DOJ Goes After PetroSaudi, Abu Dhabi's Royal Topaz Yacht And More!

Thanks to that arbi­tra­tion (the details of which PetroSaudi are now fight­ing to keep secret from an open London court) it is appar­ent that Venezuela returned the $300 mil­lion to PetroSaudi, which is now being held in the Clyde & Co client escrow account in London.

Sarawakreport.Org, 17 September 2020,

The game-chang­ing asset seizure fil­ing issued September 16th by the Department of Justice has zeroed in on key play­ers in the 1MDB scan­dal, who after sev­er­al years of keep­ing below the radar have been seek­ing to escape cen­sure and punishment.

These enti­ties include some of the most pow­er­ful indi­vid­u­als and com­pa­nies in the Middle East and one of the world’s most expen­sive super-yachts, Topaz (now renamed “A+”), reg­is­tered as belong­ing to Man City Football Club own­er Sheikh Mansour.

It also claims seizure of a clutch of fur­ther assets from Riza Aziz’s col­lec­tion of rare posters and film mem­o­ra­bil­ia, just weeks after the PN gov­ern­ment effec­tive­ly let him off the hook with a ‘plea deal’ that demand­ed noth­ing fur­ther from him.

The accu­mu­lat­ed fil­ing, which now stretch­es to 300 pages, states that it is an update on sev­er­al pre­vi­ous 1MDB asset seizures relat­ed to the mon­ey laun­der­ing of bil­lions stolen from the Malaysian fund fol­low­ing the biggest ever joint inves­ti­ga­tion by the FBI and DOJ’s joint klep­toc­ra­cy unit.

The new tar­gets, main­ly fea­tur­ing the 1MDB ‘join ven­ture part­ner’ PetroSaudi, address cor­rupt prac­tices that have so far escaped the main spot­light of the inves­ti­ga­tion, despite numer­ous arti­cles by Sarawak Report. These are named at the top of the indict­ment as “PetroSaudi International; PetroSaudi Oil Services (Venezuela) Ltd.; 1MDB PetroSaudi, Ltd.; Tarek Obaid; and Patrick Mahony.”

It is the first time that the two direc­tors of PetroSaudi, Tarek Obaid and Patrick Mahony, have been specif­i­cal­ly named as top tar­gets of the crim­i­nal affair, despite hav­ing been iden­ti­fied as key play­ers in the orig­i­nal bil­lion dol­lar heists using the so-called joint ven­ture between their com­pa­ny PetroSaudi and 1MDB.

Significantly, the DOJ cites the fraud­u­lent deal in which PetroSaudi invest­ed mon­ey from 1MDB in Venezuela through its com­pa­ny PetroSaudi Oil Services (Venezuela) Ltd. Thanks to alleged bribery and cor­rup­tion involv­ing Venezuelan offi­cials PetroSaudi was able to reap vast prof­its which have been sub­se­quent­ly con­test­ed by the Venezuelan authorities.

These assets include four dozen pro­mo­tion­al movie posters that Riza Aziz acquired with more than $4 mil­lion in funds trace­able to assets embez­zled from 1MDB as well as an escrow account main­tained in the United Kingdom hold­ing more than $300 mil­lion.  As alleged in the com­plaint, the funds in this escrow account are trace­able to a line of cred­it extend­ed by Petroleos de Venezuela S.A. (PDVSA) to PetroSaudi Oil Services (PetroSaudi) in con­nec­tion with the use of two drill ships that PetroSaudi acquired with funds fraud­u­lent­ly obtained from 1MDB. [DOJ press statement]

The tim­ing is of immense sig­nif­i­cance for Malaysia’s in that it comes just as the coun­try is seek­ing to con­fis­cate those prof­its made by PetroSaudi, none of which were ever returned to 1MDB which had pro­vid­ed the orig­i­nal invest­ment money.

Owing to locked in prof­it agree­ments and an agreed Letter of Credit Venezuela has found it impos­si­ble to get the UK courts to return the mil­lions of dol­lars de-fraud­ed back to their coun­try, how­ev­er Malaysia is in the mid­dle of a court bat­tle to extract the cash from PetroSaudi itself.

Over $300 mil­lion is sit­ting cur­rent­ly in a client account of the law firm Clyde & Co in London and just this week PetroSaudi’s lawyers sought to get the UK courts to agree to a secret hear­ing to hide the details of those Venezuela agree­ments. All of this manoeu­vring  ought to be thrown into dis­rup­tion by the rival bid by the United States Justice Department to seize the same prof­its on grounds of mon­ey laun­der­ing in the first place.

