BSI FUORI ROTTA Documenti supplementari

BSI FUORI ROTTA Documenti supplementari

1. Dati su BSI (2005-2016) 2. Accordo di non perseguimento penale / Non Prosecution Agreement DoJ – BSI (30.03.2015) 3. Constatazione dei fatti / Statement of Facts DoJ – BSI (30.03.2015) 4. Comunicato FINMA – BSI per USA (30.03.2015) 5. Presentazione EFG su acquisto BSI (22.02.2016) 6. Presentazione EFG aggiornata su acquisto BSI (31.03.2016) 7. Comunicato FINMA – BSI per 1MDB (24.05.2016) 8. Comunicato MAS – BSI per 1MDB (24.05.2016) 9. Comunicato BSI per 1MDB (24.05.2016) 10. Comunicato BSI per ricorso FINMA (24.05.2016) 11. Atto d’accusa / Indictment DoJ - 1MDB (20.07.2016)12. Link utili

Dati su BSI

2005 2006 2007 2007 2008 2009 2010 2011 2012 2013 2014 2015 1 sem. 2016BSI+Gottardo

Impieghi (equivalenti a tempio pieno)Totale 1'437 1'540 1'503 2'573 2'353 2'513 2'569 1'964 1'963 1'989 1'928 1'850 1'844Svizzera 1'159 1'329 1'284 2'001 2'035 1'980 1'346 1'317 1'335 1'280 1'202Estero 278 211 219 352 478 589 618 646 654 648 648

di cui Asia (pubblicato dal 2009) 161 264 310 317 316 310 307

Utile netto (mio. CHF) 110 135 202 101 103 57 58 71 -722 2 113

Utile lordo (mio. CHF) 143 218 277 178 273 204 166 197 197 173 153Ut. lordo CH (mio. CHF) 118 180 228 176 238 233 172 187 155 107 87Ut. lordo estero (mio. CHF) 25 38 49 2 35 -29 -6 10 41 65 66Ut. lordo estero % 21% 21% 21% 1% 13% -14% -4% 5% 21% 38% 43%

Fondi in gestione (mio. CHF) 52'179 59'876 62'626 98'626 78'200 78'100 76'200 77'746 86'262 89'376 92'330 84'274 73'700Afflussi netti di fondi (mio. CHF) 1'574 4'773 1'636 6'624 -2'197 3'559 6'690 7'519 2'200 -627 -4'800 -9'600

Le cifre sul personale sono influenzate da cessioni e acquisizioni; come nel 2011, quando non si è più consolidato il personale di B-Source.Le cifre sui fondi in gestione dipendono da acquisizioni e cessioni e dal metodo di calcolo, per esempio dal fatto di tener conto dei fondi in custodia.Lo stesso vale per il calcolo degli afflussi netti di fondi.I fondi in gestione non dipendono solo dai movimenti della clientela. Il valore degli averi varia pure con l'evoluzione dei mercati e dei cambi.

Fonte: Relazioni d'esercizio BSI, comunicati BSI, Swiss Life e BTG Pactual.

1. Dati su BSI (2005-2016)

2. Accordo di non perseguimento penale / Non Prosecution Agreement DoJ – BSI (30.03.2015)

3. Constatazione dei fatti / Statement of Facts DoJ – BSI (30.03.2015)

4. Comunicato FINMA – BSI per USA (30.03.2015)

Laupenstrasse 27, 3003 Berna tel. +41 (0)31 327 91 00, fax +41 (0)31 327 91 01 www.finma.ch

Comunicato stampa

Data: 30 marzo 2015 Embargo: ---

Operazioni transfrontaliere con clienti USA

La FINMA comunica la conclusione del procedimento nei confronti di BSI SA In data odierna, BSI SA è stata la prima banca ad aver concluso un Non-Prosecution Agree-ment (NPA) nel quadro del programma lanciato dal Dipartimento di giustizia statunitense (DoJ) per la risoluzione della controversia fiscale tra le banche svizzere e gli Stati Uniti. Nel contesto delle operazioni di BSI SA con clientela statunitense, l’Autorità federale di vigilanza sui mercati finanziari FINMA aveva avviato un procedimento di enforcement nei confronti della banca, nel corso del quale era emerso che quest’ultima aveva violato i propri obblighi di identificazione, limitazione e controllo dei rischi in merito alle relazioni d’affari con clienti statunitensi.

