, 5 and the Christie’s VP believed that LOW was making purchases for his corporate 6 collection. The Christie’s VP also indicated that McFarland and LOW attended art 7 auctions in New York together and that at those auctions, McFarland would bid for 8 Tanore. 9 273. TAN and LOW took deliberate steps to avoid the appearance of an 10 association between LOW and Tanore in written documentation. For example, on 11 November 1, 2013, LOW was copied on an email exchange between TAN and Christie’s 12 employees about art that Tanore had recently purchased. That same day, LOW 13 responded: “Please deal with Eric directly re his works. Don’t need to cc me for 14 confidentiality reasons unless Eric expressly says to do so.” 15 274. On October 1, 2013, TAN requested that Christie’s reserve a specific 16 skybox, with seating for twelve guests, at upcoming auctions on November 5 and 12. In 17 connection with this request for a skybox, a Christie’s employee sent an email to a 18 colleague stating in relevant part, “It better look like Ceasar Palace [sic] in there . . .The 19 box is almost more important for the client than the art.” 20 275. Tanore successfully bid on additional artwork at a November 5, 2013, 21 Impressionist and Modern Art Evening Sale, including a work by Vincent Van Gogh 22 entitled La maison de Vincent a Arles (“VAN GOGH ARTWORK”) for $5,485,000. 23 But Tanore had difficulty making payments for the purchased works due to concerns 24 raised by the compliance department at Falcon Bank, where Tanore maintained its 25 account. In a November 21, 2013, email to Christie’s, TAN explained in pertinent part: 26 I had been on the phone with Falcon Bank (for Tanore Finance Corp) on 27 28 78 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 79 of 136 Page ID #:79 1 Thursday to resolve this matter as the compliance department has some 2 questions that required my response about the amount of Art purchases 3 made recently. 4 5 Nothing of concern, but just that I have to provide answers re when I started 6 being interested in art, intentions for the artworks and going forward the 7 expected outflows from purchase of Artworks or inflows from sale of 8 Artworks (if any). 9 276. In an internal email dated December 9, 2013, with the subject line 10 “Tanore,” the Christie’s VP directed another Christie’s employee to “send an email” to 11 Tanore about its continued failure to make payment for the art purchased on November 5 12 and to “please CC Jho even though he does not like it.” 13 277. By email dated December 10, 2013, TAN advised two Christie’s employees 14 that he “spoke to Mr Low and he has agreed to buy the items that I recently auction at 15 xties n [sic] private sales since he can pay immediately.” On or about December 13, 16 2013, a Christie’s employee sent TAN an email requesting that he “execute the attached 17 documents confirming that your obligations will be assumed by Mr. Low.” Among the 18 attachments to that email were letter agreements voiding certain purchases that Tanore 19 had made at the November 5 sale, including the VAN GOGH ARTWORK, and letter 20 agreements for the assignment to LOW of Tanore’s interest in and payment obligations 21 for those purchases. TAN responded in an email dated December 13, 2013: “Please do 22 not have Mr Low in any document. I prefer just me null and void. Thank you.” 23 278. In an email dated December 13, 2013, a Christie’s employee transmitted 24 several documents to LOW, including copies of the unsigned assignment agreements 25 described above. LOW responded the same day: “Please remove any reference to 26 Tanore in the agmt.” 27 28 79 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 80 of 136 Page ID #:80 1 279. As noted in Paragraph 435-447 below, LOW ultimately purchased the VAN 2 GOGH ARTWORK for which Tanore was unable to make payment, and he did so using 3 money traceable to diverted 1MDB funds. 4 2. 5 6 Tanore, Through TAN, Gifted Artwork It Purchased from Christie’s to McFarland and LOW 280. TAN gifted several pieces of artwork purchased with funds from the Tanore 7 Account to McFarland and LOW, shortly after he acquired them. These “gifts” are 8 consistent with his having acting as a nominee to purchase art on behalf of others, using 9 diverted 1MDB funds. 10 281. On or about August 15, 2013, TAN responded to an email chain between 11 McFarland and several Christie’s employees on which he was copied: “Please do not 12 copy me anymore as the Painting has been officially gifted to joey in geneva free port so 13 it is his.” The subject line of the email was “Re: Mark Ryden work from 11th Hour.” 14 Based on context, the email indicates that TAN was advising Christie’s that he had gifted 15 the Mark Ryden work to Joey McFarland. 16 282. On or about September 26, 2013, a Christie’s employee advised TAN that, 17 “Ed Ruscha’s studio has reached out to me and asked if we can please let them know 18 who purchased his work in the 11th Hour auction.” TAN responded, copying 19 McFarland: “pls talk to joey, it is now owned by him.” McFarland responded further: “I 20 am [the] owner.” 21 283. TAN also purported to gift several pieces of artwork to LOW, including 22 works purchased with funds from the Tanore Account. These “gifts” of art purchased by 23 Tanore were memorialized in several “gift letters.” While the body of each letter was 24 identical, each letter referenced a different work or works being gifted, including: 25 Dustheads; the Rothko work; the Fontana Piece; and Tic Tac Toe. 26 284. Each of these gift letters was: (a) dated October 2, 2013, (b) addressed to 27 LOW from TAN and Tanore, and (c) contained the subject line: “RE: GIFT OF ART- 28 WORK(S) AS STATED BELOW IN CONSIDERATION OF YOUR FRIENDSHIP, 80 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 81 of 136 Page ID #:81 1 YOUR CHARITABLE CONTRIBUTION TO THE WORLD, AND PASSION IN 2 PROMOTING THE UNDERSTANDING AND APPRECIATION OF ART-WORKS.” 3 285. Each letter included representations from TAN that he is the “sole 100% 4 beneficial owner of TANORE FINANCE CORP,” and that he is “the legal and 5 beneficial owner of all the art-work(s) mentioned in this gift letter.” 6 286. The body of each letter also states: 7 I wish to gift you ALL of the art-work(s) mentioned in this gift letter in 8 consideration of the followings [sic]: 9 • all the generosity, support and trust that you have shared with me over the 10 course of our friendship, especially during the difficult periods of my life; 11 and 12 13 14 15 16 17 18 19 20 21 22 • your continuous generosity in providing charitable contributions to advance the well-being and development of our global communities; and • your passion in promoting the understanding and appreciation of artworks. 287. Each gift letter closes by stating: All the art-work(s) gifted to you should not in any event be construed as an act of corruption since this is against the Company and/or my principles and I personally do not encourage such practices in any manner whatsoever. The gift(s) is/are merely a token of appreciation and I am hoping that the gift(s) to you would encourage you to continue with your good work globally. 23 24 288. LOW also procured an additional letter from TAN, dated April 8, 2014, 25 confirming the content of the prior October 2, 2012, “Gift Letters.” This letter indicated 26 that it was prepared in support of LOW’s request for financing from Sotheby’s Financial 27 Services, for which LOW used certain artwork as collateral (as described further in 28 Paragraph 445 below). In this April 8, 2014 letter: 81 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 82 of 136 Page ID #:82 1 2 a. TAN identified himself as “Tanore’s 100% shareholder and 100% beneficial owner” and indicated that Tanore had been liquidated by him. 3 b. TAN indicated that he “remained the sole legal and beneficial 4 owner(s) of” the artwork listed in the Gift Letters, “until immediately prior to each 5 Transfer” to LOW. 6 c. The letter goes on to indicate, “To the best of my knowledge, as of 7 the date of this Letter, [LOW] is the sole and absolute owner of the Property, and there 8 is no other person or entity (including Tanore or myself) that has or can claim any 9 interest, direct or indirect, in the Property.” 10 11 d. The letter is signed by TAN. LOW also signed the letter as having “[a]cknowledged and [a]greed.” 12 289. Individuals engaged in money laundering or who otherwise wish to conceal 13 the true nature of financial transactions will sometimes acquire assets through a nominee, 14 who thereafter “gifts” the assets to the true intended purchaser. 15 290. Based on these facts, including LOW’s presence at auctions where Tanore 16 bid on art and the fact that TAN subsequently gave more than $100 million in art to 17 LOW for no consideration, Plaintiff alleges that TAN acted as a nominee for LOW when 18 purchasing art from the Tanore Account to obscure the fact that LOW was acquiring art 19 with funds from Tanore. 20 21 V. THE SUBJECT ASSETS WERE INVOLVED IN AND/OR TRACEABLE TO THE PROCEEDS OF THE FOREGOING CRIMINAL CONDUCT 22 23 291. As set forth below, numerous assets, including the DEFENDANT ASSET, 24 represent property derived from proceeds traceable to the foregoing criminal conduct, as 25 well as property involved in money laundering in violation of 18 U.S.C. §§ 1956 and 26 1957. 27 28 82 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 83 of 136 Page ID #:83 1 A. LOW PURCHASED THE L’ERMITAGE PROPERTY USING 1MDB 2 FUNDS FROM GOOD STAR MOVED THROUGH THE 3 SHEARMAN IOLA ACCOUNT 4 5 292. Funds traceable to the $700 million wire transfer from 1MDB to the Good 6 Star Account were used to acquire the L’ERMITAGE PROPERTY, a luxury hotel in 7 Beverly Hills, California, in 2010. 8 9 293. On January 15, 2010, just months after the $700 million wire transfer from 1MDB to the Good Star Account, a signed grant deed was filed with the Los Angeles 10 Recorder’s Office (“LA Recorder’s Office”) transferring ownership of L’ERMITAGE 11 PROPERTY to Wynton Real Estate (Beverly Hills) LLC (“Wynton”). Shearman 12 represented Wynton in the transaction. The purchase and sale agreement stated that in 13 addition to the hotel and a fee simple ownership in the land, Wynton acquired 14 L’ERMITAGE’s business assets, including but not limited to (i) all right, title and 15 interest in and to all transferable consents, authorizations, variances, waivers, licenses, 16 permits and approvals from any governmental or quasi-governmental agency, and (ii) all 17 right, title and interest and to all names related solely to the ownership and operation of 18 L’ERMITAGE and all related goodwill and domain names (“L’ERMITAGE BUSINESS 19 ASSETS”). 20 294. The final settlement statement for the purchase of the L’ERMITAGE 21 PROPETY shows that Wynton purchased the L’ERMITAGE PROPERTY for 22 $44,800,000. 23 24 25 295. The website of the L’ERMITAGE PROPERTY states that the L’ERMITAGE PROPERTY is managed by the Viceroy Hotel Group. 296. Real estate closing documents show that Chicago Title Insurance Company 26 (“Chicago Title”) was the escrow agent used for the purchase of the L’ERMITAGE 27 PROPERTY. Taek Szen Low, LOW’s brother, signed the transaction documents on 28 behalf of Wynton. 83 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 84 of 136 Page ID #:84 1 297. According to a document entitled “LOW FAMILY HISTORY AND 2 BACKGROUND, ORIGINS OF JYNWEL CAPITAL,” which was distributed to 3 various companies by LOW and his brother, LOW was a member of the Viceroy 4 Group’s Board and had participated in several major transactions, including “[t]he 5 acquisition of a 50% stake in [Viceroy].” 6 7 298. Likewise, an April 7, 2015, email LOW sent to a Las Vegas casino included an attachment stating: 8 [LOW is] proud to be involved in . . . L’Ermitage Beverly Hills and Viceroy 9 Hotel Group, . . . which have appreciated in value under Mr. Low’s 10 stewardship . . . . 11 In another attachment to this same email, LOW confirmed that Jynwel Capital, a 12 company of which he served as the chief executive officer, owned 100 percent of the 13 L’ERMITAGE PROPERTY. Jynwel Capital, according to this document, manages the 14 assets and funds of LOW’s family and “is not licensed to, and does not manage third 15 party funds. 16 299. The settlement statement for the sale of the L’ERMITAGE PROPERTY as 17 well as Shearman IOLA Account records show that, on or about December 21, 2009, a 18 $10,000,000 deposit was made for the purchase of the L’ERMITAGE PROPERTY and 19 that the amount due from the seller at closing, on or about January 15, 2010, was 20 $36,700,000. 21 300. J.P. Morgan correspondent bank records and Shearman IOLA Account 22 records show that the Shearman IOLA Account was used to purchase the L’ERMITAGE 23 PROPERTY. Below is a summary of the credits into and debits from the Shearman 24 IOLA Account related to the purchase of the L’ERMITAGE PROPERTY: 25 26 27 28 84 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 85 of 136 Page ID #:85 1 Table 11: Transfers Through the Shearman IOLA Account Related to the 2 the L’ERMITAGE PROPERTY 3 Credits into Shearman Debits from Shearman IOLA Account IOLA Account 4 Date 5 From Amount 6 Good Star Account $148,000,000 7 10/21/09 Amount 8 9 $10,000,000 12/21/09 10 11 $36,700,000 1/14/10 To Chicago Title Escrow Account Chicago Title Escrow Account 12 13 301. Shearman internal records show that Shearman segregated its funds into 14 different internal account numbers and client and matter numbers. Internal Shearman 15 records show that each of the transactions set forth above were linked to internal 16 Shearman accounts held for client 36853 (The Wynton Group) and matter 4 (Park 17 Laurel). 18 302. On January 14, 2010, $36,700,000, representing the balance of the purchase 19 price for the L’ERMITAGE PROPERTY, was wired from the Shearman IOLA Account 20 to an account at Bank of America maintained by Chicago Title. 21 303. J.P. Morgan correspondent bank records and Shearman IOLA Account 22 records show that on or about January 20, 2010, approximately $117 million was wired 23 from the Good Star Account to the Shearman IOLA Account. The notations on the wire 24 transfer state in part: “C. STAKE V.H. (USD 15M) D. VICEROY ST. M.H(USD 25 10M).” On or about March 3, 2010, $35,059,875 in additional funds was wired from the 26 Good Star Account to the Shearman IOLA Account. The notations on the wire transfer 27 state in part: “INC VICEROY HOTEL GR (USD 7M).” 