NEW YORK • In its latest move to recover funds allegedly siphoned from Malaysian state fund 1Malaysia Development Berhad (1MDB), the US Justice Department has asked a US federal court to approve a plan to sell financier Jho Low’s stake in Park Lane Hotel, New York.
The Wall Street Journal reported that the motion, jointly filed in Los Angeles on Monday with property developer Steven Witkoff, will help stabilise the finances of the ailing hotel and set up a process for selling Mr Low’s 55 per cent stake in the property, estimated to be worth US$380 million (S$535 million).
Mr Low is said to be a close confidant of Malaysian Prime Minister Najib Razak. Both have been linked to the alleged misappropriation of more than US$3.5 billion from the state fund from 2009 to 2015, but neither of them has been charged with a crime in connection with it.
Mr Low has denied any wrongdoing, and stated that he provided consulting services to 1MDB. Datuk Seri Najib has also denied any wrongdoing, and said allegations were an attempt to smear him politically.
Last July, US prosecutors launched a civil action to recover some US$1 billion of these funds allegedly laundered through the US.
They said some of the missing funds were used to buy luxury homes in the US and London, a Bombardier jet and artworks, and to finance the movie The Wolf Of Wall Street, among other things.
The motion filed on Monday is part of this broader recovery effort.
Mr Witkoff led an investor group which, along with Mr Low and his family, bought the Park Lane Hotel in 2013, in a deal that valued the trophy property at US$654 million.
According to the Wall Street Journal, court papers state that Mr Low and his family provided the lion’s share of the equity, with “proceeds derived from or involved in fraud, misappropriation and other violations of US and foreign law”.
The group’s plans to convert the hotel into a luxury condominium were stalled by the Justice Department’s civil suit, as they were unable to obtain the requisite financing and state government approvals.
If approved, the motion would enable them to shore up the hotel’s finances and proceed with their development plans, without Mr Low. – The Straits Times