Nel marzo 2013, ossia prima che il Dipartimento di giustizia statunitense (DoJ) pubblicasse il programma per la risoluzione della controversia fiscale con le banche svizzere nell’agosto 2013, la FINMA aveva avviato un procedimento di enforcement in merito alle relazioni d’affari di BSI SA con clientela statunitense.

La BSI SA ha violato il requisito in materia di organizzazione e di irreprensibilità

Nel suo procedimento di enforcement, la FINMA è giunta alla conclusione che BSI SA ha violato i propri obblighi di identificazione, limitazione e controllo dei rischi in merito alle relazioni d’affari con clienti statunitensi. In particolare, la banca intratteneva relazioni d’affari con un numero ragguardevole di clienti USA con patrimoni non dichiarati. Fin dopo il 2009, BSI SA ha accettato clienti statunitensi con patrimoni non dichiarati provenienti da altre banche svizzere che li avevano estromessi. Così facendo la banca ha esposto in maniera sproporzionata se stessa e i propri collaboratori a elevati rischi giuridici e di reputazione negli Stati Uniti, contravvenendo al requisito della garanzia di un’attività irreprensibile che un istituto deve fornire ai sensi del diritto svizzero in materia di vigilanza. La FINMA ha ammonito la banca e imposto l’adozione di misure correttive.

Primo NPA da parte di una banca svizzera nel quadro del Programma statunitense

In data odierna, BSI SA è stata la prima banca ad aver concluso un accordo con il DoJ nel quadro del Programma statunitense per la risoluzione della controversia fiscale fra le banche svizzere e gli Stati

2/2

Uniti. La FINMA auspica che le numerose altre banche che partecipano nella categoria 2 al Program-ma statunitense possano progressivamente raggiungere un’intesa con il DoJ, in modo tale da regola-rizzare la situazione pregressa correlata alla clientela imponibile negli Stati Uniti.

Modo di procedere della FINMA nei confronti delle banche della categoria 2

Come comunicato nel novembre 2013, la FINMA giudica la partecipazione di una banca nella catego-ria 2 del Programma statunitense una misura adeguata alla gestione dei rischi giuridici con gli Stati Uniti. In linea di principio, la FINMA non effettuerà ulteriori indagini presso le banche di questa catego-ria che raggiungono un’intesa con il DoJ. La FINMA non si esprimerà ulteriormente in merito alle sin-gole banche della categoria 2 e alla relativa intesa con le autorità statunitensi.

Contatto

Tobias Lux, portavoce, tel. +41 (0)31 327 91 71, [email protected]

