Red Granite Productions Seized by FBI ('The Wolf of Wall Street' Corruption Scandal)

UPDATE: The Justice Department just filed a 136-page civil complaint charging The Wolf Of Wall Street producer Red Granite Pictures with engaging in “an international conspiracy to launder money” tied to an investment and development company owned by the government of Malaysia.

Although the company, 1MDB, was supposed to engage in economic development, between 2009 and 2013 it diveted funds “for the personal benefit of the co-conspirators and their relatives and associates, including to purchase luxury real estate in the United States, pay gambling expenses at Las Vegas casinos, acquire more than $200 million in artwork, invest in a major New York real estate development project, and fund the production of major Hollywood films,” the Justice Department says. “1MDB maintained no interest in these assets and saw no returns on these investments.”

Attorney General Loretta E. Lynch and other law enforcement officials have scheduled a press conference in Washington D.C. at 11:30 am, where they will formally announce the filing of civil forfeiture complaints seeking the forfeiture and recovery of more than $1 billion in assets associated with an international conspiracy to launder funds misappropriated from a Malaysian sovereign wealth fund.

The complaint at the U.S. District Court in Los Angeles focuses on Low Taek Jho — more popularly known as Jho Low — a jet-setting Malaysian national who allegedly “laundered more than $400 million of the funds misappropriated from 1MDB” through the U.S. He was closely linked to Red Granite Pictures co-founder Riza Aziz.

The filing is filled with accounts of extravagant spending, including a $1.15 million evening of gambling Low funded at the Venetian Casino in 2012 involving Aziz, Red Granite co-founder Christopher McFarland plus “a lead actor in The Wolf of Wall Street” and a former Chief Investment Officer of 1MDB.

The actor appears to be Leonardo DiCaprio: He isn’t mentioned by name, but the filing says the actor won a Golden Globe for Wolf Of Wall Street and, in his acceptance speech, thanked Aziz and Low as “collaborators” — which DiCaprio did.

In addition to charging misuse of funds to pay for the movie, officials say that Low siphoned cash to buy interests in real estate — including New York’s Park Lane Hotel, a penthouse in the Time Warner Building, and a mansion in Beverly Hills. He’s said to have funneled nearly $107 million to buy a major interest in EMI Music Publishing Group.
He also bought a Bombardier Jet, and art work including Vincent Van Gogh’s pen and ink drawing La maison de Vincent a Arles, and Claude Monet’s oil painting Saint-Georges Majeur.

Deadline broke the story in February, that federal authorities were bearing down on what they are now calling a Kleptocracy Asset Recovery Initiative. It is relevant to Hollywood because of the direct tie to Red Granite, the financier/producer behind The Wolf of Wall Street.

Leading the press conference will be Lynch, Assistant Attorney General Leslie R. Caldwell of the Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Deputy Director Andrew McCabe of the FBI, and Chief Richard Weber of IRS-Criminal Investigation.

EARLIER, 9:56pm, July 20: The feds are about to move on Red Granite, the production company behind The Wolf of Wall Street whose co-founder Riza Aziz is the stepson of Malaysia’s embattled Prime Minister. The Wall Street Journal reported tonight that U.S. prosecutors are ready to file civil lawsuits as early as Wednesday and launch one of the largest asset seizures in American history — it could exceed $850M.

The Justice Department (as well as law enforcement in other countries around the world) have, for months, been probing possible wrongdoing by Malaysian Prime Minister Najib Razak, his controversial 1MDB fund and a man named Low Taek Jho (also known as Jho Lo) who is a friend of Aziz’s. The federal investigation has been focused on whether the crime of money laundering applies to the transactions involving 1MDB, Low and production company Red Granite. The investigation is being handled by the DOJ’s Asset Forfeiture and Money Laundering Section.

Deadline first reported the investigation into Red Granite in February and then in April, Red Granite said it was cooperating with the feds.

At issue is whether $155M moved through offshore companies and then used to fund expenditures and buy assets in the states. 1MDB was set up by Prime Minister Razak and Low, who received a special thanks at the end of The Wolf of Wall Street. Perhaps telling of the feds’ efforts, Low was cited repeatedly in an investigation in Malaysia last year over political slush funds and he is said to be involved in several companies that may have received funds from 1MDB.

Just yesterday, another company surfaced — Good Star Ltd. — which received over $1B from 1MDB and was long thought to have been owned by PetroSaudi International but was found, instead, to be solely owned by Low.

The U.S. DOJ could seize real estate and other assets from Low, Aziz and Red Granite or any other company owned/registered by/to them. Deadline investigated earlier this year and found 14 entities registered to Red Granite and had possible ties to Aziz. The feds were interested in their financial transactions. Red Granite, however, has consistently maintained, through a spokesman, that it has been involved in no wrongdoing.

