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US Prosecutors to Renew Battle to Seize Huge 1MDB Yacht
US prosecutors, thwarted in their months-long campaign to seize the enormous motor yacht Equanimity from financier Low Taek Jho – one of the masterminds of the massive 1Malaysia Development Bhd scandal – plan to return to court in Los Angeles on April 30 to start over after being defeated, at least temporarily, in one of Indonesia’s most notorious courts.
Jho Low, as the Malaysian-born defendant is known, has led officials on a merry chase, with the crew turning off the vessel’s automatic identification system (AIS) in an attempt to hide its location, according to the complaint, which was made available to Asia Sentinel. The yacht has been seen in a long list of locations outside the long reach of the US government including Cambodia, Thailand, Taiwan and a string of tiny Indonesian islands. A fugitive from a criminal indictment in the US, the pudgy Jho Low has made himself scarce although what he will do now that his main mode of transportation is under threat is unsure.
The Equanimity docked in Benoa Bay, near Bali, earlier this year, however, and someone spotted it. US officials alerted Indonesian police, who seized the US$250 million vessel on Feb. 28 and impounded it. Built in 2014 by the Dutch firm Oceano, it includes a helicopter landing pad, its own pool, beauty salon, a Turkish bath, a gym, a movie theater and a sauna. The ship is 91 meters long and carries a crew of 33. Its staterooms sleep 26 people.
Lawyers for the owners, a Cayman Islands-registered holding company called Equanimity (Cayman) Ltd, argued in the South Jakarta District Court that both the Department of Justice and Indonesian police had acted illegally in seizing the yacht. After the verdict in the Jakarta court, they released this statement: "The owners of Equanimity welcome the Indonesian court's ruling, which upholds the rule of law and confirms that the FBI-instigated seizure of the vessel was improper and unlawful. The incident is yet another example of the unjustified global overreach by the US Government, which has gone to extreme and improper lengths to seize assets around the world while steadfastly avoiding having to prove that there are any merits to its case.”
The US government contends the ship is part of a vast treasure trove of assets including real estate in New York and California – a US$35 million executive jet, paintings by Vincent Van Gogh and Claude Monet, a vast outlay of personal jewelry adorning Rosmah Mansor, the wife of Prime Minister Najib Razak, who is known as “Malaysian Official 1” in US Justice Department documents. Also seized were profits from the Hollywood production company Red Granite Productions, which made the movies Wolf of Wall Street and Dumb and Dumber To. In all the US government is said to be after US$1.7 billion of assets connected to the family.
The case has been called the biggest kleptocracy action ever brought by the US government against a foreign official. Jho Low, as the putative owner of Equanimity is known, was the brains behind the establishment of 1MDB in 2008, working with Najib to establish it with the backing of Malaysia’s Finance Ministry. Not long afterward, Jho Low showed up in New York, buying jeroboams of Cristal champagne for a bevy of blondes. Through his own Jynwel Capital, he and his family own part of EMI Music Publishing, Myla Lingerie and the Park Lane Hotel in New York.
The looting started not long afterward, with at one point – according to US officials – US$681 million disappearing from 1MDB into Malaysian Official 1’s personal account at Ambank in Kuala Lumpur in 2013. Najib claimed the money had come from the Saudi royal family as a reward for the country’s tough stance against Islamic terrorism.
After the seizures began, Equanimity made for the high seas to evade the feds, according to the Justice Department’s motion for a protective order in the Central District Court in Los Angeles. The current operators, acting on Jho Low’s behalf, “have gone to extraordinary lengths to keep the Equanimity outside the hands of the government and outside the territory of the United States.”
The crew “have structured the Equanimity’s travels to avoid any jurisdictions where the Equanimity was likely to be seized. When they miscalculated in Indonesia and saw the yacht seized, they filed suit to resist the seizure and prevent Indonesia from surrendering the yacht to the government. And even when they have engaged with the government about a possible interlocutory sale of the yacht, they insisted that the yacht not be brought into the United States.”
The forfeiture suit seeks to forfeit the yacht to the United States – “something that may prove impossible if the yacht is kept outside the United States.”
In the hearing last week in Jakarta, the defendants said they had filed documents in the courts of both countries to demonstrate that the US is acting illegally to seize the yacht. They argued that while they were willing to sell the yacht to provide funds to meet the seizure, the US seizure and sale would drastically affect the value and “expose the crew to danger at sea.”
“This is completely unnecessary, because the claimants have always been, and remain, ready and willing to have the vessel sold while the DOJ's case is pending, provided that the sale is conducted under readily-achievable market conditions that will reflect the vessel's true market value and generate a fair price.”
In its motion to be filed on April 30, the Justice Department’s lawyers expect to ask that the court appoint the government as custodian of the M/Y Equanimity and order the claimants to tender it into US custody so that it can be brought to the United States and made available for forfeiture, which is expected to be an auction in which it would be sold for well below the quarter-billion dollar purchase price.
First, the US officials must get through the Indonesian court system, which saw 18 judges hit with disciplinary actions following arrests in just four months in 2017 by the Corruption Eradication Commission, an independent, demonstrably incorruptible agency. In all, 40 officials were punished by Indonesia’s Supreme Court for allegation of involvement in graft cases.
In a country where Malaysia’s Premier Najib has many friends – as does Jho Low -- the South Jakarta District Court, which is handling the case, is considered arguably the most corrupt in a court system considered one of the world’s worst.
Last August, for instance, investigators for the Corruption Eradication Commission arrested the court’s registrar and two lawyers on bribery allegations. In 2013, the court freed a PT Chevron Pacific Indonesia official, citing lack of evidence of any criminal activity in a bribery case.
In 2015, in one of the most egregious cases, the court ordered the imprisonment of Canadian teacher Neil Bantleman and Ferdinant Tjiong, a teaching assistant, where found guilty of raping three children in a case regarded as rigged to help a plaintiff win a US$125 million lawsuit against the Jakarta Intercultural School. The school’s main campus, opened 60 years ago as the Jakarta International School, now stands on some of Jakarta’s most valuable real estate. The two remain in prison in a case in which the evidence was demonstrably tainted.
The US Justice Department officials, however, believe it is a matter of cleaning up a procedural matter, and that once that is finished, they will sail away with Equanimity.