5. Presentazione EFG su acquisto BSI (22.02.2016)

1 Restricted Information - Not for distribution in the United States, Canada, Brazil, Japan or Australia.

EFG International and BSI Joining Forces

Zurich, 22 February 2016


Important Legal Disclaimer Not for distribution in the United States, Canada, Brazil, Japan or Australia. This is a restricted communication and you must not forward it or its contents to any person to whom forward it is prohibited by the legends contained herein. This document has been prepared by EFG International AG ("EFG") solely for use by you for general information only and does not contain and is not to be taken as containing any securities advice, recommendation, offer or invitation to subscribe for or purchase or redemption of any securities regarding EFG. This document is not a prospectus pursuant to articles 652a and/or 1156 of the Swiss Code of Obligations or articles 27 et seq. of the SIX Swiss Exchange Listing Rules or under any other applicable laws. A decision to invest in securities of EFG should be based exclusively on the issue and listing prospectus published by EFG for such purpose. Investors must rely on their own evaluation of EFG and its securities, including the merits and risks involved. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, in any jurisdiction in which such offer or solicitation would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction. This document is not for publication or distribution in the United States of America, Canada, Australia, Brazil or Japan and it does not constitute an offer or invitation to subscribe for or purchase any securities in such countries or in any other jurisdiction. In particular, the document and the information contained herein should not be distributed or otherwise transmitted into the United States of America or to U.S. persons (as defined in the U.S. Securities Act of 1933, as amended (the "Securities Act")) or to publications with a general circulation in the United States of America. The securities referred to herein have not been and will not be registered under the Securities Act, or the laws of any state, and may not be offered or sold in the United States of America absent registration under or an exemption from registration under Securities Act. There will be no public offering of the securities in the United States of America. Any offer of securities to the public that may be deemed to be made pursuant to this communication in any member state of the European Economic Area (each a "Member State") that has implemented Directive 2003/71/EC (together with the 2010 PD Amending Directive 2010/73/EU, including any applicable implementing measures in any Member State, the "Prospectus Directive") is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive. The document does not constitute an offer of securities to the public in the United Kingdom. No prospectus offering securities to the public will be published in the United Kingdom. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. This communication contains side-by-side and combined financials of EFG and BSI SA ("BSI") which are presented for illustration purposes only and have not been adjusted for accounting differences or purchase accounting. This presentation contains specific forward-looking statements, e.g. statements, which include terms like "believe", "assume", "expect", "target" or similar expressions. Such forward-looking statements represent EFG’s judgments and expectations and are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, the financial situation, and/or the development or performance of the company and those explicitly or implicitly presumed in these statements. These factors include, but are not limited to: (i) the ability to successfully consummate the transaction and realize expected synergies, (2) general market, macroeconomic, governmental and regulatory trends, (3) movements in securities markets, exchange rates and interest rates, (4) competitive pressures, and (5) other risks and uncertainties inherent in the business of EFG and/or BSI. EFG is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law or regulation. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of EFG and/or BSI. The completion of the contemplated transaction remains subject to certain conditions and, if it is completed, EFG and BSI as a combined group may not realize the full benefits of the contemplated transaction, including the expected synergies, cost savings or growth opportunities within the anticipated time frame or at all.


Agenda

Transaction overview

BSI: Swiss bankers since 1873

EFG and BSI: a strong, solid Swiss private bank

Financials and transaction structure

Next steps and conclusion

Q&A

Joachim H. Straehle, CEO EFG International Stefano Coduri, CEO BSI Joachim H. Straehle Giorgio Pradelli, Deputy CEO & CFO EFG International Joachim H. Straehle Joachim H. Straehle and all




Creating a new leading Swiss private bank


Scale Competitiveness Swiss solution Complementarity Growth Solidity Heritage

EFG and BSI to become one of the largest private banks in Switzerland with approx. CHF 170 billion combined AuM1 (as at 31 December 2015)

Gaining significant competitive position in growing global wealth management

market; attractive for clients, employees, CROs and shareholders

Zurich, Geneva and Lugano to remain important locations for the governance and operation of the combined bank

Strong combined position in Switzerland and Europe/UK; doubling AuM in growth markets Asia and Latin America

Enhanced growth prospects based on leading private banking offering, combined global presence and extended CRO platform (currently 860 CROs)

Strong balance sheet and capital position

Both brands will be retained; intention to implement a combined brand – reflecting the heritage of both banks – in most geographies in the future

1 Including loans, as per EFG International’s long-standing definition of revenue-generating assets under management; BSI unaudited numbers



Consideration Intended capital raising

Shareholders

Indicative timetable

Consideration to be paid in cash CHF 975 million and 52.6 million EFG shares, corresponding to approx. CHF 1,328 million, applying EFG’s closing price on 19 February 2016

Compares with estimated IFRS tangible book value for BSI of approx. CHF 1,428 million as at year-end 2015 (vs. CHF 1,794 million under Swiss GAAP)

CHF 500 million rights offering (volume underwritten) CHF 250 million Additional Tier 1 capital Deal financing certainty exists from additional commitments by

BTG Pactual and EFG Bank European Financial Group (EFG Group)

BTG Pactual to become new shareholder of enlarged EFG with stake of approx. 20% Full commitment of EFG Group, remaining largest shareholder with over 35% Well-diversified shareholder-base