28 85 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 86 of 136 Page ID #:86 1 304. Delaware Secretary of State records show that Wynton changed its name 2 to LBH Real Estate (Beverly Hills) LLC on November 4, 2013. In a document filed 3 with the State of California in connection with this name change, Li Lin Seet signed as 4 the LBH Real Estate (Beverly Hills) LLC’s manager. Li Lin Seet was an associate of 5 LOW; he was also an employee of LOW’s company Jynwel Capital. 6 305. On or about March 27, 2015, a grant deed transferring ownership of the 7 L’ERMITAGE PROPERTY from Wynton to LBH Real Estate (Beverly Hills) LLC was 8 signed. This grant deed was filed with the LA Recorder’s Office, on or about June 26, 9 2015. Title to the L’ERMITAGE PROPERTY remains in the name of LBH Real Estate 10 (Beverly Hills) LLC. 11 12 13 14 15 16 17 B. HILLCREST PROPERTY 1 WAS PURCHASED USING 1MDB FUNDS MOVED THROUGH SHEARMAN IOLA ACCOUNT, AND AZIZ THEREAFTER PURPORTEDLY PURCHASED THE PROPERTY FROM LOW WITH 1MDB FUNDS PASSED THROUGH THE AABAR-BVI ACCOUNT 306. As set forth below, funds traceable to the $700 million wire transfer from 18 1MDB to the Good Star Account were used in 2010 to purchase HILLCREST 19 PROPERTY 1 in Beverly Hills, California, and funds traceable to the Aabar-BVI Phase 20 bond sales were thereafter used to transfer the property from one legal entity to another 21 legal entity controlled by AZIZ. 22 307. A grant deed transferring ownership of HILLCREST PROPERTY 1 was 23 signed on May 17, 2010, and filed with the LA Recorder’s Office on September 30, 24 2010. Real estate closing documents show that HILLCREST PROPERTY 1 was 25 purchased by 912 North Hillcrest (BH) LLC for $17,500,000. 26 308. The original contract purchasers of HILLCREST PROPERTY 1 were RGA 27 Group, for whom the authorized signer was AZIZ, and 912 North Hillcrest Road (BH) 28 LLC, for whom the authorized signer was an attorney with Shearman. The amended 86 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 87 of 136 Page ID #:87 1 escrow instructions state that RGA Group assigned all of its rights under the purchase 2 contract for HILLCREST PROPERTY 1 to 912 North Hillcrest Road (BH) LLC. 3 309. On or about July 27, 2010, a California realtor (“California Realtor”) sent 4 an email to AZIZ’s Gmail account with the subject line “Hilcrest – Important!” The 5 email read in relevant part: 6 7 Hi Riza – We have received calls from the Seller’s lawyer questioning our 8 ability to close on schedule. . . Per escrow, we need the remaining 9 $16,985,342.48 in escrow by Friday . . . and the name of the LLC you will 10 be taking title under. 11 12 310. On or about July 28, 2010, AZIZ responded to the California Realtor by 13 email: “Spoke to Jho and he will follow-up with you with respect to all that is necessary. 14 Sincerely, Riza.” 15 16 311. On or about July 28, 2010, the California Realtor’s executive assistant, sent an email to LOW, copying AZIZ. The email read in relevant part: 17 18 Good morning Jho -- . . . escrow received and released to the buyer Riza’s 19 original deposit of $525,000. Riza said he sent another $525,000 on Friday 20 to replace the original deposit . . . In addition, escrow still needs to know the 21 name of the LLC Riza wants to take title under – this is extremely urgent as 22 escrow need [sic] to prepare the Grant Deed. 23 312. LOW responded to that email on or about July 28, 2010. His email read in 24 relevant part: “Can u set-up a conf call, so we can all call in jointly with our lawyers 25 from shearman so we can get up to speed and figure out a solution asap?” 26 27 313. The final buyer’s statement for the sale of HILLCREST PROPERTY 1 shows that three deposits in the amount of $525,000 were made for the purchase of 28 87 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 88 of 136 Page ID #:88 1 HILLCREST PROPERTY 1 and that the total balance due to escrow at closing was 2 $15,917,189.63. 3 314. The second and third deposits of $525,000 were made to the HILLCREST 4 PROPERTY 1 escrow account from the Shearman IOLA Account on or about July 28, 5 2010, and September 2, 2010. In addition, the remaining balance of $15,917,189.63 was 6 paid to the HILLCREST escrow account from the Shearman IOLA Account on or about 7 September 28, 2010. 8 9 10 315. Below is a summary of the credits into and debits from the Shearman IOLA Account related to the purchase of HILLCREST PROPERTY 1 (“HILLCREST ESCROW”): 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Table 12: Transfers Through Shearman IOLA Account Related to HILLCREST PROPERTY 1 Date Approximate Amount of Wire Transfers into Shearman IOLA Account From Amount 6/23/2010 Good Star Account 7/28/2010 $8,600,000 8/17/2010 Good Star Account $2,800,000 Debits from Shearman IOLA Account 88 Amount To $525,000 HILLCREST Escrow Account Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 89 of 136 Page ID #:89 1 2 8/31/2010 Good Star Account 3 9/2/2010 316. $654,000 he $525,000 4 5 9/3/2010 6 7 Good Star Account 8 9/28/2010 Good Star Account 9 9/28/2010 HILLCREST Escrow Account $8,646,000 not ati on on $17,999,985 the $6 $15,917,190 10 HILLCREST Escrow Account 54, 00 11 0 wire from the Good Star Account was “ACQUISITION OF ASSETS/PROPERTY 12 PAYMENT FO REXTENSION.” The notation on the September 3, 2010, wire of 13 $8,646,000 from Good Star to the Shearman IOLA Account was “ACQUISITION OF 14 ASSETS/PROPERTY PARTBALANCE PAYMENT.” The notation on the September 15 28, 2010 wire of $17,999,985 from Good Star to the Shearman IOLA Account was 16 “ACQUISITION OF ASSETS /PROPERTY (FULL BALANCE PAYMENT + 17 RENOVATION).” 18 317. 912 North Hillcrest Road (BH) LLC, which was the entity used to take title 19 to HILLCREST PROPERTY 1, was owned by Great Delight Limited (“Great Delight”), 20 an entity incorporated in the Seychelles. On or about July 10, 2012, Great Delight sold 21 its interest in “912 North Hillcrest Road (BH) LLC” to Kreger Trading Inc. (“Kreger 22 Trading”) for approximately $12,000,000. AZIZ signed a purchase and sale agreement 23 on behalf of Kreger Trading in connection with this transaction. Li Lin Seet, an 24 associate of LOW, signed on behalf of Great Delight. 25 26 318. AZIZ declared himself to be the owner of Kreger Trading in his 2012 U.S. tax return, a copy of which was obtained from AZIZ’s accounting firm. 27 28 89 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 90 of 136 Page ID #:90 1 319. AZIZ used funds that had been moved through the Aabar-BVI account to 2 acquire the entity 912 North Hillcrest Road (BH) LLC, and thereby to acquire the 3 property at HILLCREST PROPERTY 1. 4 320. As noted above in paragraph 206, records from Citibank and Red Granite 5 Pictures show that on or about June 20, 2012, $58,500,000 was wire transferred from the 6 Red Granite Capital Account to the Shearman IOLA Account in the United States that 7 held funds on behalf of AZIZ. On or about July 10, 2012, approximately $12,000,000 8 was transferred from the same IOLA Account to an attorney trust account held by 9 Sullivan & Cromwell LLP (“Sullivan & Cromwell”) for the purchase of the entity 912 10 North Hillcrest Road (BH). Sullivan & Cromwell served as counsel to Great Delight in 11 connection with the transfer of ownership over 912 North Hillcrest Road (BH) LLC. 12 Internal Shearman records show that each of these transactions set forth above were 13 linked to internal Shearman accounts held for client 37965 (Riza Aziz). 14 321. On or about August 13, 2013, Sullivan & Cromwell wire transferred 15 $10,786,706 to a bank account at BSI Bank in Singapore held by ADKMIC, with 16 payment details that contained reference to “GREAT DELIGHT LTD.” As noted above, 17 ADKMIC is an entity owned by LOW. On or about the same day, $10,500,000 was 18 transferred from the ADKMIC BSI Account to LOW’s personal account at BSI Bank in 19 Singapore, indicating that it was “PAYMENT TO SHAREHOLDER LTJ.” This 20 transfer of funds represented a payment from AZIZ to LOW for the purported sale of 21 HILLCREST PROPERTY 1, through the transfer of ownership over 912 North Hillcrest 22 Road (BH) LLC. 23 322. The transfer of HILLCREST PROPERTY 1 was effectuated in 2012 24 through the sale of a holding company (i.e., 912 North Hillcrest Road (BH) LLC) rather 25 than the direct sale of the property itself as a means to obscure the ownership, source, 26 and control of the assets. 27 28 90 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 91 of 136 Page ID #:91 1 C. LOW PURCHASED THE PARK LAUREL CONDOMINIUM USING 2 1MDB FUNDS MOVED THROUGH A SHEARMAN IOLA 3 ACCOUNT 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 323. Funds traceable to the $700 million wire transfer from 1MDB to the Good Star Account were used in 2010 to acquire the PARK LAUREL CONDOMINIUM in New York, New York. The purchase contract for the Park Laurel Condominium listed the ultimate purchaser as Park Laurel (NYC) Ltd., a BVI corporation,15 the final date of sale as February 5, 2010, and the final sales price as $23,980,000. Thereafter, in 2012, an entity controlled by AZIZ acquired the PARK LAUREL CONDOMINIUM from Park Laurel (NYC) Ltd. for approximately $35,500,000 by using funds traceable to proceeds of the 2012 bond sales that were misappropriated through the Aabar-BVI Swiss Account. 324. A real property transfer report filed with the New York City Department of Finance Office of the City Register (“NYC Register’s Office”) states that a contract for the sale of the PARK LAUREL CONDOMINIUM was signed on or about October 27, 2009 – less than 30 days after the $700 million wire transfer from 1MDB to the Good Star Account. The transfer report is signed by an individual affiliated with Ivory Industrial Investments Ltd. on behalf of the buyer, Park Laurel (NYC) Ltd. The buyer’s attorney is identified as the same attorney from Shearman who handled the purchase of HILLCREST PROPERTY 1. The buyer’s real estate agent represented that LOW was the purchaser. 325. LOW purchased the PARK LAUREL CONDOMINIUM using funds traceable to the $700 million wire transfer from 1MDB to Good Star. J.P. Morgan correspondent bank records and Shearman IOLA Account records show that on or about 15 The original contract purchaser of the PARK LAUREL CONDOMINIUM was Assured Alliance Investment Corporation, which, on December 4, 2009, assigned its rights under the contract to Ivory Industrial Investments Ltd., which was identified in Park Laurel (NYC) Ltd. documents as the predecessor name for Park Laurel (NYC) Ltd. 91 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 92 of 136 Page ID #:92 1 October 21, 2009, $148,000,000 was wired from the Good Star Account to a Shearman 2 IOLA Account. On or about February 5, 2010 – the same day as the final sale date listed 3 in the property transfer records – four bank checks totaling $22,179,049.82 were written 4 on the Shearman IOLA Account for the purchase of the PARK LAUREL 5 CONDOMINIUM. Records related to the Shearman IOLA Account included the 6 notation “Funds From Park Laurel Escrow” with regards to these four checks. Internal 7 Shearman records show that each of these transactions were linked to internal Shearman 8 accounts held for client 36853 (The Wynton Group) and matter number 4 (Park Laurel). 9 The final settlement statement for this purchase demonstrates that checks totaling 10 11 $21,626,661.58 were used in the purchase of the PARK LAUREL CONDOMINIUM. 326. On or about July 6, 2012, a contract for the sale of the PARK LAUREL 12 CONDOMINIUM was executed between Park Laurel (NYC) Ltd. as the seller, and Park 13 Laurel Acquisition LLC, as the buyer. Shearman represented the buyer, Park Laurel 14 Acquisition LLC, and Sullivan & Cromwell represented the seller, Park Laurel (NYC) 15 Ltd., in connection with this transaction. The sales contract was signed by AZIZ on 16 behalf of the buyer, Park Laurel Acquisition LLC. 17 327. In a letter dated September 28, 2012, AZIZ requested that the 18 Condominium Board for the PARK LAUREL CONDOMINIUM waive its first right of 19 refusal to the transfer of title from Park Laurel (NYC) Ltd. to Park Laurel Acquisition 20 LLC. In that letter, AZIZ represented that he was the sole director of an entity called 21 Sorcem Investments Inc. (“Sorcem”) and that Sorcem was the sole member of Park 22 Laurel Acquisition LLC. AZIZ also represented that upon transfer of title, “the Unit 23 shall be occupied by Riza Aziz . . . as if Riza was the individual owner of the Unit.” 24 328. AZIZ claimed ownership of Sorcem in his 2012 U.S. tax return. In those 25 returns, Sorcem is listed as having the same Los Angeles address that is listed as AZIZ’s 26 address. 27 28 329. Title to the PARK LAUREL CONDOMINIUM was transferred from Park Laurel (NYC) Ltd. to Park Laurel Acquisition LLC for a purchase price of $33,500,000, 92 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 93 of 136 Page ID #:93 1 by deed recorded on or about November 28, 2012. AZIZ signed the relevant 2 transactional documents on behalf of Park Laurel Acquisition LLC. 3 330. On or about November 16, 2012, $33,800,000 was transferred from 4 AZIZ’s Red Granite Capital Account at BSI Bank in Singapore to the Shearman IOLA 5 Account in the United States. Thereafter, $34,406,188 was wired from the Shearman 6 IOLA Account to a Sullivan & Cromwell attorney trust account at Citibank on or about 7 November 19, 2012, the date of the closing for the purchase of the PARK LAUREL 8 CONDOMONIUM. That same day, $1,049,126 was wired from the Shearman IOLA 9 Account to Chicago Title Insurance Company for closing costs. According to the 10 contract of sale, Chicago Title Insurance Company was the escrow agent for the PARK 11 LAUREL CONDOMINIUM sale. Shearman records indicate that the client on whose 12 behalf the funds were transferred into and out of the Shearman IOLA Account was 13 AZIZ. 14 331. Citibank records show that on or about November 20, 2013, the day after 15 the closing, $34,406,188 was transferred from the Sullivan & Cromwell attorney trust 16 account to an account at Rothschild Bank AG held in the name of “Park Laurel NYC 17 Ltd.,” the seller of the property. This wire transfer represented payment to LOW for the 18 sale of the PARK LAUREL CONDOMONIUM. 19 20 21 22 D. LOW PURCHASED THE BOMBADIER JET USING 1MDB FUNDS PASSED THROUGH SHEARMAN IOLA ACCOUNT 332. In 2010, LOW used funds traceable to the $700 million wire transfer from 23 1MDB to the Good Star Account to acquire the BOMBARDIER JET, a Bombardier 24 Global 5000 aircraft bearing manufacturer serial number 9265 and registration number 25 N689WM, with two Rolls Royce engines bearing manufacturer’s serial numbers 12487 26 and 12488, for approximately $35,371,335. 