It’s all good news for Malaysia which stands to obtain the mon­ey either way, although Najib’s posi­tion in the coup coali­tion and lack of account­abil­i­ty are now cloud­ing whether the cur­rent gov­ern­ment will use the mon­ey to refund 1MDB debt as it is oblig­ed to do.

Abu Dhabi Centre Frame At Last

Equally help­ful for those Malaysians who want to see prop­er account­abil­i­ty from Abu Dhabi is that the fil­ing also moves sig­nif­i­cant­ly against the 1MDB relat­ed cor­rup­tion involv­ing senior fig­ures at Mubadala, one of the oil state’s largest sov­er­eign wealth funds. The case has even start­ed to entan­gle senior roy­al fig­ures – and their super-yachts.

This could under­mine moves for a set­tle­ment sig­nalled by the new gov­ern­ment in Malaysia with Abu Dhabi.  Sarawak Report has recent­ly flagged up warn­ings that the present coup coali­tion appears to have revert­ed to the Najib government’s pre­vi­ous pol­i­cy of cov­er-up and secret arbi­tra­tions at Malaysia’s own expense.

However, the DOJ action now includes a claim of $160 mil­lion against one of the world’s largest yachts, Topaz, on behalf of 1MDB, which could leave the Gulf state and its roy­al own­er, the IPIC boss Sheikh Mansour, fur­ther exposed as more details emerge.

Mubadala Boss Was Bribed $10 Million

So far, Abu Dhabi has sought to dis­tance the emi­rate from the case by claim­ing that only two offi­cials, name­ly Khadem Al Qubaisi and Mohamed al Husseiny were involved from the funds Aabar/IPIC, which have since been merged into the mega-fund Mubadala which is one of the biggest sov­er­eign wealth funds in the world. Both Al Qubaisi and Al Husseiny have been jailed and Abu Dhabi has treat­ed its crim­i­nal case as closed.

However, the DOJ fil­ing has now iden­ti­fied anoth­er senior offi­cial who con­tin­ues at this very moment to hold a top senior posi­tion in Mubadala itself as hav­ing received 1MDB fund­ed bribes from Jho Low, appar­ent­ly relat­ing to the fund’s engage­ment in Jho Low’s now noto­ri­ous pur­chase of inter­ests in the New York Park Lane hotel.Ali Eid Khamis Thani Al Mheiri, Head of Mubadala Real Estate Division accused of receiving bribes over Jho Low's Park Lane Hotel investment

Ali Eid Khamis Thani Al Mheiri, Head of Mubadala Real Estate Division accused of receiv­ing bribes over Jho Low’s Park Lane Hotel investment

According to the DOJ fil­ing, Ali Eid Khamis Thani Al Mheri received US$10 mil­lion stolen from the $975 mil­lion loan grant­ed by Deustche Bank in 2014.

The loan has been the sub­ject of tes­ti­mo­ny just this week dur­ing the tri­al of ex-PM Najib Razak over 1MDB, as the for­mer CEO of the fund dis­closed he was not even con­sult­ed over the rais­ing of the vast sum that was signed off by Najib and processed by Jho Low and his legal side-kick, Jasmine Loo (appoint­ed as legal coun­sel to the company).

MUBADALA EXECUTIVE RECEIVED FUNDS DIVERTED FROM THE 2014 DEUTSCHE BANK LOANS

1042. In or around November and December 2014, Ali Eid Khamis Thani Al Mheiri (“Al Mheiri”), Chairman of the Board of the Viceroy Hotel Group (“VHG”) and head of Mubadala Real Estate and Infrastructure (“MREI”) who direct­ly par­tic­i­pat­ed in Mubadala’s deal team for the Park Lane Partnership, received over $10 mil­lion from the Vista Equity Account. These funds are trace­able to the $975 mil­lion loan that Deutsche Bank made to 1MDB in September 2014. As set forth above in Sections VI.J and VI.U, respec­tive­ly, LOW acquired an inter­est in both the Park Lane Partnership and VHG with mis­ap­pro­pri­at­ed 1MDB funds. [Dep of Justice fil­ing – Case 2:20-cv-08466 – 09/16/20]

The pur­pose giv­en for the loan was to assist in buy­ing out options in prepa­ra­tion for an 1PO of 1MDB sub­sidiary pow­er com­pa­nies, launched under a code name Project Virtus by Deutsche Bank, which was brought in on the deal by Goldman Sachs, which is already fac­ing crim­i­nal pro­ceed­ings over 1MDB.