Shareholder approval – EFG AGM scheduled for 29 April 2016 Rights offering, AT1 capital – Q2 2016 Regulatory approvals – Q3/Q4 2016 Closing of transaction, share issuance to BTG Pactual, new management structure –

Q4 2016 Merger of BSI and EFG, one common IT platform – end 2017


Agenda






Q&A

Joachim H. Straehle, CEO EFG International Stefano Coduri, BSI Joachim H. Straehle Giorgio Pradelli, Deputy CEO & CFO EFG International Joachim H. Straehle Joachim H. Straehle and all



Specialized in private wealth management

BSI today

BSI is present in the key financial markets in Europe, Latin America, Middle East and Asia

Approx. 1,900 FTEs in 20 locations worldwide

Headquartered in Lugano; Singapore 2nd location after Lugano’s HQ per number of people

Moody’s rating: A3/Prime-2 , Outlook under review*

Joe Rickenbacher, Chairman of the Board of Directors

Stefano Coduri, Group CEO

Overview

Established in Lugano in 1873, BSI is one of the oldest banks in Switzerland

BSI specializes in private wealth management

BSI offers a complete range of products and services

BSI has a client-focused business model backed by high quality tailored solutions

* As of December, 2015



A successful story

1881 BSI is the only bank in Ticino authorised to issue banknotes until 1907.

1969 BSI establishes its presence in Nassau.

1935 BSI is the first bank in Ticino to open a branch office in Zurich and to hold a seat on the Stock Exchange.

1975 BSI extends its reach to the French speaking part of Switzerland.

1976 BSI opens the first representative office in South America.

1981 BSI opens the Hong Kong representative office.

1988 BSI expands its activities to the Principality of Monaco.

2005 Opening of BSI Bank in Singapore.

2008 BSI acquires Banca del Gottardo. Licence obtained for operating in the Kingdom of Bahrain.

1998 Assicurazioni Generali, Trieste, becomes BSI’s sole shareholder and Banca della Svizzera Italiana is officially renamed BSI

2006 BSI acquires Banca Unione di Credito. 2011

Migration to the Avaloq IT system. Sale of 51% of B-Source to Avaloq.

2012 BSI expands its Asian business and opens a branch in Hong Kong. Middle East business continues to grow with the representative office in the Kingdom of Bahrain being upgraded to a branch.

2013 BSI celebrates 140 years of success and service in the private banking sector. BSI opens a representative office in Istanbul. The Italian branch of BSI Europe in Milan starts operations.

2014 BSI opens BSI Bank in Panama.

1873 BSI is established in Lugano as Banca della Svizzera Italiana. 2015

Btg Pactual becomes BSI’s sole shareholder.



A global presence



Key strengths

Diversification Diversified client base with no market accounting for

more than 20% of Assets under Management

Solidity Sound balance sheet with low risk approach and high

liquidity

Pure play A pure private bank with a dynamic product offering

and competencies linked to local needs

People Competent, committed and stable staff, with strong

management team with long experience at BSI and in Private Banking sector

Brand Strong reputation and brand recognition with

over 140 years of service to clients

Global network Extended network covering major financial

markets

* As of December, 2015


Agenda






Q&A



A strong, solid Swiss private bank

EFG

Pure-play Swiss private bank offering private banking and asset management services

Head-office in Zurich, operations in Geneva Founded in 1995 462 client relationship officers (as of end-2015) SIX-listed since 2005, EFG Group 54% 31 locations worldwide Key markets: Switzerland, Monaco,

Luxembourg, Madrid, UK, Asia (Hong Kong, Singapore), Americas

BSI

Swiss private bank offering private banking and asset management services; EAM and retail/commercial offering in Ticino

Head-office in Lugano Founded in 1873 398 private bankers (as of end-2015) 100% owned by BTG Pactual since Sep 2015 20 locations worldwide Key markets: Switzerland (strong roots in Ticino),

