Wednesday, May 18, 2022

Offshore groups that channelled 1MDB funds now used to track down stolen money, report says

The groups believe that US$1.15 billion stolen from SRC International has 'fallen through the cracks', Bloomberg reports.

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A number of offshore companies once used to channel hundreds of millions of dollars from 1MDB have been repurposed for use in efforts to track down the money stolen from the state investment fund, Bloomberg reports.

According to the report, the three offshore entities based in the British Virgin Islands said in a bankruptcy filing in the US that they were “part of the fraud perpetrated against 1MDB”.

The report also said that some were likely created with the sole aim of receiving stolen money or transferring them to other entities.

The three companies had filed for bankruptcy under a section of US law allowing foreign debtors to bring proceedings into the states, it said.

It said their aim was to recover some of the US$8.5 billion believed to have been stolen from 1MDB, “some of which may be in the US”.

The 1MDB scandal made international headlines with authorities in at least six countries including the US and Switzerland launching investigations related to the sovereign wealth fund.

In the US, a jury has begun deliberations in the trial of former Goldman Sachs banker Roger Ng who is accused of helping his ex-boss Tim Leissner embezzle money from 1MDB, launder the proceeds and bribe officials to win business for Goldman.

According to the Bloomberg report, the offshore entities are currently being overseen by administrators appointed by Putrajaya.

The bankruptcy filing, known as Chapter 15 filing, is meant to help such administrators collect information from those involved in the deals and to seize any assets they are able to located, the report added.

It also quoted the entities as saying they believed that US$1.15 billion stolen from former 1MDB unit SRC International had “fallen through the cracks”.

“There are companies and trusts that are yet to be uncovered related to the fraud,” their lawyers were quoted as saying in court papers.

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