Sarawak Report has fur­ther ques­tioned the pres­ence of two broth­ers of Najib on the board of the Deutsche Bank (Malaysia) sub­sidiary at the time and ques­tioned if con­nect­ed inter­ests were declared as part of due dili­gence by the bank.

Far from being used for the pur­pos­es declared the mon­ey was used for pur­pos­es such as this per­son­al bribe, appar­ent­ly to secure Mubadala’s cru­cial co-invest­ment in the New York hotel.

Later, as the FBI start­ed mov­ing in 2016, Jho Low off-loaded the share onto Hong Kong’s Greenland Properties thanks to an equal­ly fraud­u­lent arrange­ment also exposed by Sarawak Report involv­ing Sheikh Sabah of Kuwait.

The mon­ey, says the DOJ, was used by Al Mheiri to buy pri­vate prop­er­ty in London. Al Mheiri remains in his senior man­age­ment posi­tion at Mubadala to this very day accord­ing to research­es by Sarawak Report.

It is clear­ly the case that the new coup admin­is­tra­tion in Malaysia is scram­bling to cut a deal with Abu Dhabi rather than allow the mat­ter into court to extract a prop­er and full rec­om­pense for the dam­ages incurred as a result of the col­lab­o­ra­tion of cor­rupt offi­cials from its sov­er­eign funds in the plun­der of 1MDB.

Topaz Yacht and “Emirati Official #1″

However, if Malaysia’s pri­or­i­ty is to spare the roy­al Abu Dhabi friends of Najib and indeed the Agong fur­ther embar­rass­ment, it appears the DOJ inves­ti­ga­tion has pro­ceed­ed regard­less of such sensitivities.

The expand­ed DOJ fil­ing now con­firms evi­dence pro­duced by Sarawak Report that huge sums were divert­ed from 1MDB into the pur­chase of Sheikh Mansour’s super-yacht Topaz via the Khadem Al Qubaisi front­ed Vasco Trust account at Edmond de Rothschild Bank in Luxembourg.

According to the inves­ti­ga­tors the yacht $688 mil­lion yacht (5th largest in the world) was bought in 2008 part­ly fund­ed by a $400 mil­lion loan, pro­vid­ed once more by Deutsche Bank.  The offi­cial inves­ti­ga­tors now say a total of $160,930,752 of the repay­ment on that loan was fund­ed by mon­ey stolen from 1MDB that was sent to the Vasco account.

The major­i­ty of this $160,930,752 in mis­ap­pro­pri­at­ed funds fol­lowed the fol­low­ing route. From the Vasco Account, the funds were trans­ferred into an account in the name of Tasameem Investments at Rothschild Bank in Luxembourg. The funds then were trans­ferred into an account in the name of Oceanus Maritime at Deutsche Bank in Germany (“Oceanus account”). [DOJ updat­ed fil­ing]

Moreover, the fil­ing says, Jho Low help­ful­ly char­tered the yacht on five occa­sions for just under $20 mil­lion, again using 1MDB stolen cash. The yacht is now re-named A+, but the own­er is believed to remain Sheikh Mansour:Re-named but still believed to be the property of the Abu Dhabi royal sheikh

Re-named but still believed to be the prop­er­ty of the Abu Dhabi roy­al sheikh

The Department of Justice has yet to cite the yacht as a tar­get for seizure, pend­ing it would seem res­o­lu­tion of the $160 mil­lion claim against Sheikh Mansour.

Likewise, the full details of Mubadala’s engage­ments with Jho Low have not yet been ful­ly cit­ed, although anoth­er joint invest­ment by Jho with Mubadala has already been con­fis­cat­ed, name­ly into the Electrum Group man­aged by the bil­lion­aire Thomas Kaplan who is at the fore­front of the Israeli coali­tion against Iran in the Middle East.

