Malaysia’s former prime minister Najib Razak was arrested Tuesday at his mansion in Kuala Lumpur and will be charged Wednesday in connection with the looting of billions of dollars from a government sovereign wealth fund.
A police statement said Najib will be charged initially for stealing about $10 million from a unit of 1MDB called SRC International.
The U.S. Justice Department has alleged in 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. He was chairman of 1MDB while he was prime minister.
The DOJ has filed forfeiture actions against nearly $1.7 billion in assets linked to 1MDB, short for 1Malaysia Development Berhad.
In 2015, the Wall Street Journal reported that Najib deposited about $700 million from 1MDB into his personal accounts.
Najib, 64, has always denied the allegations. A government panel he appointed in Malaysia cleared him of wrongdoing.
He was prime minister from 2009 until his ruling coalition lost power in elections in May. The coalition had ruled for six decades.
The new prime minister, Mahathir Mohamad, 92, led Malaysia from 1981 to 2003. After he switched to the opposition, he promised to investigate the looting of 1MDB and Najib’s alleged role.
During raids on houses and condos owned by Najib and his wife Rosmah Mansor, Malaysian police seized $273 million worth of jewelry, handbags, and other valuables.
Amar Singh, the head of Malaysia’s commercial crime unit, said the raids resulted in the “biggest seizure in Malaysian history.”
At one condo, police filled five trucks with bags of cash, boxes of handbags, and other property.
Overall, police seized cash in 26 currencies with a total value of $28.6 million.
They confiscated 457 handbags, including Hermes bags that alone are worth $12 million.
Also seized were 423 watches valued at $19 million, police said, along with 234 sunglasses worth $93,000.
Twelve thousand pieces of jewelry were found in 25 bags. Included were 1,400 necklaces, 2,200 rings, 2,100 bangles, 2,800 pairs of earrings, 1,600 brooches and 14 tiaras, police said. The jewelry could be worth around $180 million.
Malaysian prime ministers are paid a fixed salary of about $5,600 a month and as members of parliament they can earn another $4,000.
Richard L. Cassin is the publisher and editor of the FCPA Blog.