KUALA LUMPUR, Sept 1 — The US government has filed a civil suit in a bid to seize an artwork by famous Spanish artist Pablo Picasso, which it claimed was purchased by Malaysian Jasmine Loo using US$1.3 million misappropriated from 1Malaysia Development Berhad (1MDB).
Based on a US court filing on August 28 via a forfeiture complaint, the US government wants to forfeit Pablo Picasso’s pencil on paper drawing known as “Trois Femmes Nues et Buste D’Homme”, as well as all the funds and assets in a Switzerland-based bank’s bank account held under the name of Loo’s Glen Vine Partners Limited. The current balance of Glen Vine’s bank account at the “ONE Swiss Bank” is approximately US$432,203.01 (over RM2 million at today’s currency exchange rate).
From the 48-page court papers sighted by Malay Mail, the US government said both the Pablo Picasso artwork and the money in the Glen Vine bank account were bought in New York in 2014 with money either unlawfully diverted from 1MDB or which can be traced back to the Malaysian sovereign investment company’s funds.
The US government said this meant that these assets could be forfeited as they are properties that are related to violations of US laws, including offences relating to money laundering; misappropriation of public funds by or for the benefit of a public official; and the receiving of stolen money and international transportation or receiving of stolen or fraudulently obtained property.
The US government said 1MDB subsidiary 1MDB Global Investments Limited (GIL) had taken on debts by issuing a US$3 billion bond in March 2013, and claimed that funds misappropriated from this 1MDB bond sale were used by Loo to buy the Pablo Picasso drawing in 2014.
According to the US government, money originating from the US$3 billion bond flowed from 1MDB GIL through several accounts before eventually reaching Loo’s personal bank account.
The alleged money flows originating from 1MDB GIL included a US$6 million sent in July 2013 to the BSI Bank, Singapore account of Springbrook Global Limited, which the US government said is beneficially owned by Loo.
Springbrook was formed in the British Virgin Islands in March 2013 and its bank account was opened in April that same year.
According to the US court filing, Loo allegedly transferred US$1.9 million on May 7, 2014 from the Springbrook account to her personal account at BSI Bank in Singapore.
The US government said the Christie’s Auction House in New York had on May 13, 2014 given Loo an invoice for the Pablo Picasso drawing, with total sales price including tax being US$1,377,268.75.
“On or about June 24, 2014, Loo transferred approximately US$1,377,293 from her personal account at BSI Bank in Singapore to an account at Christie’s to complete her purchase of the TROIS FEMMES NUES DRAWING,” the US government said in the court papers.
Malay Mail’s checks of the website for Christie’s shows that the 1969 pencil drawing carrying Picasso’s signature was sold on May 13, 2014 at a realised price of US$1.265 million.
As for the Glen Vine account, the US government said Loo had set up the company Glen Vine Partners Limited in the British Virgin Islands in October 2014 with Loo being the company’s sole beneficial owner, and that she had in November 2014 opened a bank account at Falcon Bank in Switzerland for Glen Vine Partners.
The US government claimed that Loo had on April 7, 2015 transferred US$1.25 million in misappropriated 1MDB funds ― traceable to Deutsche Bank loans borrowed by a 1MDB subsidiary in 2014 ― into the Glen Vine account at Falcon Bank.
All the funds in the Glen Vine account at Falcon Bank are now in a new account at the Swiss bank which took over Falcon Bank, with the current balance being about US$432,203.01. The bank which acquired Falcon Bank is known as the “ONE Swiss Bank”, and this is the bank where the funds which the US government is seeking to forfeit are located.
According to the US court filing, Loo was described as having served as 1MDB’s general counsel and executive director of group strategy at least during the years 2012 and 2013, and was a main point of contact between 1MDB and investment bank Goldman Sachs for three bonds issued by 1MDB companies in 2012 and 2013.
The US government’s forfeiture claim was filed at the US district court for the central district of California, as the acts and omissions giving rise to the forfeiture took place in that district.
Among other things, the US government in the court filing said billions of dollars were fraudulently diverted from 1MDB for the personal use and benefit of those involved in the conspiracy to illegally take away and launder about US$4.5 billion of 1MDB’s money.
The US government said these misappropriated 1MDB money were used for the co-conspirators’ benefit and their relatives or associates, including to buy luxury properties in the US and other countries and to buy luxury yachts, pay for gambling expenses at Las Vegas casinos, buy over US$200 million in artwork, buy jewellery, buy lavish gifts for family members and associates, to hire musicians and celebrities to attend parties, and to fund the production of major Hollywood films.
“The use of the diverted 1MDB funds for the personal benefit of the co-conspirators and their associates was not consistent with the purposes for which 1MDB raised the funds, and neither 1MDB nor the government of Malaysia realized any returns on these purchases and expenditures,” the US government had said in the court filing regarding the entire 1MDB financial scandal widely linked to individuals such as Malaysian fugitive Low Taek Jho.
Loo, who was 1MDB’s in-house lawyer, was arrested by Malaysian police in early July after years outside the country to escape the law.
Her lawyers saying that her surrender was voluntary and that she would cooperate with 1MDB investigations and help Malaysia recover assets from 1MDB.
Former prime minister Datuk Seri Najib Razak is currently on trial over RM2.28 billion of misappropriated 1MDB funds alleged to have entered his personal bank accounts from 2011 to 2014 and with hearing set to resume on September 18, with the prosecution saying this week that Loo could potentially be called as a prosecution witness in the trial.