27 28 333. An aircraft bill of sale dated March 31, 2010, was executed transferring title and ownership of the BOMBARDIER JET from J.T. Aviation Corp. to Wells Fargo 93 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 94 of 136 Page ID #:94 1 Bank Northwest in its capacity as “owner trustee” of a trust created by Wynton Aviation 2 (Global 5000) Ltd. (hereinafter, “Wynton Aviation”). Wynton Aviation was 3 incorporated in the British Virgin Islands on or about December 30, 2009. 4 334. On or about December 31, 2009, J.T. Aviation Corp. and Wynton Aviation 5 executed a purchase agreement to sell the BOMBARDIER JET to Wynton Aviation less 6 than three months after the $700 million wire transfer was executed. 7 335. At the time of the purchase, the BOMBARDIER JET bore FAA 8 Registration Number N501JT and its beneficial owner was J.T. Aviation Corp.’s 9 president. 10 336. Wells Fargo records indicate that Wynton Aviation is a holding company 11 owned by LOW. According to these records, LOW is this entity’s sole beneficial owner, 12 controlling party, and legal owner. 13 337. Escrow and transactional documents relating to the sale of the 14 BOMBARDIER JET show that Crowe and Dunleavy (“Crowe”), a law firm in 15 Oklahoma, served as the escrow agent for the purchase of the BOMBARDIER JET. 16 338. As noted in paragraph 105 above, on or about October 21, 2009, the 17 Shearman IOLA Account received a wire from the Good Star Account for $148,000,000. 18 Internal Shearman records show that this transfer was linked to an internal Shearman 19 account held for client 36853 (The Wynton Group) and matter 4 (Park Laurel). On or 20 about January 26, 2010, the Shearman IOLA Account received a wire from the Good 21 Star Account for $117,000,000. Internal Shearman records show that this transfer was 22 linked to an internal Shearman account held for client 36853 (The Wynton Group) and 23 matter 8 (General). 24 339. On or about December 31, 2009, the same day the purchase agreement for 25 the sale of the BOMBARDIER JET was executed, a wire for approximately $7 million 26 was sent from the Shearman IOLA Account to an escrow account maintained by Crowe 27 at Bank of Oklahoma in the name of Crowe and Dunlevy Aircraft Escrow I (“Crowe 28 Aircraft Escrow Account”). Internal Shearman records show that the $7,000,000 94 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 95 of 136 Page ID #:95 1 transfer was linked to an internal Shearman account held for client 36853 (The Wynton 2 Group) and matter 4 (Park Laurel). 3 340. On or about March 26, 2010, Wynton Aviation and Wells Fargo Bank 4 Northwest, N.A. (“Wells Fargo”) entered into a trust agreement whereby Wells Fargo 5 agreed to serve as the “Owner Trustee” over a trust settled by Wynton Aviation for the 6 purpose of “ensur[ing] the eligibility of [the BOMBARDIER JET] for United States 7 registration with the Federal Aviation Administration.” 8 9 341. On or about March 29, 2010, a wire for $28,376,000 was sent from the Shearman IOLA Account to the Crowe Aircraft Escrow Account at Bank of Oklahoma. 10 Internal Shearman records show that the $28.376 million transfer was linked to an 11 internal Shearman account held for client 36853 (The Wynton Group) and matter 8 12 (General). 13 342. On or about March 31, 2010, a wire for $35,371,375 was sent from the 14 Crowe Aircraft Escrow Account to an account at Citibank in the name of the seller. 15 343. On or about April 2, 2010, the FAA issued a Certificate of Registration and 16 Assignment of Special Registration Numbers Form to Wells Fargo, indicating that the 17 BOMBARDIER JET’s new FAA Registration Number and tail number would be 18 N689WM. 19 20 21 22 23 E. LOW PURCHASED THE TIME WARNER PENTHOUSE AND TIME WARNER STORAGE UNIT USING 1MDB FUNDS PASSED THROUGH THE ADKMIC BSI ACCOUNT 344. As set forth below, funds traceable to the approximately $1 billion diverted 24 from 1MDB to the Good Star Account were used to purchase the TIME WARNER 25 PENTHOUSE and TIME WARNER STORAGE UNIT, in New York, New York. 26 345. Contracts for the sale of the TIME WARNER PENTHOUSE and TIME 27 WARNER STORAGE UNIT were signed on or about March 22, 2011. A transfer report 28 filed with the City of New York listed the ultimate purchaser as 80 Columbus Circle 95 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 96 of 136 Page ID #:96 1 (NYC) LLC,16 the final date of sale as July 6, 2011, and the final sales price as 2 $30,550,000. Shearman represented 80 Columbus Circle (NYC) LLC in the purchase of 3 the TIME WARNER PENTHOUSE and TIME WARNER STORAGE UNIT. The sales 4 contract and amendments thereto show that Harvey & Hackett was the escrow agent for 5 the purchase of the TIME WARNER PENTHOUSE and TIME WARNER STORAGE 6 UNIT. As set forth below, the TIME WARNER PENTHOUSE and TIME WARNER 7 STORAGE UNIT were purchased with funds traceable to the $700 million wire transfer 8 and $330 million wire transfers from 1MDB to Good Star. 9 346. On or about June 28, 2011, $55,000,000 was wire transferred from the 10 Good Star Account to the ADKMIC BSI Account. On or about the same day, the 11 following transactions occurred: (i) approximately $54,750,000 was wire transferred 12 from the ADKMIC BSI Account to an account at BSI Bank held in the name of Low 13 Hock Peng, a/k/a Larry Low, who is LOW’s father, (the “LHP Account”) and (ii) 14 approximately $30,000,000 was wire transferred from the LHP Account to an account in 15 the name of Selune Ltd. at Rothschild Bank AG in Switzerland. LOW represented to 16 BSI Bank in Singapore that he was the beneficial owner of Selune Ltd. 17 347. Internal Shearman records show that approximately eight days later, on or 18 about July 5, 2011, a wire for $27,000,000 was sent from another account at Rothschild 19 Bank AG in the name of 1/80 Columbus Circle (NYC) to the Shearman IOLA Account. 20 Plaintiff alleges that these funds originated from Selune’s account at Rothschild Bank 21 AG and were transferred to the 1/80 Columbus Circle account using an intra-bank 22 transfer. Internal Shearman records show that this $27,000,000 wire transfer was linked 23 to an internal Shearman account held for client 37103 (TJL/RT MISCELLANEOUS 24 25 26 27 28 16 The original purchaser of the TIME WARNER PENTHOUSE AND TIME WARNER STORAGE UNIT was Sabola Limited, a Seychelles company. A document entitled “Assignment and Assumption of Contract of Sale – Condominium Unit and Purchase Agreement for Personalty” states that Sabola Limited assigned its interest under the sales contract to 80 Columbus Circle (NYC) LLC. The assignment agreement is signed on behalf of Sabola Limited by Li Lin Seet. 96 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 97 of 136 Page ID #:97 1 INVESTMENT MATTERS) and matter 6, which was associated with the address of the 2 TIME WARNER PENTHOUSE. 3 348. Six bank checks totaling $27,247,677.74 were written on the Shearman 4 IOLA Account and directed to various parties involved in the purchase of the TIME 5 WARNER PENTHOUSE and TIME WARNER STORAGE UNIT. Internal Shearman 6 records show that these checks were linked to an internal Shearman account held for the 7 same client and matter associated with the incoming wire of $27,000,000 discussed 8 above. Specifically: 9 a. A check for $534,625 and a second check for $687,375, both dated 10 July 5, 2011, were written on the Shearman IOLA Account to Prudential Douglas 11 Elliman. The final settlement statement shows that $534,625 and $687,375 were 12 separate line items that were owed to the realtors as a broker’s fee. 13 b. A check for $17,750 dated July 5, 2011 was written on the Shearman 14 IOLA Account to New York State Sales Tax. The final settlement statement shows that 15 $17,750 was owed as “NY Sales Tax.” 16 c. A check for $15,778,071.79 dated July 5, 2011 was written on the 17 Shearman IOLA Account to J.P. Morgan Chase. The final settlement statement shows 18 that $15,778,071.79 was owed to J.P. Morgan Chase, N.A. to pay off a mortgage loan 19 owed by the former owner of the TIME WARNER PENTHOUSE and TIME WARNER 20 STORAGE UNIT. 21 d. A check for $9,829,634.89, dated July 5, 2011, and a second check 22 for $103.20, dated July 11, 2011, was written on the Shearman IOLA Account to the 23 former owner of the TIME WARNER PENTHOUSE and TIME WARNER STORAGE 24 UNIT. Real estate closing documents show that the former owner signed as the seller of 25 all of the personalty, namely, the furniture, furnishings, and non-fixture items, sold 26 during the transaction. 27 28 e. A check for $400,221.06, dated July 5, 2011, was written on the Shearman IOLA Account to Chicago Title Insurance Company. The final settlement 97 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 98 of 136 Page ID #:98 1 statement shows that $400,221.06 is the sum of all title charges involved in the purchase. 2 Chicago Title Insurance Company was the title agent on this purchase. 3 349. A Notice to the Board of Intention to Sell or Lease Condominium Unit was 4 completed in connection with the TIME WARNER PENTHOUSE and TIME WARNER 5 STORAGE UNIT. The signed notices for both the TIME WARNER PENTHOUSE and 6 TIME WARNER STORAGE UNIT identified Low Hock Peng, also known as Larry 7 Low, LOW’s father, as the occupant of the units. However, an unsigned version of this 8 notice dated May 15, 2011, identifies that LOW is the “ultimate beneficial owner of each 9 Sabola Limited and 80 Columbus Circle (NYC) LLC.” 10 350. According to a realtor involved in the sale of the TIME WARNER 11 PENTHOUSE and TIME WARNER STORAGE UNIT, LOW was the intended 12 occupant of the apartment, and Larry Low never even viewed the apartment before the 13 purchase. 14 15 16 17 F. LOW PURCHASED THE ORIOLE MANSION USING 1MDB FUNDS FUNNELED THROUGH THE ADKMIC BSI ACCOUNT 351. The ORIOLE MANSION, located in Beverly Hills, California, was 18 purchased with funds traceable to the $700 million wire transfer and the $330 million 19 wire transfers from 1MDB to Good Star. 20 352. A grant deed transferring ownership of ORIOLE MANSION to Oriole 21 Drive (LA) LLC, a Delaware corporation, was signed on November 20, 2012, and filed 22 with the County of Los Angeles on November 30, 2012. Real estate closing documents 23 show that the purchase price for ORIOLE MANSION was $38,980,000. A Notice of 24 Completion filed with the LA Recorder’s Office on July 29, 2013, states that 25 construction of a gym, audio visual upgrade, and miscellaneous work was completed on 26 ORIOLE MANSION on July 12, 2013. 27 28 98 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 99 of 136 Page ID #:99 1 353. An attorney at DLA Piper (“DLA Piper”), a U.S.-based law firm, signed the 2 Notice of Completion on behalf of Oriole Drive (LA) LLC. DLA Piper represented the 3 buyer in this sale. 4 354. J.P. Morgan Chase bank records show that on or about November 2, 2012 – 5 eighteen days prior to the signing of the grant deed transferring ownership of the 6 ORIOLE MANSION – approximately $153 million was wire transferred from the Good 7 Star Swiss Account to the ADKMIC BSI Account. 8 9 355. Approximately three days later, on or about November 5, 2012, approximately $153 million was transferred from the ADKMIC BSI Account to the LHP 10 Account. Two days later, on or about November 7, 2012, approximately $150 million 11 was transferred from the LHP Singapore Bank Account to an account in LOW’s name at 12 BSI Bank (“LOW BSI Account”). 13 356. Citibank records show that on or about November 7, 2012, approximately 14 $110 million was wired from the LOW BSI Account to an account in the name of Selune 15 Ltd. at Rothschild Bank AG in Switzerland. As set forth above in paragraph 346, LOW 16 is the beneficial owner of Selune Ltd. 17 357. Bank of America records show that on or about November 29, 2012, 18 $37,882,800 was wired from an account at Rothschild Bank AG in the name of 1/Oriole 19 Drive (LA) LLC, to an account at Bank of America in the name of Chicago Title. 20 Records from Bank of America contain a reference notice of: “[XXX]0583-994- 21 X5TITLE OFFICER[].” The wire instructions for the sale of ORIOLE MANSION 22 required that $37,859,200 be sent to a Bank of America account in the name of Chicago 23 Title Company with a reference for “[XXX]0584-994-X59 Title Officer[].” The escrow 24 agent involved in the purchase of ORIOLE MANSION stated in an email, dated 25 November 29, 2012 at 11:22 p.m., that the title company had received the wire sufficient 26 for closing. Records from the escrow agent demonstrate that $1,849 was later credited 27 back to Oriole Drive (LA) LLC. 28 99 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 100 of 136 Page ID #:100 1 2 G. LOW PURCHASED GREENE CONDOMINIUM USING 1MDB FUNDS FUNNELED THROUGH THE ADKMIC BSI ACCOUNT 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 358. The GREENE CONDOMINIUM, located in New York, New York, was purchased with funds traceable to the $700 million wire transfer and $330 million wire transfers from 1MDB to Good Star. 359. A real property transfer report was filed regarding the sale of GREENE CONDOMINIUM on or about March 5, 2014. The transfer report states that a contract for the purchase of the GREENE CONDOMINIUM by 118 Greene Street (NYC) LLC, a New York legal entity, was signed on or about February 5, 2014, that the final date of sale was February 27, 2014, and that the final purchase price was $13,800,000. 360. On or about November 2, 2012, approximately $153 million was wire transferred from the Good Star Account to the ADKMIC BSI Account. On or about November 5, 2012, $153 million was transferred from the ADKMIC BSI Account to the LHP Account. Two days later, on or about November 7, 2012, approximately $150 million was transferred from the LHP Account to the LOW BSI Account. That same day, approximately $110 million was wired from the LOW BSI Account to an account in the name of Selune, Ltd. which, as set forth above, belongs to LOW. This transaction left approximately $40 million in the LOW BSI Account. 361. Citibank records show that on or about February 5, 2014, $13,800,000 was wired from the LOW BSI Account to an account at Citibank in the name of DLA Piper. On or about February 12, 2014, a wire in the amount of $13,721,286 was sent from DLA Piper to Chicago Title. The payment details for that wire included the address for the GREENE CONDOMINIUM. 362. According to a realtor familiar with this property, LOW claimed that he was the owner of this property. 