Jasmine Loo

The role of Jasmine Loo, who was cit­ed as one of the ear­li­est indi­vid­u­als want­ed by Malaysian inves­ti­ga­tors over 1MDB and has been in hid­ing with Jho Low since 2015, is fur­ther high­light­ed in this lat­est deposition.Jho's inner circle included Jasmine Loo, legal counsel to 1MDB with million dollar properties now in London funded by the thefts

Jho’s inner cir­cle includ­ed Jasmine Loo, legal coun­sel to 1MDB with mil­lion dol­lar prop­er­ties now in London fund­ed by the thefts

She has already been iden­ti­fied has hav­ing received mul­ti-mil­lion dol­lar bribes from Jho and this week she was iden­ti­fied in court as the key agent for Jho Low in rais­ing the fraud­u­lent Deutche Bank fund­ing for the bogus option pay­ments and Project Virtus.

The fil­ing cites more bribes paid into her pri­vate accounts includ­ing $16 mil­lion paid into a so-called River Dee account at Falcon Bank (then direct­ly owned by IPIC now shut fol­low­ing crim­i­nal inves­ti­ga­tions in Switzerland over 1MDB).

According to the DOJ, “Loo used approx­i­mate­ly $8,954,258 of the funds in the RIVER DEE ACCOUNT to acquire real estate in London and New York as well as make an invest­ment in a Hong Kong-based company.” 

So far, there is no indi­ca­tion that the UK author­i­ties have seized these assets. Loo is believed to be in hid­ing with Jho Low, prob­a­bly in China.

Asset Seizures

Having flagged up its will­ing­ness to put pres­sure and the spot­light on Abu Dhabi (which is con­tin­u­ing to wind down IPIC’s Vegas based Hakkasan hos­pi­tal­i­ty group also linked by Sarawak Report to mon­ey from 1MDB) the DOJ fil­ing only so far seeks con­fis­ca­tion of PetroSaudi’s London cash haul from Venezuela and fur­ther Hollywood mem­o­ra­bil­ia iden­ti­fied as belong­ing to Riza Aziz who has already admit­ted guilt over 1MDB.

The fil­ings claims seizure of dozens of ‘valu­able movie posters’ worth $4 mil­lion bought with 1MDB cash, includ­ing King Kong and Wizard of Oz posters as well as an orig­i­nal poster for the film Citizen Kane.

Crucially, the depo­si­tion cites why the orig­i­nal $300 mil­lion that was sent to PetroSaudi in 2009, sup­pos­ed­ly as part of its ‘joint ven­ture’ with 1MDB is owed back to Malaysia.

Jho Low had already loot­ed the lion’s share of the bogus 1MDB’s invest­ment (which was meant to exploit a non-exis­tent oil con­ces­sion in the Caspian Sea) to the tune of $700 million:

$300 mil­lion was insuf­fi­cient to fund the joint ven­ture that had been pro­posed to 1MDB. Instead, it was used to pur­chase two sec­ond­hand and aging drill­ships, the Songa Saturn and Neptune Discoverer (which were built in 1983 and 1977, respec­tive­ly).
Lacking any remain­ing work­ing cap­i­tal, PetroSaudi18 entered into a con­tract with the Venezulan oil com­pa­ny Petroleos de Venezuela, S.A. (“PDVSA”) for drilling rights in Venezuela. As part of that con­tract, PetroSaudi obtained a line of cred­it from PDVSA, which was even­tu­al­ly drawn down by more than $300 mil­lion.
Substantially zero oil was ever pro­duced under the Venezuelan drilling con­tract. PetroSaudi and PDVSA instead entered into Paris-based arbi­tra­tion under the UNCITRAL rules19 over the failed drilling ven­ture. The arbi­tra­tion cov­ered, inter alia, the fate of the funds that PetroSaudi had drawn down from the PDVSA line of credit.

Thanks to that arbi­tra­tion (the details of which PetroSaudi are now fight­ing to keep secret from an open London court) it is appar­ent that Venezuela returned the $300 mil­lion to PetroSaudi, which is now being held in the Clyde & Co client escrow account in London.

However, the Department of Justice agrees with Malaysia’s cur­rent par­al­lel case against PetroSaudi, stat­ing that “These funds con­sti­tute the DEFENDANT ASSETS in this case“. In con­se­quence the mon­ey should be removed from the clutch­es of Tarek Obaid and Patrick Mahony, who remain in con­trol of PetroSaudi.

The move has raised the stakes in this London case and also the case against Abu Dhabi, which Malaysia has appar­ent­ly agreed to sus­pend pend­ing a set­tle­ment also in the London courts.

sarawakreport.org

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