The U.S. Department of Justice (DOJ) has filed civil forfeiture proceedings against $330 million of assets held in escrow by Clyde & Co that the former says are related to the multibillion-dollar scandal surrounding Malaysian state fund 1Malaysia Development Berhad (1MDB).
Based on a 300-page complaint, the DOJ says that the assets have been held in a Clyde & Co account as damages awarded by a 2017 UNCITRAL arbitration between PetroSaudi International, a private Saudi oil extraction company, and Venezuelan oil company PDVSA. PetroSaudi entered into a contract with PDVSA in 2009 for drilling rights in Venezuela, but no oil was found to have been produced.
The DOJ adds that between 2009 and 2011, under the pretence of investing in an energy concessions joint venture with PetroSaudi, officials of 1MDB and others arranged for the fraudulent transfer of more than $1 billion to a Swiss bank account held in the name of Good Star.
The complaint further states that officials at 1MDB caused diversion of funds to the Good Star account, which was beneficially owned by Jho Low, a Malaysian national who had no formal position with 1MDB, and not by PetroSaudi or the joint venture.
1MDB is at the heart of a corruption scandal involving former Malaysian prime minister Najib Razak. According to The Guardian, U.S. and Malaysian prosecutors claim that around $4.5 billion was siphoned from the state fund and laundered through an elaborate network of offshore bank accounts and shell companies to pay bribes, purchase luxury properties, and fund Hollywood movies.
In a statement, Clyde & Co claimed that it “holds itself to the highest professional and ethical standards and fully complies with all legal and regulatory obligations”, the Guardian added.
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