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Malaysia arrests former spies for possible 1MDB-linked graft

Malaysia’s former spy chief Hasanah Abdul Hamid after her arrest WednesdayEight former agents from Malaysia’s foreign intelligence agency were arrested this week for allegedly stealing $12 million in government funds.

The arrests are part of an investigation by the Malaysian Anti-Corruption Commission or MACC.

The agents worked for the Malaysian External Intelligence Organization or MEIO. Its former chief, Hasanah Abdul Hamid, was arrested earlier this week for allegedly diverting election funds.

MACC deputy commissioner Azam Baki told the press Thursday, “We are looking into possible abuse of power by the officers involved, and the misuse of funds, which we believe were government funds.”

Investigators recovered about $6.5 million in cash and valuables from MEIO’s headquarters in Malaysia’s capital, Putrajaya, and other locations.

Azam said police also detained a Malaysian businessman with permanent residence status in the United Kingdom.

The money recovered from MEIO was probably brought into Malaysia from another country, Azam said.

He didn’t directly link the money to the 1MDB scandal. But investigators are “looking into that angle also,” Azam said.

1MDB, short for 1Malaysia Development Berhad, was a sovereign wealth fund set up in 2009. Malaysian officials and others allegedly looted the fund, diverting up to $4.5 billion, according to the U.S. Justice Department and investigators in Switzerland and Singapore.

Earlier this month, former Prime Minister Najib Razak was charged in Malaysia with laundering about $10 million allegedly stolen from a unit of 1MDB.

He pleaded not guilty in court.

Najib headed 1MDB from 2009 until his ruling coalition lost power in elections in May.

Under the new prime minister, Mahathir Mohamad, police have seized $273 million worth of cash, jewelry, handbags, watches, and other valuables from houses and condos owned by Najib and his wife.

A month ago, Indonesia returned to Malaysia a $250 million yacht allegedly bought with money stolen from 1MDB.

The U.S. DOJ alleged in 2016 court filings that more than $4.5 billion was looted from 1MDB from 2009 through 2015 “by high-level officials” of the fund and their associates. Najib wasn’t named.

The DOJ filed forfeiture actions against nearly $1.7 billion of 1MDB-linked assets.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

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