Italy, Latin America, Asia (Singapore, Hong Kong), CEE, Middle East

At a glance

* IFRS *** Including loans

in CHF m* Audited

FY 2013 FY 2014 FY 2015

Revenue-generating AuM*** (in CHF bn) 75.9 84.2 83.3

Operating income 666.0 716.6 696.7

Net profit 111.8 61.4 57.1

CROs 435 440 462

in CHF m**

FY 2013 FY 2014 FY 2015

Revenue-generating AuM*** (in CHF bn) 101.1 103.3 87.7

Operating income 863.1 867.9 817.5

Net profit (16.8) 2.2 112.5

CROs 421 405 398

** Swiss GAAP; FY 2015 unaudited *** Including loans



Size and stability

Highly complementary

Compelling strategic match

Significant growth

opportunities

Size and stability - new top 5 player in Switzerland, well positioned to participate in ongoing consolidation in Private Banking

Highly complementary and stronger market presence – leveraging both businesses with global reach and a strong presence in growth markets

Compelling strategic match – combined strengths and product offering of EFG and BSI will benefit clients

Significant growth opportunities – attractive platform for clients, employees and shareholders

Unique value proposition

Leading Swiss private bank with the necessary strength, scale and solidity to compete in period of intensified market and regulatory challenges



New leading player in Switzerland

1,982

681

336

172 171 168*

144 135** 126 115 107

88 83 77 45

Incl. loans

Excl. loans

(in CHF bn)

Source: Company information, latest available data Notes * Including acquisition of Morgan Stanley Bank AG (CHF 10bn of AuM) ** Including acquisition of Coutts International (CHF 32bn of AuM)


A strong, solid Swiss private bank Complementary global presence

Bahamas Nassau Lyford Cay

Singapore Singapore

Bahrain Manama

Argentina Buenos Aires

Panama Panama

Uruguay Montevideo Punta del Este

Indonesia Jakarta

Ecuador Quito

Peru Lima

Cayman Islands Grand Cayman

Bermuda Hamilton

Colombia Bogota

United States Miami

Key Biscayne

Switzerland Zurich Geneva Ticino

Luxembourg Luxembourg

Turkey Istanbul

Italy Milano Como

Genova

France Paris

Monaco Monte Carlo

Spain Madrid

United Kingdom London

Birmingham

Channel Islands Guernsey Jersey

Cyprus Nicosia

Greece Athens

Liechtenstein Vaduz

Hong Kong Hong Kong

Taiwan Taipei

China Shanghai



Strengthened position in key markets

Global presence with representation in all major markets, including fast-growing emerging markets

Enhanced position in Switzerland / Ticino

Consolidation of position in key Western European markets

Enhanced position in CEE

Attractive growth platform in emerging markets; doubling AuM in Asia and Latin America

EFG

BSI

Switzerland

Europe

Global

UK Lux

Spain Italy

Monaco Asia Latin

America

CEE



Compelling strategic match

EFG strengths BSI strengths

Clients UHNWI/HNWI – global Institutionals – global

UHNWI/HNWI – global Retail/Commercial – in Ticino

Markets Switzerland Continental Europe, UK Emerging markets

Switzerland Italy/Continental Europe Emerging markets

Products Investment solutions, Treasury, Financial Markets

Capital Markets, Treasury, Asset Management, Family office services

Operations, Corporate Services

Swiss-based (Geneva) Swiss-based (Lugano)



Significant growth opportunities

Shareholders – enhanced value Attractive growth platforms in mature and

emerging markets Significant cost synergies envisaged EPS accretion expected Swiss financial center – enhanced global reach based on strong Swiss roots Swiss solution in an environment marked by

consolidation Zurich, Geneva and Lugano to remain important

locations for the governance and operations Global reach and growth prospects built out of

Switzerland

Clients – enhanced offering Private banking expertise, investment solutions

and trading capabilities Cross-border and onshore capabilities, broader

international presence Strong client relationships Employees – enhanced stability and attractiveness Improved competitive position Attractive platform for current and additional CROs Building on the great talent at both banks