The New York Times last year reported that it had found shell companies tied to Aziz and Low that spent about $150 million on real estate properties. Low is also a major investor in EMI Music Publishing and New York’s Park Lane Hotel. He was also tied to a $30.6M penthouse 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.

There is also said to be expensive artwork that was bought either by Red Granite, Aziz and/or Low that could be on a forfeiture list. Red Granite has backed several movies, including the Will Ferrell-Mark Wahlberg comedy Daddy’s Home, which was the companies’ first 50-50 co-financing deal with Paramount with a budget of around $50M.

This case, although much larger in scope, is not unlike the 2014 case of Teodoro Nguema Obiang Mangue, the son of the Equatorial Guinea president, who saw $30M in assets seized in the U.S. after it was found that the money was stolen from the African nation. Stay tuned.

Tyger wrote:Daaamn

Since the Department of Justice filed the biggest forfeiture complaint in U.S. history on Wednesday, much of the film industry and beyond has come to understand how Leonardo DiCaprio and his hit 2013 biographical comedy The Wolf of Wall Street have become engulfed in a major embezzlement scandal alleged to involve billions of dollars.
But few might appreciate that the whole story started almost two decades earlier, back when a baby-faced DiCaprio was still basking in the post-Titanic "Leo-Mania" limelight and two Malaysian teenagers were sent to boarding school in the U.K.

Here's THR's look at the chronology of corruption.

1998
A 17-year-old Jho Taek Low (now 35), otherwise known as Jho Low and the third child of Malaysian businessman Larry Low, is sent to the private school of Harrow in the U.K. to study for his A-levels (the U.K. equivalent of the SAT). It is here where he meets Riza Aziz, the stepson of rising Malaysian politician Najib Razak. Aziz, according to Low, was studying at “a nearby school.”

2000
Low leaves Harrow and heads to the venerable Wharton Business School at the University of Pennsylvania, from which he would graduate in 2005 with a BSc Economics, majoring in finance.

2008
After graduating from the London School of Economics in 2000, Aziz is reported to have worked at KMPG and then at HSBC’s London base from 2005 as a low-level banker. But the financial crash of 2007-2008 sees him leave the company.

April 3, 2009
Having become deputy prime minister in 2004, Razak is sworn in as Malaysian prime minister following the resignation of Abdullah Badawi, who had seen his government lose its two-thirds majority in the 2008 general election.

April 8, 2009
Low is appointed official advisor to the Terengganu Investment Authority (TIA), a sovereign wealth fund established to manage the oil revenue from the Malaysian state of Terengganu. The Justice Department alleges that he had actually been involved in establishing the fund earlier in the year, with the assistance of Goldman Sachs.

July 2009
Prime minister Razak transforms the TIA into a federal entity, in September changing its name to 1MDB, the 1Malaysia Development Berhad. Its mission is to create “sustainable economic development by forging strategic global partnerships and promoting foreign direct investment.”

August 2009
Low reportedly hires Microsoft co-founder Paul Allen’s super-yacht, Tatoosh, and invites Razak, his wife (and Aziz’s mother) Rosmah Mansor and Prince Turki and Tarek Obaid, two Saudi royals who had set up U.K.-based business PetroSaudi International (PSI), for a meeting in St. Tropez. The French Riviera would become a regular backdrop for the scandal.
 
September 2009
1MDB and PSI form a joint venture whose stated purpose was to look at energy rights in Turkmenistan and Argentina. 1MDB pours $1 billion of public Malaysian money into the venture, however $700 million is immediately siphoned off as a “loan repayment” into an account held by shell company called Good Star Ltd., based in the Seychelles and controlled by Low. At the time, Low has no official position with 1MDB or PSI.

The same month and now flush with money, Low hits the U.S. club scene. The New York Post describes him as an “international man of mystery” after he racks up a $160,000 bar bill at nightspot Avenue during September’s New York Fashion Week. In October, he reportedly turns up at Lindsay Lohan’s 23rd birthday, sending 23 bottles of Cristal champagne to the actress at the 1OAK club in Las Vegas, a city where a month later he’d throw himself a lavish birthday bash. He’d top this with a notorious party in Vegas in 2012, a secretive event that featured a firework-strewn performance by Britney Spears, dwarf oompa loompas and celebrity guests including Kanye West, Jamie Foxx, Paris Hilton and Leonardo DiCaprio. By 2012, however, DiCaprio was already a regular fixture at Low’s side.

Early 2010
Low starts enhancing his property portfolio with luxury real estate in New York and California. Among his first purchases are a $24 million apartment in the Park Laurel condominiums in Manhattan and a $17.5 million mansion in Beverly Hills. Both were bought via shell companies and later sold to Aziz, according to the Justice Department.

