FBI says witnesses in U.S. probe into Malaysia's 1MDB fear for safety

[September 06, 2017]  KUALA LUMPUR (Reuters) - Potential witnesses to the multi-billion dollar scandal at 1Malaysia Development Berhad (1MDB) are afraid to speak with U.S. investigators as they fear for their safety, the Federal Bureau of Investigation says.

A total of $4.5 billion was misappropriated from 1MDB by high-level officials of the fund and their associates, according to dozens of civil lawsuits filed by the U.S Justice Department in the past two years.

1MDB is at the center of money-laundering probes in at least six countries, including the United States, Switzerland and Singapore. Malaysian Prime Minister Najib Razak set up 1MDB in 2009 and served as chairman of its advisory board until last year. He has denied any wrongdoing.

The Prime Minister's office and 1MDB did not immediately respond to a request for comment on the FBI claims.

In a federal court filing in Los Angeles, the FBI requested that the names of its informants in the case be kept secret, after many expressed concerns of retaliation if they were found to have been in contact with the U.S. government.

Individuals otherwise willing to provide information on the case have also told investigators that they were afraid that they would "place the safety and security of both themselves and their families at serious risk", according to a declaration in the filing by FBI agent special agent Robert Heuchling.

The agent said identifying witnesses could result in intimidation or threaten their safety, citing Malaysian news reports of local officials and politicians who have been arrested for purportedly disclosing information linked to 1MDB.

The agent cited Malaysian press reports from Aug 30 that said the driver of former Malaysian Attorney-General Abdul Gani Patail was shot in public as a possible warning against assisting the U.S government in the case.

Abdul Gani had led investigations on 1MDB until he was replaced in 2015.

Last month, the U.S. Justice Department asked for a stay on its civil lawsuits seeking to seize more than $1 billion in assets allegedly bought with stolen 1MDB funds because it was conducting a related criminal probe.

 A construction worker talks on the phone in front of a 1Malaysia Development Berhad (1MDB) billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia, February 3, 2016. REUTERS/Olivia Harris/File Photo

The lawsuits filed by the department allege that the funds were stolen in four phases.

The lawsuits say those involved included Malaysian financier Low Taek Jho, also known as Jho Low, Najib's stepson Riza Aziz, and Khadem al Qubaisi, the former managing director of Abu Dhabi's International Petroleum Investment Co.

The trusts holding the assets on behalf of Low, Aziz, al Qubaisi and their families have opposed the request to put the civil proceedings on hold.

The Low trusts have asked the United States to provide the identities of witnesses, sources of evidence, and thousands of documents that are relevant to the criminal investigation, the FBI said.

The Justice Department has sought to seize a total of about $1.7 billion in assets that it said were bought with misappropriated 1MDB funds.

The lawsuits also claim that $681 million in 1MDB funds found its way into the personal accounts of so-called Malaysian Official 1, who Malaysian and U.S. officials have identified as Najib. He was cleared of any wrongdoing in a Malaysian investigation.

Low did not immediately respond to a request for comment on the FBI filing and he has previously denied any wrongdoing in the 1MDB case, saying that the Justice Department's actions were "a further example of global overreach in pursuit of a deeply flawed case."

(Reporting by Rozanna Latiff; Editing by Praveen Menon and Neil Fullick)

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