Strategic priorities

Smooth alignment, combining best of both worlds

Focus on regions Align strengths and offerings

Grow AuM and Top line

Adjust and develop Management and Performance culture

Realize synergies, use economies of scale

Combine organizations

Develop combined strategic positioning

Sharpen market focus and offering

Grow AuM and revenue

Performance management

Develop strong regional management

Strengthen functional responsibilities

Strategic thrust

Resolve legacy issues


Agenda






Q&A



EFG International Full-Year 2015 results


Financials summary

IFRS net profit CHF 57.1 m

Pre-provision operating profit CHF 92.4 m

Underlying recurring net profit* CHF 91.1 m

Operating income CHF 696.7 m

Revenue margin 85 bps

Net new assets CHF 2.4 bn

Net new asset growth 3%

Revenue-generating AuM CHF 83.3 bn

Operating expenses CHF 604.3 m

Cost-income ratio 86.1%

CROs 462

Total headcount 2,169

Total FTEs 2,137

BIS total capital ratio (Basel III) 16.8%**

CET 1 capital ratio (Basel III) 12.8%**

Return on shareholders’ equity* 8.1%

Return on tangible equity* 10.7%

vs. 2014

from CHF 61.4 m

* Excl. impact of non-recurring items ** BIS-EU

from 89 bps

from CHF 716.6 m

from CHF 575.0 m

from 79.8%

from CHF 131.0 m

from CHF 84.2 bn

from CHF 4.4 bn

from 440

from 18.7%

from 14.2%

from 12.2%

from 2,059

from 6%

from CHF 141.6 m

2015

from 16.4%

from 2,027


2015 Highlights

Annualized NNA growth for 2H15 at 7%; rebound in NNA in 2H15 after performance in 1H15 reflected exit from certain non-strategic lending business Revenue-generating AuM (in CHF bn)

2014

Net new assets (in CHF bn)

RoAuM (in bps)

Net interest

Commission

Other income

2015

Annualized growth rate

80.8

83.3

2014

31

47

11 89

1H15

25

47

87 15

2015

25

46

85 15

83

2H15 24

45

14

2015

2H14

-1%

+3%

2014

+ 7% 4.4

1H14 2H15 1H15

2.7

1.7

(0.3)

2.7

+7% +4%

+6% 106 101 103 98

RoAuM on AuM excl. loans

2.4

Average revenue-generating AuM (in CHF bn)

2014 2015

80.4 81.7

+ 2%

Excluding negative currency impact of 4%, AuMs increased by approx. 3%

Average AuM up 2% despite negative FX impact

Annualized NNA growth for 2H15 at 7%

Best half-year performance in NNA since business review (Oct 2011), at the same level as 1H14 performance

Contribution from life insurance substantially lower, CHF 0.1 m in 2015 vs CHF 22.8 m in 2014, mainly responsible for the decline of RoAuM in 2H15

Weaker net commission income due to lower client risk appetite driven by instability in emerging markets

FX impact

84.2 3.4


Operating income – key components

Core private banking revenues in 2H15 increased by 3% vs 1H15

Core private banking revenues for 2015 stable versus 2014 at CHF 640.7 m

Core private banking revenues up 3% vs. 1H15 and only slightly below the 2H14 level

ALM revenues skewed to 1H15, in particular to 1Q15; weak performance in 4Q15 driven by continued decline in contribution from life insurance (CHF (6.8 m) in 2H15 versus CHF 6.9 m in 1H15)

2014

640.4

53.4

Operating income components (in CHF m)

Operating income – Private banking & Asset management

Operating income – Asset and liability management (excl. life insurance revenues)

716.6

2015

640.7

55.9 696.7

1H14

13.1

2H14

299.7

1H15

309.5

342.9 22.5

2H15

330.9

373.7 30.9

315.5

353.0 30.6

325.2

343.7 25.3

6.9

Operating income – Life insurance revenues

(6.8)

11.9 10.9

22.8 0.1


Operating expenses

Personnel expenses (in CHF m)

Other operating expenses (in CHF m)

* CIR = Ratio of IFRS operating expenses before amortisation of acquisition related intangibles

418.8

2014 2015

436.1

2014

156.2

2015

168.2

Operating expenses (in CHF m)

102 CROs have been hired during 2015, of which 36 in 1H15 and 66 in 2H15

Increased costs for new CROs of CHF 21.7 m in 2015 compared to CHF 8.3 m in 2014

Operating expenses up 5% y-o-y, reflecting investment in growth – CROs as well as in compliance & risk functions

