It's no secret that New York City commercial real estate attracts investors from all over the world. Now, a number of real estate acquisitions by a Malaysian businessman and a film producer, both with ties to that country's prime minister, have been linked to a huge money laundering scheme, according to the U.S. Department of Justice.
These men, along with an Emirati businessman, are connected to a company called 1Malaysia Development Berhad. The DOJ calls the company a "strategic investment and development company wholly-owned by the government of Malaysia."
According to the lawsuit, some $3.5 billion that was supposed to go to the Malaysian people was instead given to family, friends and associates who "laundered" the funds by purchasing property in NYC. That property, which the DOJ is moving to have seized, includes multi-million-dollar penthouses in the Time Warner Center and Walker Tower. It also includes an investment in the Park Lane Hotel. The DOJ is working to seize the interest in that hotel that it says involves laundered funds.
The diverted investments, according to the DOJ, go beyond NYC real estate to works of art by Monet and Van Gogh and the Oscar-nominated 2013 film "The Wolf of Wall Street," which starred Leonardo DiCaprio The DOJ is seeking the distribution proceeds as well as the rights and royalties to the film, which it says was made using funds diverted from 1MDB.
Commercial real estate transactions in this city and be complex and involve a number of investors. You don't always know the people with whom you're doing business or what their other activities are. It's essential to protect yourself and your own company should legal action result from the alleged activities of those with whom you've done business.
Source: Curbed New York, "Pricey NYC Condos Seized In Connection With Money Laundering Investigation," Zoe Rosenberg, July 22, 2016