Leverets plays a role in helping recover funds from “the heist of the century”
Leverets has successfully represented the liquidators of Alsen Chance Holdings Limited, a subsidiary of 1Malaysia Development Berhad (1MDB), to achieve recognition of its BVI liquidation in England and Wales. As a result, we’re playing a small but significant role in an ongoing international endeavour to recover funds fraudulently diverted away from 1MDB, in what has been described as “the largest kleptocracy case in history”.
Before diving deeper into our role, here’s some background into this complex web financial scandal, and the litigation to date…
1MDB – the world’s biggest financial scandal
When retired Swiss banker Xavier Justo blew the whistle on the fraudulent dealings of his former employee PetroSaudi in 2015, little did he know he had activated a chain of events that would expose the “heist of the century”.
The 1MDB scandal is one of the largest financial frauds in history, involving the embezzlement of at least $3.5 billion from the Malaysia economic development fund 1MDB. Originally set up in 2009 to promote economic development through strategic investment, 1MDB in fact became a front for financial corruption on an international scale
High-ranking government officials and financiers, including former Malaysian Prime Minister Najib Razak and fugitive financier Jho Low, diverted hundreds of millions of dollars through complex transactions, offshore bank accounts and shell companies in tax havens. Global financial institutions were used as conduits to launder the money:
- $1 billion was defrauded under the pretence of investing in a joint venture between 1MDB and PetroSaudi
- $1.4 billion was raised by Goldman Sachs in a bond issue, which was misappropriated and fraudulently diverted to a Swiss offshore account
- £1.3 billion also raised by Goldman Sachs on the market, was subsequently diverted to an account in Singapore
These funds were used to enable a lavish spending spree including the purchase of luxury assets, the funding of high-profile Hollywood productions, and even to exert influence over political agendas. The scandal triggered a wave of international investigations, exposing weaknesses in global anti-money laundering frameworks, and led to significant legal actions. Charges and asset seizures across multiple jurisdictions included:
- A case against Goldman Sachs for violating US banking laws
- The imprisonment of Najib Razak for an offence linked to 1MDB
- Prison sentences for two PetroSaudi executives from the Swiss Federal Criminal Court
- A ten-year jail term for a Goldman Sachs banker
Jho Low continues to evade justice as a fugitive in China. However, on 30th October 2024, a Malaysian Court ruled that Najib Razak must defend himself in court against 21 charges of money laundering. If found guilty he could receive an additional 20-year prison sentence, along with a fine of up to 5 times the value of funds involved in the defence.
The US Department of Justice has so far recovered $1.4 billion of assets. This will be returned to the people of Malaysia, thereby going some way to repairing the harm done by this incredible case of “thievocracy” – defined as corrupt government leaders using political power to expropriate the wealth of the people and land they govern, by means of embezzlement or misappropriation.
Successfully representing the liquidators of 1MDB subsidiary Alsen Chance Holdings Limited
On 4th November 2024, Leverets successfully applied to the High Court Chancery Division on behalf of the liquidators of Alsen Chance Holdings Limited (in liquidation) to achieve recognition of the foreign insolvency proceedings under the Cross-Border Insolvency Regulations 2006.
Working in partnership with Baker & Partners and barristers Christopher Howitt and Adam Chichester-Clark from Three Stone Buildings, we represented the liquidators in seeking recognition of Alsen Chance Holdings’ liquidation in England and Wales. As a result of our successful representation, the liquidators can proceed to pursue assets with the aim of recovering more of the funds fraudulently diverted away from 1MDB.
Our involvement serves as an example of our boutique firm’s international reach and role in high-value, complex litigation.
