US Department of Justice moves to seize Oceanco Equanimity

Mon Jun 19 2017, 10:06 AM

A lawsuit was filed in a Los Angeles federal court last week

The US Department of Justice has filed a lawsuit that could potentially allow it to seize the Oceanco Equanimity. The suit was filed last week in a Los Angeles federal court, according to The Financial Times.

The lawsuit, which seeks permission to seize the 300ft Equanimity, a Picasso painting, jewellery and rights to the movie Dumb and Dumber, is part of a US effort to recover funds that were allegedly stolen from the Malaysian sovereign wealth fund 1MDB. The US agency said these items were purchased from assets from an illegal money-transfer operation that ran from 2009 until 2015. The lawsuit alleges that US$4.5bn was stolen by Malaysian public officials and their associates including Jho Low, a Malaysian businessman listed as the owner of the superyacht.

Kendall Day, acting deputy assistant attorney-general for the DoJ, told The Financial Times that this represents the largest US seizure action under a Department of Justice initiative for recovering money stolen by corrupt foreign officials. Day said the latest action was aimed at recovering “proceeds of a massive fraud”.

The lawsuit alleges that the fraud involved US$1.2bn that 1MDB borrowed from Deutsche Bank in 2014. About US$850m was allegedly siphoned off by Low and an official identified as “Malaysian official 1,” according to the court documents. In previous court filings, Malaysian official 1 matched a description of Malaysian Prime Minister Najib Razak. Both have denied any wrongdoing.

Low said on Thursday that “the US Department of Justice’s latest move continues its inappropriate efforts to seize assets despite not having proven that any improprieties have occurred. This week’s activity from the DoJ is a further example of global over-reach in pursuit of a deeply flawed case.”

Day told the paper that the pilfered money was channeled through a network of bank accounts in different countries. None of the 1MDB fund’s investments have ever paid off, despite efforts to make it look profitable. The fund eventually defaulted on the US$1.2bn loan.

Equanimity was valued at US$261m in the lawsuit. The 300ft Oceanco, delivered to Low in 2014, has a helicopter pad, gymnasium, cinema, and plunge pool, according a charter listing. The lawsuit also listed several diamonds the DoJ wants seized, including a 12-carat heart-shaped item, and the painting “Nature Morte au Crane de Taureau” by Picasso.