27 28 100 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 101 of 136 Page ID #:101 1 H. LOW ACQUIRED AN INTEREST IN EMI MUSIC PUBLISHING 2 USING 1MDB FUNDS DIVERTED THROUGH THE GOOD STAR 3 ACCOUNT 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 363. LOW laundered at least approximately $106,666,667 in misappropriated funds traceable to the Good Star Account to acquire a substantial interest in EMI Music Publishing Group North America Holdings Inc. (“EMI”), a music publishing company. Specifically, LOW used these funds to acquire an interest in an entity called Nile Acquisition Holding Company Ltd. (“EMI Partner A”), a Cayman Islands entity that partnered with Nile Acquisition LLC (“EMI Partner B”), a Delaware entity, to form DH Publishing L.P. (the “EMI Partnership”), EMI’s parent company. 364. On or about October 5, 2011, the EMI Partnership, a Cayman Islands limited partnership, was formed by a consortium of entities consisting of EMI Partner A and EMI Partner B with the express purpose of acquiring EMI Group Global Limited’s music publishing business. EMI Partner A is comprised of several investors, including (i) Mubadala Development Company (“Mubadala”), a sovereign wealth entity owned by the Government of Abu Dhabi, and (ii) JCL Media (EMI Publishing) Ltd. (also known as JW Nile (BVI) Ltd.) (“LOW EMI Partner”), a subsidiary of Jynwel Capital Ltd., LOW’s financial services firm based in Hong Kong. The LOW EMI Partner was formed in the British Virgin Islands on or about November 7, 2011. EMI Partner B is owned jointly by Sony Music Holdings, a New York corporation, and the Estate of Michael Jackson. 365. On or about November 11, 2011, the EMI Partnership, through BW Publishing Ltd., an indirect, wholly-owned subsidiary of the EMI Partnership, entered into a sale and purchase agreement with EMI Group Global Limited, a United Kingdom company, to acquire EMI. 366. Simultaneously with this acquisition, the EMI Partnership entered into an Administration Agreement with Sony/ATV Music Publishing LLC (“Sony/ATV”). 101 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 102 of 136 Page ID #:102 1 Under the Administration Agreement, Sony/ATV agreed to manage EMI’s day to day 2 operations, including management and exploitation of EMI’s music catalog, in exchange 3 for an administration fee. 4 367. EMI is the world’s third largest music publishing company by revenue. 5 EMI owns or possesses the rights to publish approximately 2.3 million musical 6 compositions, both historic and recent, from a variety of genres and a variety of 7 musicians, including a number of Grammy-winning artists. 8 9 368. In connection with its vast music catalog, EMI generates revenue from several sources including, among others: (i) royalties and fees earned when its songs are 10 performed publicly; (ii) royalties from paid-streaming services; (iii) royalties and fees 11 earned in exchange for the right to use songs for physical recordings or digital 12 downloads; (iv) royalties and fees paid for use of music in timed synchronization with 13 visual images; and (v) royalties and fees paid for use of a song in stage productions, and 14 rental of orchestra scores. 15 16 1. LOW’s Acquisition of an Interest in EMI PARTNER A 369. EMI Partner A was formed on or about September 29, 2011, in the Cayman 17 Islands. Initially, EMI Partner A’s sole shareholder was Fifty Sixth Investment 18 Company Ltd., an entity based in Abu Dhabi. In June 2012, Fifty Sixth Investment 19 Company Ltd. transferred its sole share in EMI Partner A to Mubadala. 20 370. On or about June 29, 2012, several entities agreed to subscribe for ordinary 21 shares in EMI Partner A pursuant to an Investment Agreement Relating to Nile 22 Acquisition Holding Company Limited (the “EMI Investment Agreement”). These 23 entities included: (i) Nile Cayman Holding Ltd. (“the “Mubadala Subsidiary”), an entity 24 owned by Mubadala; (ii) Pub West LLC, a Delaware company; (iii) GSO Capital 25 Opportunities Fund II (Luxembourg) S.a.r.l.; (iv) Blackstone/GSO Capital Solutions 26 Offshore Funding (Luxembourg) S.a.r.l.; (v) GSO SJ Partners LP; and (vi) the LOW 27 EMI Partner. 28 371. An internal EMI document described the LOW EMI Partner as follows: 102 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 103 of 136 Page ID #:103 1 [LOW EMI Partner] is a private equity investment holding company advised by 2 Jynwel Capital Limited, an investment and advisory firm whose chief executive 3 officer is [LOW]. [LOW] is a member of [EMI’s] advisory board and served as 4 [EMI’s] Non-executive Chairman-Asia. Jynwel Capital Limited has advised 5 [EMI] that [LOW EMI Partner] is owned by trusts for the benefit of the Low 6 family. 7 8 372. Pursuant to the EMI Investment Agreement, several investors agreed to subscribe for shares in EMI Partner A. Specifically: 9 a. The Mubadala Subsidiary agreed to acquire approximately 66.2 10 percent of EMI Partner A’s capital, consisting of 6,620.068965 ordinary shares, for 11 $320,000,000. 12 b. The LOW EMI Partner agreed to acquire approximately 22.06 13 percent of EMI Partner A’s capital, consisting of 2,206.89656 ordinary shares, for 14 $106,666,667. Li Lin Seet executed the EMI Investment Agreement on behalf of the 15 LOW EMI Partner in his capacity as its “director.” 16 c. GSO Capital Opportunities Fund II (Luxembourg) S.a.r.l. agreed to 17 acquire approximately 5.69 percent of EMI Partner A’s capital, consisting of 569.36719 18 ordinary shares, for $27,519,414. 19 d. Blackstone/GSO Capital Solutions Onshore Funding (Luxembourg) 20 S.a.r.l. agreed to acquire approximately 3.22 percent of EMI Partner A’s capital, 21 consisting of 322.68240 ordinary shares, for $15,596,316.17 22 23 e. Pub West LLC agreed to acquire approximately 1.37 percent of EMI Partner A’s capital, consisting of 137.93104 ordinary shares, for $6,666,667. 24 25 26 27 28 17 Blackstone/GSO Capital Solutions Onshore Funding (Luxembourg) S.a.r.l. is an affiliate of the private investment firm Blackstone Group, an entity discussed previously in Paragraph 171.c. It is unrelated to the BVI shell corporation referred to herein as Blackstone. 103 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 104 of 136 Page ID #:104 1 f. Blackstone/GSO Capital Solutions Offshore Funding (Luxembourg) 2 S.a.r.l. agreed to acquire approximately 1.2 percent of EMI Partner A’s capital, 3 consisting of 120.15875 ordinary shares, for $5,807,673. 4 5 6 g. GSO SJ Partners LP agreed to acquire approximately 0.22 percent of EMI Partner A’s capital, consisting of 22.27442 ordinary shares, for $1,076,597. 373. Furthermore, under the EMI Investment Agreement, the LOW EMI Partner 7 was authorized to play a role in the management and operations of EMI through its 8 ownership stake in EMI Partner A. Specifically, for instance, the EMI Investment 9 Agreement provides that the LOW EMI Partner may participate in selecting two of EMI 10 11 Partner A’s nine directors. 374. Additionally, under the EMI Investment Agreement, the single largest 12 individual shareholder within the LOW EMI Partner (the “LOW EMI Principal 13 Shareholder”) is permitted to play a role in selecting key EMI officials, including EMI 14 Partner A’s chief executive officer, EMI Partner A’s general counsel, EMI Partner A’s 15 chief financial officer as well as the EMI Partnership’s officers. According to internal 16 records from Bank of New York Mellon, where the LOW EMI Partner opened a bank 17 account, the LOW EMI Partner is a wholly-owned subsidiary of Jynwel Capital Ltd., 18 whose sole shareholder is LOW. 19 375. Additionally, the LOW EMI Principal Shareholder is permitted in his sole 20 discretion to select the EMI Partnership’s Non-Executive Chairman – Asia. This official 21 is responsible for “observational oversight of the business operations of the Partnership 22 in Asia excluding Japan.” EMI’s Non-Executive Chairman – Asia is also invited to 23 attend “ceremonial events relating to [EMI] and any other related music industry public 24 events that may be relevant to [EMI], in each case, to which all members of the board of 25 [the EMI Partnership] are invited.” 26 376. According to a document entitled “LOW FAMILY HISTORY AND 27 BACKGROUND, ORIGINS OF JYNWEL CAPITAL,” which was distributed to 28 various companies by LOW as recently as February 2015, LOW serves as the “Non104 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 105 of 136 Page ID #:105 1 executive Chairman, Asia, for EMI Music Publishing, [and is] also serving as a member 2 of [EMI’s] advisory board.” According to this same document, LOW led recent 3 transactions and advised the Low family investment trusts including one relating to a 4 “USD2.2 billion acquisition of EMI Music Publishing Group by Sony, Mubadala, 5 Blackstone Group’s GSO Capital Partners and David Geffen.” 6 377. The proceeds of the share purchases described in Paragraph 372 above were 7 used by EMI Partner A to, among other things, make capital contributions to the EMI 8 Partnership. Each partner’s respective partnership interest in the EMI Partnership is 9 calculated based upon its percentage of ownership of the partnership’s Class A Units. 10 According to the Fourth Amended and Restated Exempted Limited Partnership 11 Agreement of D.H. Publishing L.P., dated March 7, 2014, EMI Partner A made a capital 12 contribution of $483,333,396 to the EMI Partnership in exchange for 60.166 percent of 13 the EMI Partnership’s Class A Units. Likewise, EMI Partner B made a capital 14 contribution of $320,000,038 to the partnership in exchange for 39.834 percent of the 15 EMI Partnership’s Class A Units. 16 2. Transfer of Proceeds Through the United States 17 378. As noted in Section II.I above, on or about June 8, 2012, approximately 18 $120,000,000 in funds were wired from the Good Star Account to the ADKMIC BSI 19 Account via a correspondent bank account in the United States at J.P. Morgan. 20 379. On or about June 11, 2012, a wire of approximately $120,000,000 was sent 21 from the ADKMIC BSI Account to the LHP Account. That same day, (i) a wire for 22 $118,000,000 was transmitted from the LHP Account to LOW’s personal account at BSI 23 Bank; (ii) a wire for $115 million was sent from LOW’s personal account at BSI Bank to 24 an account in the name of Jynwel Capital at BSI Bank (“Jynwel Account A”); (iii) a wire 25 for $115 million was sent from Jynwel Account A to another account also maintained in 26 the name of Jynwel Capital (“Jynwel Accont B”) at BSI Bank; and (iv) a wire for $110 27 million was sent from Jynwel Account B to an account in the name of the LOW EMI 28 Partner at BSI Bank (“LOW EMI Account”). 105 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 106 of 136 Page ID #:106 1 380. On or about June 13, 2012, an escrow account was opened by LOW EMI 2 Partner with Bank of New York Mellon (the “EMI Escrow Account”) in the United 3 States. The account opening documents were signed by Li Lin Seet, who identified 4 himself as LOW EMI Partner’s director. The opening records also confirm that LOW is 5 the “100[%] (ultimate)” owner of the LOW EMI Partner and that Jynwel Capital Ltd. is 6 the “100% direct” owner. 7 381. On June 26, 2012, a wire for $320,000,000 was sent from Mubadala 8 Treasury Holding Co. LLC’s account at First Gulf Bank in Abu Dhabi to the EMI 9 Escrow Account. A notation on the wire instructions indicated that the funds were 10 intended to be sent to “NILE ACQUISITION HOLDING LTD ESCROW ACCOUNT.” 11 As noted above at Paragraph 363, “NILE ACQUISTION HOLDING LTD” is the name 12 of EMI Partner A. Furthermore, as noted above at Paragraph 372, pursuant to the EMI 13 Investment Agreement, Mubadala agreed to acquire its interest in EMI Partner A for 14 $320,000,000. 15 382. That same day, a wire for $106,666,667 was sent from the LOW EMI 16 Account to the EMI Escrow Account. A notation on this wire also read “NILE 17 ACQUISITION HOLDING LTD ESCROW ACCOUNT.” As noted above at Paragraph 18 372, pursuant to the EMI Investment Agreement, the LOW EMI Partner agreed to 19 acquire its interest in EMI Partner A for $106,666,667. 20 383. Upon information and belief, the funds transferred by LOW into the EMI 21 Escrow Account were used to acquire the LOW EMI Partner’s interest in EMI Partner A 22 and were transmitted in a manner intended to conceal the origin, source, and ownership 23 of criminal proceeds, based on the following facts and circumstances, among others: 24 a. Funds were moved through multiple accounts owned by different 25 entities on or about the same day in an unnecessarily complex manner with no apparent 26 business purpose. 27 28 106 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 107 of 136 Page ID #:107 1 b. For instance, there is no apparent commercial reason that LOW 2 would layer his transaction by funneling the exact same amount of money through six 3 different bank accounts at the same financial institution on or about the same day. 4 5 c. Individuals engaged in money laundering and other unlawful conduct often pass money through intermediary accounts to conceal the true source of the funds. 6 d. In materials that LOW submitted to entities with whom he sought to 7 do business, including materials described below in Paragraphs 432-434, LOW 8 represented that family resources were a significant source of his wealth. By funneling 9 money through his father’s account for a brief period of time, LOW created the 10 appearance that funds in his personal account, which were used to acquire an interest in 11 EMI Partner A, came from his father rather than from Good Star or ADKMIC. 12 384. Upon information and belief, at the time LOW transferred misappropriated 13 funds from his LOW EMI Partner account in Singapore to the EMI Escrow Account, he 14 knew those funds constituted misappropriated funds and intended to deprive 1MDB of 15 ownership of those funds. 16 17 18 19 20 21 I. TENS OF MILLIONS OF DOLLARS IN FUNDS DIVERTED FROM 1MDB WERE USED TO FUND RED GRANITE PICTURES AND TO PRODUCE THE MOTION PICTURE “WOLF OF WALL STREET” 1. LOW Distributed Millions in 1MDB Funds from Good Star to Red Granite Pictures to Fund “The Wolf of Wall Street” 22 385. As set forth below, funds from the Good Star Account were transferred into 23 and through various bank accounts at City National Bank in Los Angeles associated with 24 Red Granite Pictures, and that money was ultimately used to fund the production of “The 25 Wolf of Wall Street,” a motion picture produced by Red Granite Pictures and released in 26 the United States on December 25, 2013. These funds are directly traceable to the $700 27 million wire transfer and $330 million wire transfers unlawfully diverted from 1MDB to 28 the Good Star Account. 