EXCLUSIVE: Hollywood has been drawn into a federal investigation as the U.S. Department of Justice continues to probe possible wrongdoing by Malaysian Prime Minister Najib Razak. An extensive federal investigation in the U.S. is underway to determine whether the crime of money laundering applies to the transactions made by the Prime Minister and others, with the DOJ’s Asset Forfeiture and Money Laundering Section investigating the case.
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The questions being asked specifically concern the money flowing to and from Red Granite Pictures, its co-founder Riza Aziz, the Prime Minister’s stepson; and Low Taek Jho (also known as Jho Lo), who is a friend of Aziz and his family. Perhaps telling of the feds’ efforts, Low, who received a “special thanks” in the Wolf Of Wall Street credits, was cited in an investigation in Malaysia last year over political slush funds.
At this point, the Justice Department is in fact-gathering mode and interested in real estate transactions by both Low and Aziz as well as the financials of Red Granite. We’ve been told that a number of people have been questioned already.
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“There has never been anything inappropriate about any of Red Granite Pictures or Riza Aziz’s business activities,” said a spokesman for Red Granite Pictures and Aziz. “What they have done and will continue to do is develop and produce successful and acclaimed movies that have to date generated more than $800 million in worldwide box office revenues.”
Image (5) The-Wolf-of-Wall-Street-__131226072238-575x396.jpg for post 661543Since it launched three years ago with a big party at Cannes, Red Granite has backed several movies that have done well, most recently the Will Ferrell-Mark Wahlberg comedy Daddy’s Home, which was the companies’ first 50-0 co-financing deal with Paramount with a budget of around $50M. (Previous films Red Granite financed itself and presold those properties with distributors around the world). Daddy’s Home already has surpassed $212M worldwide to date. The Wolf of Wall Street, with a production budget of $100M, took in $392M worldwide and got five Oscar nominations including for Best Picture. The company currently is developing a number of feature projects, including one about George Washington called The General and another based on the top 2006 Blacklist script The Brigands of Rattleborg.
But in 2014, Red Granite found itself fending off accusations of shadowy finances from several directions. While engaged in a bare-knuckles legal battle with producers Steve Stabler and Brad Krevoy over another one of its movies, Dumb And Dumber To, Red Granite also was accused by blogger Clare Rewcastle Brown — the sister-in-law of former UK PM Gordon Brown — of financing movies partially through “illicit funds emanating from the Malaysian government.”
Like it did with Stabler and Krevoy’s allegations that included RICO Act violations and charges the company was “funded with monies that include proceeds from unlawful activities,” Red Granite shot back with cease and desist letters and counterclaims. In the end the company took no legal action against Brown and, after nearly a year, reached a confidential settlement with Stabler and Krevoy, just a month before a pivotal hearing in that case was scheduled.
Currently, Red Granite is continuing its July 2015 legal action pursuing alleged and unnamed hackers. As political scandal deepened in Malaysia over the hundreds of millions of dollars allegedly being used by the PM for his own benefit, the company claimed last summer that someone has been spamming their office with emails detailing financial impropriety, gaining access to their servers and internal files.
Red Granite has said before that it’s backed by money from Asia and the Middle East, and Aziz specifically told the New York Times in February 2014 that the biggest financier of Red Granite was a man named Mohamed Ahmed Badawy al-Husseiny. He is CEO at Aabar Investments, a company that has a strong relationship with Low. Al-Husseiny told the NYT that he and private investors were helping to finance Red Granite, and a spokesman said that none of the money was from Malaysia.
“As a matter of policy, the Justice Department neither confirms nor denies whether a matter is under investigation,” said Peter Carr, a spokesman for the DOJ in Washington, D.C.
However, Deadline has learned that this case is being handled at the DOJ, not unlike that of Teodoro Nguema Obiang Mangue, the son of the Equatorial Guinea president, who in 2014 had to surrender $30M in assets in the U.S. after it was found that the money was stolen from the African nation. The DOJ looked over seven years of purchases by Obiang. This case dwarfs that one in terms of the amount of money at issue.
