PETALING JAYA: A new filing has been made in a United States court relating to the civil suit by the US Department of Justice (DoJ) seeking to seize US$540 million (RM2.3 billion) in assets which include film rights to three movies, namely “Wolf of Wall Street”, “Dumb and Dumber To” and “Daddy’s Home”, purchased with funds allegedly embezzled from 1MDB.
However, this time, it is a joint petition between the DoJ and Red Granite Pictures, both of which are in negotiation over the seizure of the rights to the movies and other related matters, Hollywood Reporter reported.
The two parties are said to be asking the court to appoint an independent third party to keep an eye on things while “productive settlement discussions” are ongoing.
Red Granite was co-founded by Joey McFarland and Riza Aziz, who is the stepson of Prime Minister Najib Razak.
According to the Los Angeles-based publication, both parties asked the court to allow them to appoint an independent operational fiduciary to oversee the operations and management of Red Granite.
“This mutually agreed upon person would have the authority to inspect the company’s books, monitor transactions, open bank accounts and consult with Red Granite’s management team on preserving assets, among other duties,” the Hollywood Reporter said.
“It is not the intention of the United States in joining this application to prevent any third parties, including but not limited to financial institutions, motion picture studios or distributors, or trade vendors, from doing business with Red Granite, or to otherwise interfere with Red Granite’s ordinary business operations,” Red Granite lawyer Matthew Schwartz wrote in the joint stipulation filed on June 28.
The US government is also said to be in support of letting the “independent operational fiduciary facilitate and support Red Granite’s ongoing business operations”.
However, the filing hit a snag with US District Judge Dale Fischer not willing to sign off on the order the way it is currently worded.
“Along with the stipulations, the parties filed proposed orders for the Court’s signature.
“Those proposed orders merely state that ‘Pursuant to the stipulation and request of the parties, and good cause appearing therefore, the attached stipulation IS SO ORDERED.’ This makes no sense,” Fischer was quoted as saying in a brief, adding that the court does not “order” a stipulation.
“It is unclear what the parties want the Court to order or what the purported effect of that order would be.”
Last August, another US entertainment trade publication reported that the DoJ had filed a stipulation with Red Granite that sets up a procedure to segregate proceeds from “Wolf of Wall Street”.
As part of the stipulation, the government withdrew a proposed restraining order against the rights to “Wolf of Wall Street”.
However, the stipulation maintained existing collection account management agreements, thereby allowing proceeds from the films to continue to flow to actor Leonardo DiCaprio, director Martin Scorsese, Fox, the actors’ and directors’ guilds, and to Red Granite’ lenders.
“Any portion of the proceeds from the film that is due to Red Granite will be held in segregated accounts pending a ruling on the government’s asset forfeiture request. Prosecutors are ultimately seeking to return funds to the Malaysian people,” Variety had reported.
Last month’s DoJ suit also said Malaysian businessman Low Taek Jho (Jho Low) had purchased a 22-carat pink diamond necklace worth US$27.3 million for the “wife of Malaysian Official No 1” (MO1), using the same source of funds.
Last July’s civil forfeiture suit sought to recover all the assets including but not limited to the Park Lane hotel in New York, a luxury hotel in Beverly Hills, condominiums in New York, a private jet and expensive works of art.
With the latest court filings, the total value of the assets sought by the DoJ has now increased to US$1.8 billion (RM7.7 billion).
The DoJ charged that from 2009 through 2015, more than US$4.5 billion (RM19 billion) belonging to 1MDB had been diverted by high-level officials of the fund and their associates.