107 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 108 of 136 Page ID #:108 1 386. As set forth above in Sections II.D and II.F, approximately $1.03 billion 2 was diverted from 1MDB to the Good Star Account between approximately September 3 30, 2009 and October 25, 2011. 4 387. Bank account records from City National Bank and correspondent bank 5 records from J.P. Morgan Chase show that two wires totaling $10,173,104 were sent 6 from the Good Star Account to a bank account at City National Bank in Los Angeles that 7 was designated as the “Operating Account” for Red Granite Pictures (“RGP Operating 8 Account”). AZIZ is a signatory on this account. 9 388. More specifically, first, on or about April 12, 2011, a wire for $1,173,104 10 was sent from Good Star to the RGP Operating Account. The notation on this wire read: 11 “INVESTOR ADVANCES OF USD 1 173 104 OUT OF USD 5 000 000 to RED 12 GRANITE (MOVIES).” Second, on or about September 10, 2012, a wire for 13 approximately $9,000,000 was sent from Good Star to the RGP Operating Account. The 14 notation on this wire read: “ADVANCES FOR WOLF OF WALL STREET MOVIE 15 FOR ACHL.” 16 389. On or about September 11, 2012, one day after this second wire transfer, 17 approximately $9,015,191 was transferred from the RGP Operating Account to another 18 City National Bank account held in the name of Red Granite Pictures (“RGP Pictures 19 Account”). On or about September 12, 2012, the same amount – $9,015,191 – was 20 transferred from the RGP Pictures Account to yet another account at City National Bank 21 held in the name of TWOWS LLC (“TWOWS Account #1”). 22 390. “TWOWS” is an acronym for “The Wolf of Wall Street,” and TWOWS 23 LLC was a special purpose vehicle (“SPV”) created by Red Granite Pictures to produce 24 “The Wolf of Wall Street.” Delaware state records show that TWOWS LLC was formed 25 on or about April 16, 2012, and California state records show that AZIZ is one of the 26 entity’s managers. It is common in the film industry to create an SPV, such as a limited 27 liability corporation, for the purpose of producing a film. It is also common to open a 28 108 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 109 of 136 Page ID #:109 1 separate bank account or accounts in the name of that SPV and to use the funds in that 2 account to finance the film’s production. 3 391. City National Bank records show that the TWOWS Account #1 was used to 4 pay expenses associated with the production of “The Wolf of Wall Street.” In or around 5 April 2013, the TWOWS Account #1 was closed and the balance of the funds transferred 6 to another account at City National Bank also held in the name of TWOWS LLC 7 (hereinafter, “TWOWS Account #2”). The TWOWS Account #2 was also used to pay 8 expenses associated with the production of “The Wolf of Wall Street.” Collectively, 9 these two accounts are referred to herein as the “TWOWS Accounts.” 10 392. The TWOWS Accounts, in which funds traceable to the Good Star Account 11 were deposited, were used to pay for production expenses including, but not limited to, 12 the following: (i) between April 2013 and February 2014, 17 payments totaling 13 approximately $3.9 million were made to Sikelia Productions, Inc., a production 14 company belonging to the film’s director; (ii) between May 2012 and April 2014, at least 15 $48 million was paid to a company that specializes in managing payroll and production 16 expenses for the film industry; (iii) between July 2012 and May 2014, at least $4.1 17 million was paid to various visual effects companies; (iv) between May 2012 and April 18 2014, approximately $2.5 million was paid to the Screen Actors Guild; and (v) 19 approximately $80,000 was paid to a yacht charter company. 20 393. LOW, who distributed more than $10 million to Red Granite Pictures from 21 the Good Star Account, received a “special thanks” full-screen credit in the closing 22 credits of “The Wolf of Wall Street.” 23 394. In his acceptance speech upon winning a Golden Globe for his role in “The 24 Wolf of Wall Street,” Hollywood Actor 1 thanked “the entire production team,” singling 25 out in particular “Joey, Riz, and Jho,” whom he characterized as “collaborators” on the 26 film. Upon information and belief, this reference was to Joey McFarland, a co-founder 27 of Red Granite Pictures, AZIZ, and LOW. 28 109 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 110 of 136 Page ID #:110 1 395. During at least part of the time during which the above-referenced transfers 2 were made, LOW maintained a Red Granite email account with the domain name 3 @redgranitepictures.com. This email account was deleted in or around April 2012. 4 2. Tens of Millions in 1MDB Funds Funneled Through the Aabar-BVI 5 Account Were Used to Fund Red Granite Pictures and “The Wolf of 6 Wall Street” 7 396. Red Granite Pictures, and its production of “The Wolf of Wall Street” in 8 particular, were also funded with money traceable to the proceeds of the 2012 bond sales 9 that were diverted through the Aabar-BVI Swiss Account. 10 397. As set forth in Paragraph 203 above, between June 18, 2012, and November 11 14, 2012, $238,000,000 in funds traceable to the diverted proceeds of the 2012 1MDB 12 bond sales was transferred from Aabar-BVI to AZIZ’s Red Granite Capital Account at 13 BSI Bank in Singapore. 14 398. Between on or about June 20, 2012 – roughly two days after Aabar-BVI 15 sent its first wire to Red Granite Capital – and November 20, 2012, eleven wires totaling 16 $64,000,000 were sent from AZIZ’s Red Granite Capital Account in Singapore to the 17 RGP Operating Account in the United States. 18 399. Shortly after each of these eleven wires, Red Granite Capital transferred 19 funds from its Operating Account to the RGP Pictures Account. Between on or about 20 June 26, 2012 and November 20, 2012, a total of $54,797,321 was transferred from the 21 RGP Operating Account to the RGP Pictures Account. 22 400. In a series of nine transfers between approximately June 27, 2012, and 23 November 23, 2012, $52,004,162 of this $54,797,321 was then transferred from the RGP 24 Pictures Account to the TWOWS Account #1, which, as noted above, belonged to the 25 SPV responsible for producing “The Wolf of Wall Street.” 26 401. The movement of funds from the Red Granite Capital Account in Singapore 27 through various accounts associated with Red Granite Pictures to the TWOWS Account 28 #1 occurred in very close succession. For example, in one series of transfers all 110 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 111 of 136 Page ID #:111 1 occurring on or about August 10, 2012: (i) $3,000,000 was sent from the Red Granite 2 Capital Account to the RGP Operating Account; (ii) $2,831,754 was sent from the Red 3 Granite Operating Account to the RGP Pictures Account; and (iii) $2,831,754 was sent 4 from the RGP Pictures Account to the TWOWS #1 Account. 5 6 J. LOW ACQUIRED AN INTEREST IN “SYMPHONY CP (PARK LANE) LLC” AND THE PARK LANE HOTEL USING 1MDB 7 FUNDS DIVERTED THROUGH THE TANORE ACCOUNT 8 9 10 11 12 13 14 15 16 17 18 402. LOW laundered more than $200 million in misappropriated funds traceable to the 2013 bond sale into an account in the United States belonging to the law firm DLA Piper. LOW and his brother Low Taek Szen (“Szen”) used those funds to acquire an interest in an entity called “Symphony CP (Park Lane) LLC” (hereinafter, “the Park Lane Partnership” or “the Partnership”), a limited liability partnership between the New York real estate development company Witkoff Group and an investment entity controlled by LOW. On or about November 25, 2013, the Park Lane Partnership, through wholly-owned subsidiaries, acquired 36 Central Park South, New York, New York, 10019, also known as the Park Lane Hotel, for approximately $654,316,305. 1. 19 20 21 22 23 24 25 26 27 28 Transfer of Proceeds into the United States 403. On or about March 21 and 22, 2013, $835,000,000 in funds raised by 1MDB through its March 19, 2013 bond issue was transferred to the Tanore Account at Falcon Bank in Singapore, after being routed through one of three Overseas Investment Funds. 404. On or about March 25, 2013, a wire of approximately $378,000,000 was sent from the Tanore Account to the Granton Account at Falcon Bank in Singapore. 405. On or about the same day the Granton Account received $378,000,000 from Tanore (that is, March 25, 2013), Granton wired $378,000,000 to an account at RBS Coutts in Switzerland held in the name of Dragon Market Limited (“Dragon Market”). 111 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 112 of 136 Page ID #:112 1 LOW is the beneficial owner of this account. In early November 2013, two additional 2 wires were sent from the Granton Account to the RBS Coutts account belonging to 3 Dragon Market (“Dragon Market Account”). All three wires were processed through a 4 U.S. correspondent bank account at J.P. Morgan Chase. The approximate dates and 5 amounts of these wires, totaling $518,500,000, are summarized below: 6 Table 13: Relevant Wire Transfers from Granton to Dragon Dynasty 7 Date Sending Party Receiving Party Amount 3/25/2013 Granton Dragon Market $378,000,000 10 11/05/2013 Granton Dragon Market $93,300,000 11 11/06/2013 Granton Dragon Market $47,200,000 8 9 12 13 14 15 16 17 406. Between on or about April 25, 2013, and November 8, 2013, four wires totaling $476,300,000 were sent from the Dragon Market Account at RBS Coutts to an account at BSI Bank in Singapore held in the name of Dragon Dynasty Limited (“Dragon Dynasty”). These four wires were processed through a U.S. correspondent bank account at J.P. Morgan Chase. The approximate dates and amounts of these wires are summarized below: 18 19 Table 14: Relevant Wire Transfers from Dragon Market to Dragon Dynasty 20 Date Sending Party Receiving Party Amount 21 4/25/2013 Dragon Market Dragon Dynasty $98,000,000 22 7/5/2013 Dragon Market Dragon Dynasty $120,000,000 23 9/10/2013 Dragon Market Dragon Dynasty $9,800,000 24 11/8/2013 Dragon Market Dragon Dynasty $248,500,000 25 26 27 28 407. Account opening documents for the BSI Bank account maintained by Dragon Dynasty (“Dragon Dynasty Account”) list LOW as the authorized signatory on the account. Those documents also list Dragon Market as the director of Dragon Dynasty. 112 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 113 of 136 Page ID #:113 1 408. On or about November 12, 2013, $248,500,000 was wired from the Dragon 2 Dynasty Account to the LHP Account. On or about the same day that LOW’s father 3 received $248,500,000 from Dragon Dynasty, $235,500,000 was wired from the LHP 4 Account to the LOW BSI Account. The wire details for that transfer read: “Gift from 5 Low Hock Peng to Low Taek Jho.” 6 7 8 409. On or about November 12, 2013, $12,500,000 was wired from the LHP Account to an account at BSI Bank in Singapore belonging to Szen. 410. On or about November 12, 2013, LOW transferred $205,900,000 from his 9 account at BSI to an IOLA account at Citibank New York maintained by DLA Piper 10 (“DLA Piper IOLA Account”). The payment details on the wire read: “LOW TAEK 11 JHO SETTLEM ENT OF TRUSTS.” 12 411. On or about November 12, 2013, Szen transferred $12,185,189.32 from his 13 account at BSI Bank to the same DLA Piper IOLA Account. The payment details on the 14 wire read: “LOW TAEK SZEN SETTLE MENT OF TRUSTS.” 15 16 17 412. In total, LOW and his brother Szen collectively transferred $218,085,189 to the same DLA Piper IOLA Account on or about November 12, 2013. 413. Upon information and belief, the funds transferred by LOW and Szen into 18 the DLA Piper IOLA Account in the United States were moved in a manner intended to 19 conceal the origin, source, and ownership of criminal proceeds, based on the following 20 facts and circumstances, among others: 21 a. Funds were moved through multiple accounts owned by different 22 entities on or about the same day in an unnecessarily complex manner with no apparent 23 business purpose. 24 b. For example, there is no apparent commercial reason that LOW 25 would transfer funds from Dragon Market, an account he controlled, to Dragon 26 Dynasty, another account he controlled, and then to an account belonging to his father, 27 only to have a substantially similar amount of funds transferred from his father’s 28 account to LOW’s personal account on or about the same day. 113 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 114 of 136 Page ID #:114 1 2 c. Individuals engaged in money laundering and other unlawful conduct often pass money through intermediary accounts to conceal the true source of the funds. 3 d. In materials that LOW submitted to entities with whom he sought to 4 do business, including materials described in Paragraphs 432-434 below, LOW 5 represented that his family was a significant source of his wealth. By passing money 6 through his father’s account for a brief period of time, LOW created the appearance that 7 funds in his personal account, which were used to acquire an interest in the Park Lane 8 Partnership, came from his father rather than from Dragon Market, Granton, and 9 Tanore. 10 414. Upon information and belief, at the time LOW transferred misappropriated 11 funds (i) from his Dragon Market Account to his Dragon Dynasty Account using a 12 correspondent bank account at J.P. Morgan in the United States, and (ii) from his 13 personal account in Singapore to the DLA Piper IOLA Account in the United States, he 14 knew those funds constituted misappropriated funds and intended to deprive 1MDB of 15 ownership of those funds. 16 17 18 2. LOW’s Interest in Symphony CP (Park Lane) LLC and the Park Lane Hotel 415. LOW entered into a limited liability partnership with an affiliate of the 19 Witkoff Group LLC (“Witkoff Group”), a New York-based real estate investment and 20 management company, to operate an entity called “Symphony CP (Park Lane) LLC” 21 (hereinafter, “Park Lane Partnership” or “Partnership”). LOW used funds traceable to 22 diverted 1MDB funds to invest in the Park Lane Partnership. The formation of the Park 23 Lane Partnership entailed the creation of numerous legal entities, including many with 24 similar names. LOW’s investment interest in the Park Lane Partnership was held 25 through two entities: Symphony CP Investments LLC and Symphony CP Investments 26 Holdings LLC (collectively, “LOW Investment Entities” or “the Investor”). 