After disclosures last year that nearly $700 million had mysteriously ended up in Malaysian Prime Minister Razak’s personal bank accounts, investigations were launched in several countries. The money allegedly was used to fund what the Wall Street Journal in late December called “a massive patronage machine” for his party, the United Malays National Organization. Wells Fargo reportedly routed more than $680 million of the cash that ended up in Najib’s personal account. Money flowing through other banks — including one in particular in Los Angeles, Deadline has learned — also is said to be part of the federal probe.
The PM’s political opponents have called on Razak to resign. He says he has done nothing wrong: The cash was a private donation from an unnamed country in the Middle East. Malaysia’s own Attorney General cleared him of wrongdoing — gotta consider the source as it is a borderline one-party state — saying that the $681M was “a donation” from Saudi Arabia’s then-King Abdullah. But last week, the PM’s story of where the money came from changed again, and now he says it’s from a Saudi businessman, according to international reports. Two weeks ago, the Swiss made bold accusations of wrongdoing, based the country’s own investigation. Since then, the AG in Malaysia told Malaysian authorities to drop their own case, but that is being appealed by the Malaysian Anti-Corruption Commission, according to reports there.
The money that ended up with Najib flowed through a fund that Low had a hand in, according to international reports. It’s been called 1 Malaysia Development Berhad (1MDB) since 2009, when the PM turned it into a state run entity, ostensibly to help turn the country into a financial center. That’s where Swiss law enforcement comes in: Officials said on January 29 (after the Malasian Attorney General statement clearing the PM) that $4B had been stolen from 1MDB. Remember the aforementioned Aabar Investments? It is in a joint venture with 1MDB. And Low’s private banker Yak Yew Chee just emerged last week in Singapore’s own money-laundering investigation. Chee also is the banker for 1MDB Global Investment Ltd and Aabar Investment PJS Limited.
With all these overlapping relationships, the Justice Department wants to know whether funds from Najib or 1MDB here in the states were used to help Aziz or Low to buy U.S. real estate and expensive artwork, or if that money flowed to or through Red Granite Pictures or another one of his companies.
There are several entities registered with the California Secretary of State’s office, which went through Debra Johnson via NKSFB on Wilshire Boulevard: Red Granite Pictures, Red Granite Partners, Inc., Red Granite International, Inc., Red Granite Capital US, Red Granite Entertainment Holdings, Red Granite Investment Holdings, Red Granite Music, Red Granite Real Estate Holdings. There was another company, Red Granite Silicon Investment Holdings, that was not registered through Johnson. A spokesman for Aziz would not confirm whether any of these companies registered were for Aziz or part of Red Granite.
Other companies that are said to be registered in California with possible ties to Aziz and Red Granite include Rg Productions, 912 N. Hillcrest Road, Twows, Ootf, and Metropolis IX Capital Advisors (where Johnson serves as COO). Again, a spokesman for Red Granite and Aziz would not confirm whether these companies had a link to Aziz or Red Granite, even though Twows is likely the LLC for The Wolf Of Wall Streetand Ootf for the film Out of the Furnace.
Deadline put a call into Red Granite and asked for Johnson. The company knew who she was and gave us an outside number for her. A call to her went unreturned. It was confirmed, however, that Aziz is one of her clients through Metropolis IX Capital.
The New York Times recently found that shell companies tied to Aziz and Low spent about $150 million on real estate properties. Officials are looking at activities of Aziz and Low, who’s a central figure in the Malaysian investigation and a major investor in EMI Music Publishing and New York’s Park Lane Hotel.
Low was linked to a $30.6 million penthouse at the Time Warner Center in New York, a $39 million mansion in the Hollywood Hills, Beverly Hills’ L’Ermitage Hotel and part of the Park Lane Hotel. Aziz was tied to a $33.5 million condo on 63rd Street in NYC and several properties in Los Angeles including a Beverly Hills residence with a garden that includes a gold pyramid.
U.S. officials could seize assets if they find that the properties or any assets were bought with cash tied to corrupt practices, just as it did to Teodoro Nguema Obiang Mangue in 2012. Deadline has learned that some of the same members of the DOJ team on the 2012 case are also working on this investigation.