February 2010
Low sets up his personal Jynwell Capital investment fund in Hong Kong with his older brother Szen Low. The fund was later used to control various assets in the U.S., including the luxury L'Ermitage hotel in Beverly Hills, bought for $44.8 million, according to the Justice Department. Low would later claim Jynwell was set up as an advisory company for his family's legacy assets.

July 2010
DiCaprio and Hilton are among a group Low flies to South Africa to watch the soccer World Cup. Also invited is Joey McFarland, Hilton’s celebrity booker and party planner. Later that month, Hilton is spotted in St. Tropez with Szen Low, where the Malaysian sibling reportedly took part in a $2.2 million champagne-ordering competition at Les Caves du Roy nightclub.

September 2010
Aziz establishes Red Granite Pictures in Los Angeles, with McFarland installed as partner and vice chairman. It would eventually set up office in the same Sunset Boulevard building as DiCaprio's Appian Way.

May 2011
1MDB sends another $330 million to its joint venture with PSI, money which — according to banned Malaysian publication The Edge — was wired directly to Low’s shell company Good Star.

May 9, 2011
Red Granite poaches a trio of industry veterans from Avi Lerner's Millennium/Nu Image banner; Danny Dimbort and Christian Mercuri to head up international sales and Joe Gatta to become head of production, overseeing the film slate.

May 11, 2011
The Wolf of Wall Street is announced. Just eight months after being established, Red Granite throws a spectacular launch party at the Cannes film festival, where it would launch the long-gestating $100 million film. Low, Aziz and DiCaprio would attend the million-dollar bash, at which Kanye West and Jamie Foxx sang "Gold Digger" on stage.
The film is acquired from Warner Bros. Despite winning the rights to develop Jordan Belfort's memoir with DiCaprio's Appian Way in 2007, it had stalled at the studio due to the R-rated content. THR understands that several parties were interested in picking up the project, but it was DiCaprio who ensured his friends at Red Granite came away with the contract.
 
July 2011
Low makes his splashiest property purchase yet, paying $31 million to a tech entrepreneur for the 4,825-square-foot Time Warner Center penthouse in New York overlooking Central Park, previously occupied by Jay-Z and Beyonce. At over $6,400 per square foot, the deal is the highest ever at the luxury condominium tower.

May 2012
Goldman Sachs, which had been looking to expand into Asia’s emerging markets, issues the first round of bonds for 1MDB. $3.5 billion is raised via two bonds of $1.75 billion issued in May and September, with the money set to go towards purchasing power plants. The bonds were guaranteed by Abu Dhabi’s sovereign petro wealth fund IPIC, run by Khadem al-Qubaisi, whom Low is reported to have met on the U.S. club scene in Vegas in 2010.

In exchange for this guarantee, 1MDB says it paid IPIC approximately $1.37 billion, more than 40 percent of the net proceeds raised. However, IPIC later said it never received this money. Instead, it is transferred to a British Virgin Islands-registered corporation called Aabar Investments PSJ, which bares a similar name to Aabar, a subsidiary of IPIC (and also run by Al-Qubaisi). The new Aabar Investments PSJ had Al-Qubaisi and his CEO at the Abu Dhabi-based Aabar, Mohamed Al-Husseiny (more on him later), as directors.
Both IPIC and Aabar later asserted that Aabar Investments PSJ was not owned by either entity.

For its work in arranging the bond offering and underwriting the notes, Goldman Sachs was to be paid a total of $192.5 million, roughly 11 percent of the principal amount, which is considered an unusually high commission. It would issue more bonds for 1MDB later.

June 2012
Money starts flowing out of the fake Aabar account. Among the various transfers made are more than $472 million the DoJ alleges went to accounts controlled by Al-Qubaisi, $66 million to accounts of Al-Husseiny and $238 million sent in three bunches between June and November 2012 to a Singapore bank account belonging to Red Granite Capital, owned by Aziz. $94.3 million of this money is alleged to have been used to fund luxury real estate, including Low's previously-mentioned properties in Beverly Hills and New York and a luxury London mansion near Buckingham Palace, which was bought through a shell company for $33 million. A further $64 million of the money received by Red Granite Capital went to set up Red Granite Pictures and was directed into the film production company's account at City National Bank.

August 2012
Production on The Wolf of Wall Street kicks off in New York.

November 2012
As a 38th birthday present, Low and Red Granite spend a reported $600,000 to buy DiCaprio the best actor Oscar statuette won by Marlon Brando in 1953 for On the Waterfront. More is splashed at a party thrown for the actor, where Red Granite execs reportedly rack up a bill of over $1 million on a competition to see who could order the most champagne. Speaking to THR, a source described the night as "pure debauchery." 

June 2013
Red Granite picks up the production rights to another long-gestating project, Dumb and Dumber sequel Dumb and Dumber To, which it will finance.