27 28 416. The Park Lane Partnership was formed as a Delaware limited liability company with the filing of a Certification of Formation on July 15, 2012, and with the 114 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 115 of 136 Page ID #:115 1 execution of an Operating Agreement dated July 16, 2013. As originally constituted, the 2 Park Lane Partnership represented a partnership between an affiliate of the Witkoff 3 Group and an entity called Symphony CP Investments LLC, which was designated as the 4 “Investor.” As of October 25, 2013, LOW, Szen, and Li Lin Seet were designated as the 5 authorized signatories on behalf of Symphony CP Investments LLC (“LOW Investment 6 Entity I”). 7 417. Transactional documents describe the Park Lane Partnership as follows: 8 Symphony CP (Park Lane), LLC (“Partnership”) is a partnership formed for the 9 purpose of developing a world class residential condominium tower and the 10 possibility of developing a 6-star boutique hotel property . . . on the parcels located 11 at 36 Central Park South (Park Lane Hotel) and 21 West 58th Street . . . . The 12 Parcels are currently occupied by a 607-room hotel and a 66-unit residential rental 13 building, respectively. 14 418. An Amended Operating Agreement for the Partnership was executed on or 15 about November 25, 2013. Pursuant to that agreement, the Partnership consisted of: (1) 16 WG Partners 36 CPS LLC, an affiliate of the Witkoff Group (hereinafter, collectively 17 referred to as “Witkoff”), and (2) Symphony CP Investments Holdings LLC. As the 18 “Investor,” Symphony CP Investments Holdings LLC was to contribute 85% of the 19 capital, and Witkoff was to contribute 15%. A then-partner at DLA Piper signed the 20 Amended Operating Agreement on behalf of Symphony CP Investments Holdings LLC. 21 419. Symphony CP Investments Holdings LLC (“LOW Investment Entity II”), 22 the “Investor” in the Partnership, is a Delaware limited liability company having the 23 same address as DLA Piper in Chicago. According to its operating agreement, also 24 dated November 25, 2013, it has a single member: Symphony CP Investments LLC, i.e., 25 LOW Investment Entity I. 26 420. LOW and Szen dealt with Witkoff in connection with the Park Lane 27 Partnership through and on behalf of Jynwel Capital, a Hong Kong based entity founded 28 by LOW and Szen. 115 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 116 of 136 Page ID #:116 1 421. On or about November 20, 2013, a Managing Director of Witkoff (“Witkoff 2 Managing Director”) sent an email addressed to the “Jynwel Team.” Included on that 3 email were LOW and Szen; other employees of Jynwel Capital and Witkoff; and lawyers 4 from DLA Piper and U.S.-based law firm Akin Gump Strauss Hauer & Feld LLP. The 5 email attached a Capital Call Notice from the Park Lane Partnership, calling for a capital 6 contribution of $214,776,720.27 for the closing of the Park Lane acquisition, of which 7 $202,206,876.48 represented the share to be contributed by the “Investor.” The email 8 directed payment to an account at J.P. Morgan Chase maintained by Commonwealth 9 Land and Title Insurance Company, the escrow agent used in connection with the 10 11 acquisition of the Park Lane Hotel. 422. Bank records obtained from Citibank show that on or about November 25, 12 2013, DLA Piper transferred $202,206,876.48 from a DLA Piper IOLA Account at 13 Citibank to a bank account at J.P. Morgan Chase maintained by Commonwealth Land 14 Title Insurance Company. These funds were sent from the same account into which 15 LOW transferred approximately $205,900,000 on or about November 12, 2013. 16 423. Documents pertaining to the formation of the Park Lane Partnership, 17 including electronic communications, reveal that the Partnership was structured to permit 18 the possibility that Mubadala Development Company PJSC (“Mubadala”) would join 19 Jynwel as an investor in the LOW Investment Entities after the initial capitalization of 20 the Partnership. Mubadala is an investment vehicle wholly-owned by the Government of 21 Abu Dhabi. An organizational chart prepared by LOW’s counsel after the initial 22 capitalization appears to indicate that Mubadala did subsequently acquire some indirect 23 interest in Symphony CP Investments LLC, and thus in the Park Lane Partnership, 24 through various holding companies. That same organizational chart also shows than an 25 entity called “Virtue Trustees (Switzerland) AG” holds an interest in Symphony CP 26 Investments LLC and the Partnership through various holding companies. 27 28 116 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 117 of 136 Page ID #:117 1 424. In a May 2016 letter, the directors of Virtue Trustees (Switzerland) AG 2 represented that “Symphony CP Investments LLC is owned by Virtue Trustees 3 (Switzerland) AG as Trustee of a trust for the benefit of the Low family.” 4 5 425. The Investor’s total contribution to the Partnership to date has been approximately $380 million. 6 426. As recently as February 2016, LOW paid a capital call on behalf of the 7 “Investor” in the amount of approximately $2,956,162.03. Specifically, on or about 8 February 10, 2016, LOW transferred $3,206,162.03 from an account held in his name at 9 Amicorp Bank and Trust in Hong Kong to the M&T Bank account held by Symphony 10 CP Investments LLC, one of the LOW Investment Entities. On or about February 11, 11 2016, Symphony CP Investments LLC sent $2,956,162.03 through an intrabank transfer 12 to the M&T Bank account held by the Park Lane Partnership. 13 427. LOW and the “Investor” failed to make the most recent capital call dated 14 May 5, 2016. On May 20, 2016, Witkoff notified the “Investor” that it was in default. 15 16 3. The Park Lane Partnership’s Acquisition of the Park Lane Hotel 428. On or about July 16, 2013, the Park Lane Partnership entered into a 17 Purchase and Sale Agreement with the Leona M. and Harry B. Helmsley Charitable 18 Trust and the Park Lane Hotel, Inc., for the purchase of 36 Central Park South, then 19 known as the Helmsley Park Lane Hotel, for $660,000,000. The Park Lane Partnership 20 assigned its interests in that purchase agreement to a wholly-owned subsidiary, 21 “Symphony CP (Park Lane) Owner LLC.” 22 429. Real property transfer documents from the New York City Department of 23 Finance, Office of the City Register, indicate that, “Symphony CP (Park Lane) Owner 24 LLC” acquired 36 Central Park South on November 25, 2013, for $654,316,305. The 25 deed was recorded on December 5, 2013. The Park Lane Partnership secured a 26 mortgage on the property from Wells Fargo Bank for a maximum principle amount of 27 $291,700,000, with an initial loan of $266,700,000. The mortgage in the amount of 28 $266,700,000 was recorded on December 5, 2013. 117 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 118 of 136 Page ID #:118 1 430. “Symphony CP (Park Lane) Owner LLC,” the entity used to acquire the 2 Park Lane Hotel, is wholly-owned, through multiple subsidiaries, by the Park Lane 3 Partnership. 4 4. 5 Low Acquired an Interest in the Park Lane Hotel for His Personal Benefit Rather Than That of 1MDB 6 431. LOW, Szen, and Jynwel Capital did not invest in the Park Lane Partnership 7 for the benefit of 1MDB or ADMIC. Neither 1MDB nor ADMIC holds any interest in 8 the Park Lane Partnership, and there is no indication that any proceeds of the investment 9 in the Partnership have been returned to 1MDB or ADMIC. Rather, LOW and Szen 10 invested in the Partnership, through Jynwel, solely on behalf of themselves and their 11 family, and LOW falsely claimed to be investing personal family funds, not 1MDB 12 funds. 13 14 432. On October 16, 2013, a Principal at Witkoff who worked on the Partnership deal sent an email to LOW and Szen stating in relevant part: 15 We are getting down to the end with the lender, they are asking for specifics 16 on where the money on your side of the deal is coming from given it is 17 international money . . ., can you please provide specifics to me so I can 18 forward it to the lender. 19 LOW responded the same day: “Low Family Capital built from our Grandparents, down 20 to the third generation now.” In reply, the Witkoff Principal wrote: “Ok, thanks Jho, just 21 didn’t know if there were any other minority investors on your side, I will let the bank 22 know.” LOW confirmed in response, in relevant part: “Just all the family.” 23 433. In an email dated October 17, 2013, the Witkoff Managing Director advised 24 individuals at Wells Fargo, where the Park Lane Partnership was at the time seeking a 25 mortgage, that “Jynwel serves as the advisory team to the Investor (Jho and Szen Low). 26 Their capital derives from a family trust which Jho and Szen control.” 27 434. Promotional material about Jynwel Capital, which LOW relied on to 28 demonstrate the purported nature and source of his wealth to other entities with which he 118 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 119 of 136 Page ID #:119 1 sought to do business, characterized Jynwel’s investment in the Park Lane Hotel as one 2 of its “key investments.” Another background document relied on by LOW to show the 3 origins of his wealth indicated that Jynwel “provides services to the Low Family 4 Investment Trusts” and “does not manage third party funds.” This same material claims 5 that LOW is a “third generation steward” of family wealth. 6 7 8 9 10 11 K. LOW PURCHASED THE VAN GOGH ARTWORK USING 1MDB FUNDS FUNNELED THROUGH THE DRAGON MARKET ACCOUNT, DRAGON DYNASTY ACCOUNT, AND ADKMIC BSI ACCOUNT 435. LOW used funds traceable to the Tanore Phase in 2013 to acquire the VAN 12 GOGH ARTWORK, a 76 x 54 cm pen and ink drawing by Vincent Van Gogh entitled 13 La maison de Vincent a Arles. 14 436. As noted in Paragraphs 277-278 above, Tanore successfully bid on the 15 VAN GOGH ARTWORK at a November 5, 2013, Christie’s auction, for a purchase 16 price of $5,485,000. After Tanore was unable to make payments for the artwork, TAN 17 informed Christie’s that LOW would be purchasing the artwork instead. Christie’s 18 issued LOW an invoice for $5,485,000 on December 20, 2013. 19 437. LOW purchased the VAN GOGH ARTWORK using funds diverted from 20 the 2013 bond sale. As noted above in Paragraphs 404-405, on or about March 25, 2013, 21 a wire of $378,000,000 was sent from the Tanore Account to the Granton Account at 22 Falcon Bank in Singapore. On or about that same day, a wire of $378,000,000 was sent 23 from the Granton Account to the Dragon Market Account. As noted above in Paragraph 24 408 and Table 13, on November 5 and 6, 2013, two additional wires totaling 25 $140,500,000 were sent from the Granton Account to the Dragon Market Account. In 26 total $518,500,000 was transferred from the Granton Account to the Dragon Market 27 Account between March 25, 2013 and November 6, 2013. 28 119 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 120 of 136 Page ID #:120 1 438. As noted above in Paragraph 406, between April 25, 2013 and November 8, 2 2013, four wires totaling $476,300,000 were sent from the Dragon Market Account to 3 the Dragon Dynasty Account. This included a wire in the amount of $9,800,000 on or 4 about September 10, 2013. Three days later, on or about September 13, 2013, a wire of 5 $9,300,000 was sent from the Dragon Dynasty Account to the ADKMIC BSI Account. 6 That same day, $9,300,000 was sent from the ADKMIC BSI Account to LOW’s 7 personal account at BSI Bank in Singapore. 8 439. As noted in Paragraph 408 above, LOW also received funds into his 9 personal account at BSI Bank in Singapore indirectly from the Dragon Dynasty Account 10 via his father’s account. On or about November 12, 2013, $248,500,000 was wired from 11 the Dragon Dynasty Account to the LHP Account, which, on the same day, transferred 12 $235,500,000 to LOW’s personal bank account at BSI Bank in Singapore. 13 440. On or about December 20, 2013, a wire of $7,288,667 was sent from the 14 LOW BSI Account to Christie’s bank account at J.P. Morgan Chase in the United States. 15 A second wire of $5,120,000 was sent on or about January 22, 2014, to the same 16 Christie’s account. The payment details for that wire read: “NOTES: NOV 2013 17 AUCTIONS: VAN GOGH (2ND PAYMENT USD1,583,333.00) AND BASQUIAT 18 (2ND PAYMENT USD3,533,333.33.) A third wire of $5,117,000 was sent from the 19 LOW BSI Account to Christie’s on or about February 5, 2014, with the payment details: 20 “NOTES: FINAL PAYMENT FOR AUCTION 2013 (VAN GOGH AND 21 BASQUIAT.)18 22 23 24 25 441. A Christie’s invoice for the VAN GOGH ARTWORK, marked “PAID,” reflects that LOW paid $5,485,000 for the VAN GOGH ARTWORK. 442. On March 13, 2014, LOW sent an email to an employee at SNS Fine Art (the “SNS Employee”), an art dealer, inquiring: “Do you know of any banks, financiers 26 27 28 18 On February 4, 2014, the LOW BSI Account received a wire transfer of $334,102,534 from the LHP Account. 120 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 121 of 136 Page ID #:121 1 who take art as security for raise bank loans for investments/acquisitions of more 2 artwork?” Later that same day, LOW explained further in another email to the SNS 3 Employee which read in relevant part, “Just looking to borrow based on asset value. . . 4 Abt usd 330m, so looking for 50%. Only would like facility for 6 months to a year, so I 5 free up cash . . . Can you let me know who can do it? And the top 2 or 3 that would be v 6 aggressive.” 7 443. That same day, the SNS Employee responded to LOW, stating in relevant 8 part, “I think those sort of numbers would scare off Sotheby’s . . .” and suggested that 9 LOW consider other financial institutions. LOW responded in an email, “Yes pls. Prefer 10 the boutique banks that can move fast vs the large ones like JPM.” In another email 11 dated March 13, 2014, LOW explained to the SNS Employee what types of lenders he 12 would be looking to utilize. Specifically, LOW requested that the SNS Employee look 13 for “Quick, fast and aggressive and ones you know v well. Out of Europe or usa or 14 middle east not asia. Have abt usd350m and looking for line of 50% so I can buy more.” 15 444. In discussing the issue of using artworks as collateral to obtain funding 16 from a creditor, LOW sent another email to the SNS Employee on March 14, 2014, 17 explaining that the lender “can take all the art no problems. All in Geneva free port. 18 Speed is the most important and one with a fairly quick and relaxed kyc process. 19 Thanks!” 