Aabar-BVI Phase

Aabar-BVI Phase

In 2012, 1MDB raised US$3.5 billion in two separate bond offerings to acquire energy assets in Malaysia but a substantial portion of the proceeds - approximately US$1.367 billion - was misappropriated.

The bonds were guaranteed by International Petroleum Investments Company (IPIC), an investment entity owned by Abu Dhabi government.

In exchange, 1MDB agreed to provide IPIC’s subsidiary Aabar Investments PJS (Aabar) options to acquire a 49 percent interest in an energy asset involved.

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1MDB received the proceeds of each of the bond issue in 2012, but the proceeds were almost immediately transferred to an entity called Aabar Investments PJS Limited (Aabar-BVI), a British Virgin Islands-registered corporation.

Aabar-BVI bore a similar name to the IPIC’s Aabar, but there was no affiliation between IPIC and Aabar-BVI. 1MDB later conceded that 1MDB might been a "victim of fraud".

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At the time, Khadem Abdulla al-Qubaisi was the managing director of IPIC and the chairperson of Aabar. Mohamed Ahmed Badawy Al-Husseiny was the CEO of Aabar. However, both of them were also the director of Aabar-BVI.

"Khadem and Mohamed opened the account at BSI Bank in Lugano in the name of Aabar-BVI and used the account to facilitate the diversion of funds from 1MDB. Low was also integrally involved in setting up the Aabar-BVI Swiss Account and in arranging for the fraudulent transfer of $1.367 billion from 1MDB to the Aabar-BVI Swiss Account."
The DOJ

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A total of US$1.092 billion from Aabar-BVI was diverted through two overseas investments funds - Enterprise Emerging Market Funds (Enterprise) and Cistenique Investment Fund (Cistenique) - and transferred to Blackstone Asia Real Estate Partners (Blackstone) which is owned by Eric Tan (Jho Low).

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Two companies owned by Mohamed - Rayan Inc and MB Consulting LLC - received US$11.6 million and US$55 million from Blackstone respectively, while Vasco Investment owned by Khadem got US$472,750,000, which he later used to purchase the Walker Tower Penthouse, Laurel Beverly Hills Mansion and a Hillcrest property.

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MO1 also received US$30 million from Blackstone. The former 1MDB general counsel and executive director of group strategy Jasmine Loo got US$5 million which she used to purchase a residential unit at One Madison Park Condominium.

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Another US$238 million from Aabar-BVI was wired to Red Granite Capital, an entity founded by Riza Shahriz Abdul Aziz. As mentioned earlier, Riza is the stepson of Najib as described by the DOJ that Riza is a relative of MO1.

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Riza then channelled the money to film production company Red Granite Pictures to produce films such as "The Wolf of Wall Street", "Daddy’s Home" and "Dumb and Dumber To".

The production of "The Wolf of Wall Street" received over US$60 million in the Good Star phaseand Aabar-BVI phase. Red Granite Pictures reached a settlement with the US government to the tune of US$60 million, and Riza will only draw a limited salary to cover his health insurance until the full settlement amount is paid.

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A sum of US$94.3 million was sent from Red Granite Capital to Shearman IOLA to acquire several luxury properties. In particular, Riza spent US$17.5 million and US$33.5 million to buy a Hillcrest property and Park Laurel Condominium from Jho Low, who had purchased the properties in Good Star phase.

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Riza also spent US$4,289,760 from Red Granite Capital for movie posters.

"The walls of the Park Laurel Condominium, where Riza lived, are covered in movie posters that Riza acquired using funds from Aabar-BVI. Riza also gave away several posters as gifts, including to (Red Granite Picture co-founder Joey) McFarland, (Hollywood actor Leonardo) DiCaprio, and the director of 'The Wolf of Wall Street'."
The DOJ

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Meanwhile, Blackstone also wired a whopping US$321.3 million to Alsen Chance Holdings Limited, which was described as a company that did "consulting works for building and construction projects". US$1.2 million from Alsen Chance then used by Riza to purchase the “Metropolis” poster, a framed, three-sheet colour lithograph poster created by the German artist Heinz SchulzNeudamm for the 1927 silent film "Metropolis".

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Alsen Chance also wired US$11 million to the Venetian Resort-Hotel-Casino to settle Jho Low’s gambling debt. Aziz transferred at least US$41 million from Red Granite Capital to Alsen Chance for the same purpose.

"On or about July 15, 2012, Jho Low withdrew an aggregate cash amount of US$1,150,090 at the Venetian Casino: US$500,000 as a withdrawal of deposit, and US$650,090 as the redemption of casino chips and other gaming instruments."

"Several individuals gambled with Jho Low on this occasion, using his account. These individuals included Riza; McFarland; DiCaprio; and the 1MDB-SRC Officer, who was the former chief investment officer of 1MDB and was at the time the CEO of another Ministry of Finance vehicle called SRC International."

The DOJ

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Jho Low used the same modus operandi of creating the impression that he was using his family wealth to purchase a diamond ring and earrings worth US$2,842,475 for his mother, Evelyn Goh. Money from Alsen Chance was masked with pass through transactions through his father’s account before being wired to Jho Low.

Jho Low also used US$142.25 million from Alsen Chance to acquire interests in Electrum Group, a private equity firm in the United States, that worth US$150 million.

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Good Star received US$275.5 million from Alsen Chance, before wiring US$20.75 million to Khadem’s Vasco Investments.