More than seven years after revelations that hundreds of millions of dollars were inappropriately transferred from disgraced Malaysian financier Jho Low’s 1MDB fund, the fallout continues. U.S. authorities are continuing their pursuit of certain assets—including a reported $200 million worth of illicitly acquired artwork.
The most recent filing is a 46-page document, filed by Margaret A. Moeser, acting chief for the U.S. Money Laundering and Asset Forfeiture Section (MLARS) on August 28. Moeser and several others are listed as attorneys on behalf of the plaintiff, which is the U.S. A copy of the lawsuit, which was filed in the U.S. District Court for the Central District of California, was provided to Artnet News by David Marchant, founder, owner and editor of Miami-based Offshore Alert. Neither Moeser nor her office responded to a request for comment.
As the U.S. government has done in past 1MDB asset seizures, it named the specific property it is seeking to forfeit as the “defendant.” In this case, the defendant is a seven-figure Picasso drawing, Trois femmes nues et buste d’homme (1969) that was acquired for $1.3 million at Christie’s New York in May 2014, far surpassing its estimate of $700,000 to $900,000.
According to the complaint, the Picasso was purchased by Jasmine Loo Ai Swan, the former general counsel of 1MDB, who “by most counts is ranked just below one-time globe-trotting financier Low Taek Jho [aka Jho Low] in the current list of Malaysia’s most-wanted corporate outlaws,” according to an extensive report on Channel News Asia (CNA).
“In or about June 2014, Loo used funds traceable to the misappropriated proceeds of the 2013 ‘Project Catalyze’ bond sale… to acquire the Trois Femmes Nues drawing,” according to the U.S. complaint. The money that was diverted for Loo to acquire the drawing is a relative drop in the bucket when considered against the backdrop of a massive—and frequently mind-boggling—embezzlement scheme as laid out in the government case, especially since a total of approximately $2.72 billion, “representing the proceeds of the Project Catalyze bond sale, was transferred from Bank of New York Mellon into the BSI-Lugano account of 1MDB Global.”
It is unclear where the Picasso drawing is physically located at the present time. Previous seizure efforts involved artwork by Jean-Michel Basquiat, Claude Monet, Vincent van Gogh, and Andy Warhol to name a few.
The complaint lays out that the “criminal conduct alleged in this Complaint occurred in at least four principal phases.” The phase most closely associated with art was the so-called “Tanore” phase, a reference to Low’s associate Eric Tan.
As Artnet News reported in 2016, the Department of Justice previously alleged that from about May through September of 2013, funds from an account, with the title “Tanore,” were used to purchase about $137 million in art. The account was said to be controlled by Tan—who was also reportedly under investigation by Singapore authorities—for the personal benefit of both himself and Low. Funds in the account were claimed to have been proceeds of a bond sale made by Low’s company 1MDB that were “diverted through the Tanore Account.”
According to the current complaint, although the Tanore account “had no legitimate connection to 1MDB, then executive director Loo was an authorized signatory on the account. “1MDB funds transferred into the Tanore Account were used for the personal benefit of Low and his associates, including officials at 1MDB, rather than for the benefit of 1MDB or ADMIC. As set forth below, the Trois Femmes Nues drawing is traceable to funds diverted through this phase,” according to the papers.
The government has also pursued assets that were allegedly illicitly acquired with diverted 1MDB funds ranging from the aforementioned artwork to luxury real estate including hotels and condominiums, a Bombardier jet, and jewelry. The investigation found that some of the appropriated funds were used to finance the movie The Wolf of Wall Street.
Attorneys for Jasmine Loo did not respond to request for comment. According to CNA, in July, after years on the run, fugitive Loo returned to Malaysia in a covert government operation.
According to the report, in early April, attorneys for Loo reached out to top officials at the Home Ministry in Kuala Lumpur with a request from her “to explore the prospect of returning home after five years on the run and to negotiate a legal settlement to criminal charges over the financial scandal around [1MDB].”
Loo reportedly also promised to cooperate with Prime Minister Anwar Ibrahim’s government in its asset recovery campaign, sources with direct knowledge of the matter told CNA.