20 445. In April 2014, LOW used several pieces of art, including the VAN GOGH 21 ARTWORK, to secure a loan from Sotheby’s Financial Services, Inc. (“Sotheby’s 22 Financial”), a Sotheby’s affiliate. The loan, with a principal amount of $107 million, 23 was obtained by Triple Eight Ltd., a Cayman Island entity wholly-owned by LOW. 24 LOW secured the loan by pledging to Sotheby’s, as collateral, all right and title to 17 25 pieces of art, which the April 14, 2014 Loan Agreement estimated to be worth between 26 $191.6 and $258.3 million. The list of art used as collateral to secure the loan included 27 the VAN GOGH ARTWORK, as well as several works originally purchased by Tanore 28 121 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 122 of 136 Page ID #:122 1 in May and June 2012 and “gifted” to LOW in October 2013, as described in Section 2 IV.E above. 3 446. Disbursement records show that Sotheby’s Financial disbursed 4 $105,188,721.95 to an account at Caledonia Bank Ltd. in the Cayman Islands held in the 5 name of Triple Eight Ltd. on or about April 10, 2014. 6 447. After disbursing the loan amount to LOW, Sotheby’s sold some of the 7 paintings that LOW had pledged as collateral for the loan at LOW’s direction. By May 8 2016, Sotheby’s had recovered sufficient funds from the proceeds of the sale of certain 9 pledged art, including the painting Dustheads discussed in Paragraph 268, to cover the 10 outstanding balance of the loan. Upon repayment of the loan, Sotheby’s released its 11 security interest in the artwork. As of June 7, 2016, Sotheby’s still had the VAN GOGH 12 ARTWORK in its possession. 13 14 L. 1MDB FUNDS FUNNELED THROUGH THE DRAGON MARKET 15 AND DRAGON DYNASTY ACCOUNTS 16 17 LOW PURCHASED THE SAINT GEORGES PAINTING USING 448. LOW used funds traceable to the Tanore Phase in 2013 to acquire the 18 SAINT GEORGES PAINTING, a 25½ x 36¼ inch (65 x 92 cm) oil on canvas painting 19 entitled “Saint-Georges Majeur.” The painting was signed and dated “Claude Monet 20 1908” in the lower left-hand corner of the painting. 21 22 23 449. LOW purchased the SAINT GEORGES PAINTING from SNS Fine Arts (“SNS”), an art dealer, for a purchase price of $35,000,000 on December 18, 2013. 450. SNS issued LOW an invoice for the SAINT GEORGES PAINTING, stating 24 that LOW owed SNS an initial down payment of $5,000,000 on or before December 25, 25 2013. The remaining $30,000,000 was due on or before January 31, 2014. 26 451. On December 20, 2013, LOW sent an email to the SNS Employee asking, 27 “Wld you be kind enough to send me an image of this artwork so I can show my family? 28 Thank you.” 122 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 123 of 136 Page ID #:123 1 452. On December 22, 2013, the SNS Employee sent an email to LOW stating in 2 pertinent part, “Dear Jho, Congratulations on acquiring Monet’s stunning “Saint-Georges 3 Majeur’ . . . which, as you know, once belonged to the Art Institute of Chicago and is 4 also on the cover of Phillipe Piguet’s book, ‘Monet et Venise.’” 5 453. LOW paid for the VAN GOGH ARTWORK using funds diverted from the 6 2013 bond sale. As noted in Paragraphs 404-405 above: (i) a wire in the amount of 7 $378,000,000 was sent from the Tanore Account to the Granton Account on March 25, 8 2013; and (ii) three wires totaling $518,500,000 were sent from the Granton Account to 9 the Dragon Market Account between March 25, 2013 and November 6, 2013. 10 454. As noted above in Paragraph 406, between April 25, 2013 and November 8, 11 2013, four wires totaling $476,300,000 were sent from the Dragon Market Account to 12 the Dragon Dynasty Account. This included a wire in the amount of $9,800,000 on or 13 about September 10, 2013. Three days later, on or about September 13, 2013, a wire of 14 $9,300,000 was sent from the Dragon Dynasty Account to the ADKMIC BSI Account. 15 That same day, $9,300,000 was sent from the ADKMIC BSI Account to the LOW BSI 16 Account. 17 455. As noted in Paragraph 408 above, LOW also received funds into his 18 personal account at BSI Bank in Singapore indirectly from the Dragon Dynasty Account 19 via his father’s account. On or about November 12, 2013, $248,500,000 was wired from 20 the Dragon Dynasty Account to the LHP Account, which, on the same day, transferred 21 $235,500,000 to the LOW BSI Account. 22 456. On December 23, 2013, a $5,000,000 wire was sent from the LOW BSI 23 Account to SNS Fine Arts’ account at J.P. Morgan Chase in connection with the 24 purchase of the SAINT GEORGES PAINTING. 25 457. On December 23, 2013, the SNS Employee sent an email to LOW 26 confirming that SNS received the $5 million payment. The subject line of the email 27 read, “Re: Fw: Swift advice on USD 5 mio value 23.12.2013.” The email stated in 28 pertinent part, “Dear Jho— I just received notification that the $5M are pending in our 123 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 124 of 136 Page ID #:124 1 account. Congratulations, it’s a marvelous painting. I would love to send you a copy of 2 the Monet in Venice book, should I send it to the address of your invoice in HK?” 3 4 5 458. On February 5, 2014, a wire for $30,000,000 was sent from the LOW BSI Account to SNS Fine Arts’ account at J.P. Morgan Chase. 459. On January 28, 2014, the SNS employee sent an email to LOW. The email 6 read in relevant part, “Dear Jho, . . . We are currently preparing the crate and shipment 7 for Claude Monet’s stunning Venice view ‘Saint-Georges Majeur’. Could you kindly 8 confirm the name, address and contact information of where you would like us to 9 arrange to send it please.” The following day, LOW responded to the SNS employee 10 and informed him that he would like to have the painting placed in LOW’s storage in 11 “Geneva Free Port,” in Switzerland. 12 460. The SAINT GEORGES PAINTING was one of the pieces of art that LOW 13 used as collateral to secure the loan from Sotheby’s Financial to Triple Eight in April 14 2014, as referenced in Paragraph 445. After the balance of that loan was paid through 15 the sale of other pledged artwork, as set forth in Paragraph 447, Sotheby’s released its 16 security interest in the SAINT GEORGES PAINTING. As of June 7, 2016, Sotheby’s 17 still had the SAINT GEORGES PAINTING in its possession. 18 19 20 21 22 M. LOW PURCHASED THE NYMPHEAS PAINTING USING 1MDB FUNDS FUNNELED THROUGH THE DRAGON MARKET AND DRAGON DYNASTY ACCOUNTS 461. LOW used funds traceable to the Tanore Phase in 2013 to acquire the 23 NYMPHEAS PAINTING, a 130 x 200 cm oil on canvas painting entitled “Nympheas 24 avec Reflets de Hautes Herbes.” The painting was stamped “Claude Monet” in the lower 25 right-hand corner of the painting. 26 462. LOW purchased the NYMPHEAS PAINTING on June 23, 2014, from 27 Sotheby’s for a purchase price of £33,829,500 British Pounds (“GBP”) (equivalent to 28 approximately $57.5 million). 124 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 125 of 136 Page ID #:125 1 463. As noted in Paragraphs 404-405 above: (i) a wire in the amount of 2 $378,000,000 was sent from the Tanore Account to the Granton Account on March 25, 3 2013; and (ii) three wires totaling $518,500,000 were sent from the Granton Account to 4 the Dragon Market Account between March 25, 2013 and November 6, 2013. 5 464. As noted above in Paragraph 406, between April 25, 2013 and November 8, 6 2013, four wires totaling $476,300,000 were sent from the Dragon Market Account to 7 the Dragon Dynasty Account. This included a wire in the amount of $9,800,000 on or 8 about September 10, 2013. Three days later, on or about September 13, 2013, a wire of 9 $9,300,000 was sent from the Dragon Dynasty Account to the ADKMIC BSI Account. 10 That same day, $9,300,000 was sent from the ADKMIC BSI Account to the LOW BSI 11 Account. 12 465. As noted in Paragraph 408 above, LOW also received funds into his 13 personal account at BSI Bank in Singapore indirectly from the Dragon Dynasty Account 14 via his father’s account. On or about November 12, 2013, $248,500,000 was wired from 15 the Dragon Dynasty Account to the LHP Account, which, on the same day, transferred 16 $235,500,000 to the LOW BSI Account. 17 466. On July 31, 2014, a wire for £3,183,997 GBP (equivalent to approximately 18 $5.4 million) was sent from the LOW BSI Account to an account maintained by 19 Sotheby’s as an initial payment for the NYMPHEAS PAINTING. 20 467. On October 21, 2014, another wire for $65,000,000 was sent from the 21 Dragon Market Account to the Dragon Dynasty Account. This wire was processed 22 through a U.S. correspondent bank account at J.P. Morgan Chase.19 23 468. Two days later, on October 23, 2014, a wire for $65,000,000 was sent from 24 the Dragon Dynasty Account to the LOW BSI Account. That same day, a wire for 25 £28,500,000 GBP (equivalent to approximately $45.7 million) was wired from the LOW 26 27 28 19 On October 16, 2014, a wire for $72,510,000 was sent from an account in the name of TKIL Capital Partners Ltd. at AmiCorp Bank in Barbados to the Dragon Market Account. 125 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 126 of 136 Page ID #:126 1 BSI Account to Sotheby’s in the United Kingdom to acquire the NYMPHEAS 2 PAINTING. 3 469. On or about March 17, 2015, LOW, Triple Eight, and Sotheby’s Financial 4 executed an amendment to the April 2014 loan agreement discussed in Paragraph 445 5 (“Loan Amendment”). Among other things, the Loan Amendment extended the maturity 6 date of the loan, released certain pledged artwork, and added additional artwork as 7 collateral to secure the original loan. The NYMPHEAS PAINTING was among the 8 works of art that LOW added as collateral in that Loan Amendment. Pursuant to the 9 Loan Amendment, LOW was required to surrender possession of the NYMPHEAS 10 PAINTING to Sotheby’s. After the balance of the loan was paid through the sale of 11 other pledged artwork, as set forth in Paragraph 447, Sotheby’s released its security 12 interest in the NYMPHEAS PAINTING. As of June 7, 2016, Sotheby’s still had the 13 NYMPHEAS PAINTING in its possession. 14 15 16 17 18 N. QUBAISI ACQUIRED THE WALKER TOWER PENTHOUSE USING FUNDS DIVERTED THROUGH THE AABAR-BVI SWISS ACCOUNT 470. Funds traceable to the proceeds of the 2012 bond sales, which were diverted 19 from 1MDB and/or IPIC, were used by QUBAISI to acquire a penthouse condominium 20 unit in the Walker Tower in New York, New York. The property was purchased by an 21 entity called 212 West 18th Street LLC on January 21, 2014 for approximately 22 $50,912,500. Greenberg Traurig, LLP, a U.S.-based law firm, represented 212 West 23 18th Street LLC in connection with the purchase. 24 471. As noted in Paragraphs 143-154 above, beginning on or about May 22, 25 2012, the Aabar-BVI Swiss Account received approximately $1.367 billion in funds 26 traceable to the 2012 bond sales. And, as set forth in Section III.D above, between May 27 and November 2012, Aabar-BVI, of which QUBAISI was a purported director, sent five 28 wires totaling approximately $637,000,000 from its account at BSI Lugano in 126 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 127 of 136 Page ID #:127 1 Switzerland to the Blackstone Account at Standard Chartered in Singapore. On or about 2 October 24, 2012, Aabar-BVI also caused an additional $366,000,000 to be sent to 3 Blackstone via intermediaries. 4 472. As described in Paragraph 181 above, between on or about May 29, 2012, 5 and November 30, 2012, four wires totaling $472,750,000 were sent from the Blackstone 6 Account to the Vasco Account. 7 8 9 473. On or about February 20, 2013, $20,750,000 was wired from the Good Star Account to the Vasco Account. 474. On October 28, 2013, a wire of $15,000,000 was sent from the Vasco 10 Account to an account at Citibank in the United States maintained by Greenberg Traurig. 11 The payment details on the wire read: “WALKER TOWER, PH1 CLIENT/MATTER 12 NO: 148376/010100 ATTORNEY NAME:” followed by the name of the attorney at 13 Greenberg Traurig who represented the buyer in the transaction. 14 475. On January 21, 2014, another wire of $36,596,281 was sent from the Vasco 15 Account to the same Citibank account maintained by Greenberg Traurig. The payment 16 details on the wire indicated, in relevant part: “WALKER TOWER ON BEHALF AL 17 QUBAISI FAMILY TRUST FOR LOAN TO AL QUBAISI212 WEST 18 STREET 18 LLC”; the payment details also included the name of the attorney at Greenberg Traurig 19 who represented the buyer in the transaction. 20 476. On October 30, 2013, QUBAISI entered into a Purchase Agreement with 21 “SMJ 210 West 18 LLC,” a Delaware limited liability company, for the purchase of 22 THE WALKER TOWER PENTHOUSE for the price of $50,000,000. The agreement is 23 signed by QUBAISI as the purchaser. 24 477. On January 21, 2014, QUBAISI assigned his interest in the Purchase 25 Agreement to “212 West 18th Street LLC f/k/a Al Qubaisi 212 West 18th Street LLC.” 26 QUBAISI signed on behalf of himself as the assignor, and also on behalf of “Al Qubaisi 27 212 West 18th Street LLC” as the assignee. Neil Moffitt (“Moffitt”) signed as the 28 Manager of “Al Qubaisi 212 West 18th Street LLC.” 127 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 128 of 136 Page ID #:128 1 478. The property was purchased by “212 West 18th Street LLC” by deed dated 2 January 21, 2014, for a purchase price of $50,912,500. Moffitt signed as the Manager of 3 “212 West 18th Street LLC.” Moffitt manages or managed several properties on behalf 4 of QUBAISI. 5 479. On March 9, 2015, $158,664.71 was transferred from the Vasco Account to 6 an account at J.P. Morgan Chase maintained by Moffitt. Payment details on the wire 7 read: “WALKER TOWER COMPLETE EXPENSES . . . TOTAL TO 2.20.2015.” 8 9 10 11 12 O. QUBAISI ACQUIRED THE LAUREL BEVERLY HILLS MANSION USING FUNDS DIVERTED THROUGH THE AABAR-BVI SWISS ACCOUNT 480. As described below, QUBAISI used funds from the Vasco Account, which 13 are traceable to the proceeds of the 2012 bond sales, to purchase THE LAUREL 14 BEVERLY HILLS MANSION in Beverly Hills, California. The property was 15 purchased for $31,000,000 on or about February 5, 2014, by Laurel Beverly Hills 16 Holdings LLC, a Delaware limited liability company. The property is currently on the 17 market and is listed for $38,000,000. 18 481. On or about January 10, 2014, QUBAISI transferred $930,000 from an 19 account at Falcon Bank in Switzerland held in his name to an account at Chase 20 Manhattan Bank belonging to Escrow of the West. The Buyer’s Final Settlement 21 Statement for the property acquisition, dated February 5, 2014, characterizes this transfer 22 as a deposit for the purchase of the LAUREL BEVERLY HILLS MANSION “from 23 Khadem Al-Qubaisi FBO Neil Moffitt.” 24 482. On or about January 30, 2014, $31,050,387.75 was wired from the Vasco 25 Account to an account at City National Bank in New York held in the name Escrow of 26 the West. The wire notations indicate: “7 M. FOR EQUITY TO AL QUBAISI 27 WALKER TOWER TRUST AND 24 M. FOR LOAN CONTRIB. FROM AL QUBAISI 28 TO LAUREL BEVERLY HOLDING LLC.” 128 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 129 of 136 Page ID #:129 1 483. Escrow of the West recorded a deposit of $31,050,387.75 for the purchase 2 of the LAUREL BEVERLY HILLS MANSION from Vasco Investments “FBO Laurel 3 Beverly” on the Buyer’s Final Settlement Statement for the property acquisition. 