Malaysia’s 1MDB and a former unit have filed suits against firms including JPMorgan Chase & Co. and Deutsche Bank AG as the nation seeks to recover assets worth more than $23 billion linked to the scandal-plagued state-owned investment fund.
1MDB, whose full name is 1Malaysia Development Bhd., and SRC International Sdn. filed a combined 22 civil suits against a slew of entities and individuals for various alleged wrongdoings including fraud and conspiracy to defraud the fund, the Finance Ministry said on Monday. Among those named were JPMorgan and Deutsche Bank, according to a person familiar with the matter who declined to be identified discussing non-public information.
At least two suits were filed in London, according to publicly-available court records. Deutsche Bank’s Singapore branch faces a lawsuit, while 1MDB separately sued Citigroup Inc.’s head of commodities research Ed Morse alleging professional negligence, the filing shows.
JPMorgan declined to comment while Deutsche said it hasn’t been served any papers on 1MDB and isn’t aware of any basis for a legitimate claim. The banks were named earlier on Monday by the Edge newspaper. New York-based Morse didn’t respond to an email seeking comment outside business hours, and Citigroup couldn’t immediately comment.
The court proceedings mark Malaysia’s continuing efforts to recover billions of dollars allegedly siphoned from 1MDB by people connected to the country’s former prime minister. Over much of a decade, 1MDB has become shorthand for one of the world’s most daring heists — a conspiracy that spawned probes in Asia, the U.S. and Europe.
Authorities have spent years tracking funds that allegedly flowed from 1MDB into high-end art and real estate, a super yacht and, ironically, the hit Hollywood movie “The Wolf of Wall Street,” chronicling an earlier era of financial crimes.
The government has had a string of recent successes, the most high-profile coming last year when Goldman Sachs Group Inc. reached a $3.9 billion pact with Malaysian authorities to resolve probes into the Wall Street giant’s role in the scheme. Goldman’s overall tab for additional settlements with authorities in the U.S., U.K. and Hong Kong swelled to more than $5 billion.
In March, Deloitte PLT agreed to a 324-million ringgit ($80 million) settlement with the Malaysian government to resolve all claims related to the firm’s audit of 1MDB and SRC between 2011-2014. The deal also came less than a week after Malaysian lender AMMB Holdings Bhd. agreed to a $699 million settlement over its role in dealings linked to 1MDB.
A Malaysian court is currently hearing an appeal by ex-Prime Minister Najib Razak to overturn his conviction and 12-year jail sentence linked to the 1MDB scandal that brought down his government in 2018.
Najib, and the fugitive financier Jho Low and his family are among individuals named in the civil suit. Low, whom prosecutors have accused of orchestrating the fraud, has previously professed his innocence.
“We have not received the summons,” Najib’s lawyer Farhan Shafee said. “We also found out from the press.” M. Purvalen, a lawyer representing Jho Low’s mother, said he has not been approached to represent the Low family in this suit.
“The Government’s recovery efforts are now focused on pursuing other wrongdoers who have caused losses to 1MDB and or SRC during the execution of their duties, as parties directly or indirectly involved in 1MDB and or SRC’s various operations and transactions,” Finance Minister Tengku Zafrul Abdul Aziz said in a statement.
The specific allegations against Deutsche Bank and JPMorgan weren’t immediately clear. Deutsche Bank helped 1MDB raise more than $1 billion in 2014. JPMorgan in 2017 was reprimanded by Swiss regulators over its handling of money transfers related to 1MDB in previous years.
Deutsche Bank’s shares reversed gains and were down 1% at 1:22 p.m. in Frankfurt.