Diamonds bought with stolen 1MDB money to be handed to U.S.

KUALA LUMPUR, Malaysia – Diamond jewelry worth $1.7 million, allegedly bought by a Malaysian financier for his mother with money stolen from scandal-hit fund 1MDB, will be handed over to the US government, a report said Thursday, May 2.

Billions of dollars were allegedly pilfered from the Malaysian sovereign wealth fund by toppled leader Najib Razak and his cronies, who spent it on everything from high-end real estate to artworks.

Financier Jho Low allegedly played a central role in the fraud and has been charged in Malaysia and the United States, which is seeking to recover assets purportedly bought with looted funds via civil lawsuits.

Among these assets were a pair of diamond earrings and a diamond ring which Low allegedly bought for his mother, Goh Gaik Ewe, using some $1.7 million taken from 1MDB. Low commissioned a top American jeweler to make the pieces.

US prosecutors said in a court filing this week that the set’s custodian had reached an agreement to hand over the jewelry, Bloomberg News reported, citing documents filed in a California court.

The transfer should not be construed as an admission of wrongdoing or liability, it said. The filing did not say who the custodian was. Low’s mother is reported to be living in Thailand.

A spokesman for Low said he was “pleased to learn that the United States Department of Justice and all the relevant parties are working to amicably resolve these matters.”

The current whereabouts of Low, who gained a reputation as a jet-setting playboy, are unknown.

The 1MDB scandal played a huge part in the election loss last year of Najib’s coalition, which had governed Malaysia since independence from Britain in 1957.

Najib has since been arrested over the fraud and went on trial last month. – Rappler.com