4 484. LAUREL BEVERLY HILLS MANSION was purchased by Laurel Beverly 5 Hills Holdings LLC by deed dated January 14, 2014, which was recorded in the land 6 records on February 5, 2014. The purchase price was $31,000,000. Neil Moffitt was an 7 authorized signor for Laurel Beverly Hills Holdings LLC. 8 9 10 P. QUBAISI ACQUIRED HILLCREST PROPERTY 2 USING FUNDS DIVERTED THROUGH THE AABAR-BVI SWISS ACCOUNT 11 485. QUBAISI used funds traceable to the proceeds of the 2012 bond sales to 12 purchase HILLCREST PROPERTY 2 in Beverly Hills, California. The property was 13 purchased on or about March 24, 2014 by 1169 Hillcrest LLC, a Nevada limited liability 14 company, for $15,000,000. 15 486. On or about March 21, 2014, $14,749,071.51 was wired from the Vasco 16 Account to an account at First American Trust, F.F.B. in the United States, held in the 17 name of First American Title Company. The payment details on the wire contain the 18 address for HILLCREST PROPERTY 2. 19 487. First American Title Company is the title company used in connection with 20 the acquisition of HILLCREST PROPERTY 2. First American Title Company recorded 21 the receipt of a deposit in the amount of $14,749,071.51 from Vasco Investments on 22 March 21, 2014 for the purchase of HILLCREST PROPERTY 2. 23 488. Land records maintained by the LA Recorder’s Office show that a Nevada 24 limited liability company called 1169 Hillcrest LLC purchased the property by deed 25 dated March 20, 2014, which was recorded in the land records on March 24, 2014. 26 489. According to the final closing statement for the transaction, dated March 24, 27 2014, 1169 Hillcrest LLC acquired the property for the purchase price of $15,000,000. 28 This included a deposit of $14,749,071.51 from First American Title Company. 129 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 130 of 136 Page ID #:130 1 2 490. The Operating Agreement for 1169 Hillcrest LLC, dated March 20, 2014, lists Neil Moffitt as the manager and sole member of the entity. 3 491. On or about January 8, 2016, a wire of $490,522.79 was sent from the 4 Vasco Account to an account at J.P. Morgan Chase in the United States held in the name 5 of 1169 Hillcrest LLC. The wire details read: “OUTSTANDING INVOICES FOR 6 WALKER TOWER (USD 26.194,81) AND BEVERLY LAUREL (USD 463.327,98) 7 PERIOD FROM SEPTEMBER TO DECEMBER.” 8 9 10 11 12 Q. AZIZ ACQUIRED THE QENTAS TOWNHOUSE & PARKING SPACE 2 USING FUNDS DIVERTED THROUG THE AABAR-BWI SWISS ACCOUNT 492. Funds traceable to proceeds of the 2012 bond sales were used by AZIZ to 13 purchase the QENTAS TOWNHOUSE, Belgravia, London, United Kingdom – together 14 with a leasehold for PARKING SPACE 2. The property was purchased by Qentas 15 Holdings Limited on or about July 12, 2012, for £23,250,000. In accounting records for 16 AZIZ, the amount he paid for the QENTAS TOWNHOUSE is recorded as equivalent to 17 $41,799,886. 18 493. As noted in Paragraphs 203 and 206 above, on or about June 18, 2012, 19 Aabar-BVI transferred $133,000,000 in funds traceable to the proceeds of the 2012 20 Project Magnolia bond sale to AZIZ’s Red Granite Capital Account at BSI Bank in 21 Singapore. On or about June 20, 2012—approximately two days later—AZIZ 22 transferred $58,500,000 from his Red Granite Capital Account to the Shearman IOLA 23 Account at Citibank. 24 494. One day later, on June 21, 2012, the Shearman IOLA Account wired 25 $43,000,000 from the same Shearman IOLA Account funds held on behalf of AZIZ to 26 an account maintained by Shearman & Sterling’s London office. 27 495. A purchase agreement for the QENTAS TOWNHOUSE was signed on July 28 2, 2012. An entity called “Lygon Place (London) Limited,” is listed as the seller; Qentas 130 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 131 of 136 Page ID #:131 1 Holdings Limited (“Quentas”), a British Virgin Islands entity, is listed as the purchaser; 2 and Shearman & Sterling’s London office is listed as the purchaser’s counsel. The 3 purchase price was £23,250,000. 4 496. Qentas acquired the QENTAS TOWNHOUSE from “Lygon Place 5 (London) Limited” by deed dated July 27, 2012, for £23,250,000. AZIZ signed the deed 6 on behalf of Qentas, and the Red Granite Business Manager signed as a witness. 7 497. Qentas also acquired leasehold rights to PARKING SPACE 2 as part of the 8 transaction. Closing documents indicate that a lease agreement was originally entered on 9 August 9, 2010 between O & H Properties Developments Limited and “Lygon Place 10 (London) Limited,” the entity that sold the property to Qentas. The lease agreement 11 granted “Lygon Place (London) Limited” a 999 year lease, beginning on January 1, 12 2009, to Parking Space 2 for rent of “a peppercorn per annum.” “Lygon Place (London) 13 Limited” conveyed this leasehold interest to Qentas by the same deed that transferred 14 title to the QENTAS TOWNHOUSE. 15 16 498. AZIZ claimed beneficial ownership of Qentas in his 2012 tax return. That tax return lists a Los Angeles address for Qentas. 17 18 FOREIGN LAW BASES FOR FORFEITURE 19 20 499. Misappropriating public funds by a public official is a criminal offense 21 under Malaysian law, as enumerated by the Penal Code of Malaysia, including but not 22 limited to sections 403 (dishonest misappropriation of property), 405 (criminal breach of 23 trust), 409 (criminal breach of trust by public servant or agent), 166 (Public servant 24 disobeying a direction of the law, with intent to cause injury to any person (including a 25 company)), 415 (cheating), 418 (cheating with knowledge that wrongful loss may be 26 thereby caused to a person whose interest the offender is bound to protect), and 420 27 (cheating and dishonestly inducing delivery of property); and the Malaysian Anti- 28 131 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 132 of 136 Page ID #:132 1 Corruption Act 2009, including sections 16, 17, and 23. Copies of these laws are set 2 forth in Attachment A. 3 500. Bank fraud is a criminal offense under Malaysian law, as enumerated by the 4 Penal Code of Malaysia, including but not limited to section 415 (cheating), 418 5 (cheating with knowledge that wrongful loss may be thereby caused to a person whose 6 interest the offender is bound to protect), and 420 (cheating and dishonestly inducing 7 delivery of property). 8 501. Misappropriating public funds by a public official is a criminal offense 9 under U.A.E. law, as enumerated in Federal Law No. (3) of 1987 on Issuance of the 10 Penal Code, including but not limited to Articles 224, 225, 227, 228, 229, and 399. 11 Copies of these laws, translated into English, are set forth in Attachment A. 12 FIRST CLAIM FOR RELIEF 13 (18 U.S.C. § 981(a)(1)(C)) 14 15 16 17 18 19 20 21 22 23 24 25 26 27 502. Paragraphs 1 through 501 above are incorporated by reference as if fully set forth herein. 503. The Defendant Asset is property that constitutes, and is derived from, proceeds traceable to one or more violations of: (i) a foreign offense involving the misappropriation of public funds by or for the benefit of a public official (18 U.S.C. § 1956(c)(7)(B)(iv)); (ii) fraud by or against a foreign bank (18 U.S.C. § 1956(c)(7)(B)(iii)); (iii) wire fraud (18 U.S.C. § 1343); and/or (iv) international transportation or receipt of stolen or fraudulently obtained property (18 U.S.C. § 2314), and receipt of stolen money (18 U.S.C. § 2315), each of which is a specified unlawful activity under 18 U.S.C. §§ 1956(c)(7)(A), 1956(c)(7)(B)(iv) and 1956(c)(7)(D), and a conspiracy to commit such offenses. 504. The Defendant Asset is therefore subject to forfeiture to the United States pursuant to 18 U.S.C. § 981(a)(1)(C). 28 132 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 133 of 136 Page ID #:133 1 SECOND CLAIM FOR RELIEF 2 (18 U.S.C. § 981(a)(1)(A)) 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 505. Paragraphs 1 through 501 above are incorporated by reference as if fully set forth herein. 506. The Defendant Asset was involved in, and is traceable to property involved in, one or more transactions or attempted transactions in violation of section 18 U.S.C. § 1957 and a conspiracy to commit such offenses in violation of section 18 U.S.C. § 1956(h). Specifically, the Defendant Asset was involved in and is traceable to property involved in one or more financial transactions, attempted transactions, and a conspiracy to conduct or attempt to conduct such transactions in criminally derived property of a value greater than $10,000 that was derived from specified unlawful activities, that is: (i) a foreign offense involving the misappropriation of public funds by or for the benefit of a public official (18 U.S.C. § 1956(c)(7)(B)(iv)); (ii) fraud by or against a foreign bank (18 U.S.C. § 1956(c)(7)(B)(iii)); (iii) wire fraud (18 U.S.C. § 1343); and/or (iv) international transportation or receipt of stolen or fraudulently obtained property (18 U.S.C. § 2314), and receipt of stolen money (18 U.S.C. § 2315). 507. The Defendant Asset is therefore subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(A). 20 THIRD CLAIM FOR RELIEF 21 (18 U.S.C. § 981(a)(1)(A)) 22 23 24 508. Paragraphs 1 through 501 above are incorporated by reference as if fully set forth herein. 509. The Defendant Asset was involved in, and is traceable to property involved 25 in, one or more transactions, or attempted transactions in violation of section 18 U.S.C. 26 § 1956(a)(1)(B)(i) and a conspiracy to commit such offenses in violation of section 18 27 U.S.C. § 1956(h). Specifically, the Defendant Asset was involved in and is traceable to 28 property involved in one or more financial transactions, attempted transactions, and a 133 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 134 of 136 Page ID #:134 1 conspiracy to conduct or attempt to conduct such transactions involving the proceeds of 2 specified unlawful activity, that is: (i) a foreign offense involving the misappropriation 3 of public funds by or for the benefit of a public official (18 U.S.C. § 1956(c)(7)(B)(iv)); 4 (ii) fraud by or against a foreign bank (18 U.S.C. § 1956(c)(7)(B)(iii)); (iii) wire fraud 5 (18 U.S.C. § 1343); and/or (iv) international transportation or receipt of stolen or 6 fraudulently obtained property (18 U.S.C. § 2314), and receipt of stolen money (18 7 U.S.C. § 2315), and were designed in whole or in part to conceal or disguise the nature, 8 the location, the source, the ownership or the control of the proceeds of the specified 9 unlawful activities in violation of 18 U.S.C. § 1956(a)(1)(B)(i). 10 11 510. The Defendant Asset is therefore subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(A). 12 FOURTH CLAIM FOR RELIEF 13 (18 U.S.C. § 981(a)(1)(A)) 14 15 16 511. Paragraphs 1 through 501 above are incorporated by reference as if fully set forth herein. 512. The Defendant Asset was involved in, and is traceable to property involved 17 in, one or more transactions or attempted transactions in violation of section 18 U.S.C. 18 § 1956(a)(2)(B) and a conspiracy to commit such offenses in violation of section 18 19 U.S.C. § 1956(h). Specifically, the Defendant Asset was involved in and are traceable to 20 funds that were and were attempted to be, transported, transmitted, or transferred, and a 21 conspiracy to transport, transmit, or transfer, to a place in the United States from or 22 through a place outside the United States, with the knowledge that the funds involved in 23 the transportation, transmission, or transfer represented the proceeds of some form of 24 unlawful activity and knowledge that such transportation, transmission, or transfer was 25 designed in whole or in part to conceal or disguise the nature, the location, the source, 26 the ownership, or the control of the proceeds of specified unlawful activities, that is: (i) a 27 foreign offense involving the misappropriation of public funds by or for the benefit of a 28 public official (18 U.S.C. § 1956(c)(7)(B)(iv)); (ii) fraud by or against a foreign bank (18 134 Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 135 of 136 Page ID #:135 1 U.S.C. § 1956(c)(7)(B)(iii)); (iii) wire fraud (18 U.S.C. § 1343); and/or (iv) international 2 transportation or receipt of stolen or fraudulently obtained property (18 U.S.C. § 2314), 3 and receipt of stolen money (18 U.S.C. § 2315). 4 5 513. The Defendant Asset is therefore subject to forfeiture pursuant to 18 U.S.C. § 981(a)(1)(A). 6 WHEREFORE, plaintiff United States of America prays that: 7 (a) due process issue to enforce the forfeiture of the Defendant Asset; 8 (b) due notice be given to all interested parties to appear and show cause why 9 10 11 12 forfeiture should not be decreed; (c) this Court decree forfeiture of the Defendant Asset to the United States of America for disposition according to law; and (d) for such other and further relief as this Court may deem just and proper, 13 together with the costs and disbursements of this action. 14 Dated: July 20, 2016 Respectfully submitted, 15 16 M. KENDALL DAY Chief, AFMLS 17 18 EILEEN M. DECKER United States Attorney 19 20 21 22 23 24 25 /s/John J. Kucera JOHN J. KUCERA CHRISTEN A. SPROULE Assistant United States Attorneys WOO S. LEE Deputy Chief, AFMLS KYLE R. FREENY Trial Attorney, AFMLS 26 27 Attorneys for Plaintiff UNITED STATES OF AMERICA 28 135 Case Document 1 Filed 07/20/16 Page 136 of 136 Page ID #:136 VERIFICATION I, Robert B. Heuchling, hereby verify and declare under penalty of perjury that I am a Special Agent with the Federal Bureau of Investigation, that I have read the foregoing Veri?ed Complaint for Forfeiture In Rem and know the contents thereof, and that the matters contained in the Veri?ed Complaint are true to the best of my knowledge and belief. The sources of my knowledge and information and the grounds of my belief are of?cial ?les and records of the United States, publicly available ?les and historical information, information supplied to me by other law enforcement of?cers, experts, and other witnesses, as well as my investigation in this case, together with others, as a Special Agent of the Federal Bureau of Investigation. I hereby declare under penalty of perjury that the foregoing is true and correct. Executed this 20th day of July, 2016, at Los Angeles, California. erf ?eucl%g Special Agent Federal Bureau of Investigation 136