KUALA LUMPUR – The United States Justice Department (DoJ) has served a warrant to seize US$330 million (RM1.34 billion) from a top law firm in the United Kingdom, said to be proceeds of stolen funds from state investment arm 1Malaysia Development Bhd.
The arrest warrant in rem was served by the UK’s National Crime Agency, on behalf of the DoJ, on Clyde & Co’s London office on October 29, 2020, according to the Guardian, citing court documents.
The report claims that the money, which the elite law firm is holding on behalf of a client, is kept in a bank account at a National Westminster Bank, a major retail and commercial bank in the UK.
It said that the DoJ alleged that the US$330 million is part of a US$4 billion in stolen funds embezzled from 1MDB, laundered to bribe and finance lavish lifestyles of certain individuals and fund Hollywood movies.
The Guardian claimed specialist DoJ anti-money laundering prosecutors had alleged that the money held by Clyde & Co is the last remaining proceeds of the first phase of the 1MDB fraud.
The first phase, dubbed by the DoJ as the “Good Star phase”, involves the misappropriation of more than US$1 billion from 1MDB, of which US$700 million meant for a joint venture with PetroSaudi International was diverted to a company owned by fugitive Low Taek Jho in 2009.
The remaining US$300 million stayed with PetroSaudi, an oil company established by Saudi businessman Tarek Obaid and a member of the Saudi royal family.
Obaid, who was said to be key in orchestrating the fraud and who was charged here last year, has denied any wrongdoing.
The Guardian said Malaysian and US prosecutors have begun focusing their attention on funds held by Clyde & Co, which are alleged to be proceeds of the 1MDB-PetroSaudi joint venture, last year.
Citing DoJ, the report went on to claim that PetroSaudi had used 1MDB funds to procure two secondhand and ageing drillships, in order to secure a contract with Venezuela’s Petróleos de Venezuela (PDVSA).
However, when PDVSA refused to pay PetroSaudi’s invoices for the drilling in Venezuela, the latter sought payment through a standby letter of credit from a Portuguese bank.
PDVSA then challenged PetroSaudi’s entitlement to this bank guarantee at an arbitration tribunal in 2015.
PetroSaudi hired Clyde & Co to represent the company in the dispute, and ultimately won the case and was awarded US$380 million, the majority of which were placed in the law firm’s escrow account.
Last year, PetroSaudi sued Clyde & Co after the latter refused the oil company’s requests to make payments from the escrow account, citing fears that it could become liable to criminal charges if it allows the transactions. – The Vibes, February 8, 2020
