US Department of Justice returns $452 million in recovered 1MDB funds to Malaysia

Malaysia on May 12 said that the US Department of Justice has returned $452 million of funds recovered from assets related to sovereign fund 1Malaysia Development Berhad (1MDB). According to Bloomberg, Malaysian and the US investors had said that at least $4.5 billion was stolen from 1MDB between 2009 and 2014, in a wide-ranging scandal that implicated high-level officials, banks and financial institutions around the world. The US has been returning funds it has recovered from seized assets that were allegedly bought with stolen 1MDB money. 

On Wednesday, the Malaysian Finance Ministry in a statement said that the US DOJ remitted about 1.9 billion ringgit of seized 1MDB funds to the government. The ministry added that funds have now been placed in Malaysia’s Assets Recovery Trust Account. Further, it added that so far, the account has received 16.05 billion ringgit of seized and repatriated 1MDB funds, which will be used to repay debts of 1MDB and former unit SRC Internations Sdn. 

The finance ministry also informed that the Malaysian government has so far repaid 12.4 billion ringgit of 1MDB’s debt and 3.1 billion of SRC’s debt. The balance of debts still outstanding currently totals 39.8 billion ringgit (1MDB) and 2.57 billion ringgit (SRC). The balance excludes the settlement amount that will be received by Deloitte PLT and AmBank Group, Malaysia said, adding that negotiations are also currently ongoing with KPMG. 

1MDB files 22 lawsuits to recover assets 

As per reports, over the last three years, Malaysia has been trying to recover 1MDB funds from global banks, financial institutions, individuals and other entities it says have caused losses from the 1MDB scandal. Earlier this week, 1MDB even filed 22 lawsuits in a court in Malaysia to recover assets worth in excess of $23 billion. Those being sued include Deutsche Bank, J.P. Morgan and Coutts & Co. 

Wall Street giant Goldman Sachs, which helped raise billions for 1MDB, has already paid $2.5 billion to settle a Malaysian probe into the investment bank's role in the 1MDB scandal. It reached the settlement with the Malaysian government in exchange for criminal charges being dropped. It had reportedly also promised to help Malaysia recover assets with $1.4 billion. 

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