July 15 2013
Red Granite files a lawsuit against Dumb and Dumber producers Brad Krevoy and Steve Sabler, seeking to exclude them from involvement as producers on the sequel. The two assert that their contract from the original production says they are to be involved in any remake or sequel.
 
July 22, 2013
Krevoy and Sabler file counterclaims against Red Granite, asserting that “no one in Hollywood will trust” McFarland and Aziz in the future and that their experience in the cinema industry consisted of “cavorting at nightclubs with Paris Hilton.”

November 2013
Low and McFarland attend DiCaprio's 39th star-studded birthday party at the Tao Downtown and are reported to be among those buying large quantities of champagne. The proceeds from the mark-up on the champagne are donated to the Leonardo DiCaprio Foundation, which raises $3 million from the event.

December 17, 2013
DiCaprio, Low, Aziz and McFarland attend The Wolf of Wall Street world premiere in New York. The film is released wide on December 27, earning $18.4 million on its opening weekend and reaching the fifth spot. Although it would bring in only $117 million domestically, its dazzling international haul of $275 million would push it to $392 million, making the film Scorsese’s top grossing title of all time by February 2014.

January 12, 2014
At the Golden Globes ceremony, DiCaprio wins for best performance in a musical or comedy. On stage, he thanks Low, Aziz and McFarland for “being not only collaborators, but taking a risk on this movie.”

January 16, 2014
The Wolf of Wall Street is nominated for five Academy Awards, including best picture, best actor and best director, yet fails to win a single one at the March 2 ceremony.

April 2014
Krevoy and Sabler amend their original lawsuit against Red Granite regarding the Dumb and Dumber sequel to claim that the company had committed racketeering. "Red Granite is funded with monies that include proceeds from offenses against a foreign nation that involve bribery of public officials, or misappropriation, theft, or embezzlement of public funds by a public official," it asserted, the first time Red Granite was linked openly with corruption in Hollywood.

June 2014
Low takes delivery of his biggest purchase to date, the 300-foot super-yacht Equanimity. Reported to have cost $125 million, the boat comes complete with a spa, gym, sauna, Turkish bath and pool, plus nine staterooms that can accommodate up to 26 guests. 

July 2014
Red Granite requests that racketeering allegations be dismissed from Krevoy and Sabler's lawsuit, and the case is settled, with both sides reaching a confidential agreement.

August 2014
In an interview with the New York Times that came amid growing questions about Red Granite's financing, Aziz asserted that its principal investor was Al-Husseiny, the CEO of Aabar (and director of Aabar Investments PJS), and that the company's previous silence regarding the matter was because Al-Husseiny didn't want to be solicited by other producers. "I have known Riza for many years and have done business with Red Granite Pictures since its inception,” Al-Husseiny said in a statement.

November 2014
Universal releases Dumb and Dumber To in the U.S. Despite poor reviews, the comedy sequel would gross over $169.1 million globally.

April 2015
Al-Qubaisi and Al-Husseiny are fired from their positions at IPIC and Aabar in Abu Dhabi. Two months later Aabar Investments PJS, the look-alike company based in the British Virgin Islands used to transfer money into accounts held by Aziz, Low and Al-Qubaisi, is liquidated.

July 2015
With rumors circulating, Low is reported to have taken refuge in Taiwan, which has no extradition treaty with Malaysia or the U.S.

October 2015
Red Granite announces it is to develop a remake of the 1973 Steve McQueen classic Papillon.

February 2016
Tim Leissner, Goldman Sachs' Southeast Asia chairman who became one of the company's star bankers thanks to his work with the 1MDB investment fund, helping orchestrate the billion-dollar bond issues, steps down, relocating to Los Angeles with his wife, reality TV star and Russell Simmons' ex Kimora Lee Simmons. Days after leaving Goldman Sachs, Leissner is reportedly issued a subpoena by prosecutors at the Department of Justice looking into the possible embezzlement of 1MDB funds.

May 2016
It is revealed that the FBI is investigating the properties in Beverly Hills and New York owned by Riza Aziz. Meanwhile, from a yacht at the Cannes Film Festival, Red Granite execs meet buyers to sell Papillon, now with Charlie Hunnam attached to star, and to discuss another major project in the pipeline, George Washington film The General.

July 20, 2016
The Department of Justice files the largest forfeiture complaint in U.S. history, citing $1 billion of assets owned by Low, Aziz and Al-Qubaisi, and the future profits of The Wolf of Wall Street. DiCaprio is referenced in the filings as "Hollywood Actor 1."

A follow-up statement from Red Granite asserts that, to its knowledge, "none of the funding it received four years ago was in any way illegitimate and there is nothing in today’s civil lawsuit claiming that Red Granite knew otherwise." It added that the company was cooperating with all inquiries and is "confident that when the facts come out, it will be clear that Riza Aziz and Red Granite did nothing wrong."