New advisory branch in Cyprus is operational and performing in line with expectations; along with the rep office in Athens, they reached break-even during the year

FTEs up 110 vs. 2014 due to 65 new front roles, 12 IT & operation roles related to the Spanish bank platform development. 18 compliance roles and asset management up by 15

2015 includes CHF 11.1 m in exceptional legal and professional charges, up from CHF 5.9 m in 2014

Increased premises costs in Asia

11.1

157.1

Cost-income ratio* (in %)

86.1

2015 2014

79.8

5.9 150.3

604.3

2015 2014

575.0

308.3

2H15 1H15

296.0

89.1

2H15 1H15

83.3

216.8

1H15 2H15

219.3

1H15

79.2

2H15

89.0 8.1

80.9 3.0 76.2


Underlying recurring net profit vs IFRS profit (I)

2015 2014

IFRS profit

for 2015

57.1

11.1

Exceptional legal and

professional charges

91.1

2015 Underlying recurring

profit

(4.3)

Other litigation provision reversal

21.4

US tax related costs

2.2

Restructuring costs

2015 underlying recurring net profit declined by 30% versus last year; reflects weaker performance in 2H15

IFRS profit

for 2014

61.4

33.7

Litigation provisions

131.0

2014 Underlying recurring

profit

30.0

US tax related costs

5.9

Exceptional legal and

professional charges

3.6

CRO acquisition

costs

22.8

108.2

(in CHF m) Life insurance

One time payment of CHF 29.9 m, representing 1.9% of peak AuM falling within the DOJ Program

(in CHF m) Life insurance

91.0 0.1


AuM and NNA by business region

2.9*

19.5

11.6

16.2

17.6 Continental Europe

UK

Americas

Asia

EFG AM (Net)

Dec 2015 AuMs CHF 83.3 bn

2015 NNA: CHF 2.4 bn

11.8**

15.0 Switzerland 18%

21%

19%

14%

23%

4%

as % of total AuM

RoAuM (in bps)

NNA growth (in %)

104

74

73

84

87

116

47

Investment Solutions

4%

14%

-4%

-4%

5%

-6%

-3%

* External business only ** Total AuM partly included in business regions Note: Breakdown excludes CHF 0.5 bn included in Corporate Center

(0.2)*

(0.4) AuM YoY variation excl. FX

0.6

2.2

(0.7)

(0.5)

1.0

Return to positive NNA growth in Switzerland very strong performance in Continental Europe




EFG and BSI side by side – key financials

Financial Year 2015 IFRS Audited

Swiss GAAP Unaudited

Revenue generating AuM, CHF bn 83 88

Gross margin 85 bps 86 bps

Operating income, CHF m 697 817

Operating expenses, CHF m (604) (650)1

Reported profit after tax, CHF m 57 112

Cost-income ratio 2 86% 80%

Gross assets, CHF bn 27 21

Loans, CHF bn 12 10

Deposits, CHF bn 19.9 17.6

CROs 462 398

FTEs 2,137 1,852

1 Including depreciation 2 CIR = Ratio of operating expenses, including depreciation, before amortisation of acquisition related intangibles

Revenue-generating assets under management (based on EFG’s definition) above CHF 80 bn for both institutions. The combined entity will have approx. CHF 170 bn AuM

EFG’s reported profit impacted by payment for US Tax Programme and exceptional legal and professional charges. Underlying recurring net profit was CHF 91.1 m

Both banks have strong and liquid balance sheets

Combined bank with currently 860 CROs globally


Transaction structure - purchase price, financing

Consideration for the purchase of BSI shares to be paid in cash for a total of CHF 975 million and 52.6 million new EFG shares

BTG Pactual to become a 20% shareholder in EFG

Applying EFG’s closing price of CHF 6.70 on 19 February 2016 to the 52.6 million shares, the total purchase price would amount to approx. CHF 1,328 million including agreed adjustment at closing currently estimated to be at CHF 25 million – which compares with estimated IFRS tangible book value for BSI of approx. CHF 1,428 million as per 31 December 2015 (vs. CHF 1,794 million under Swiss GAAP)

The purchase price will be further adjusted based on the net new money between 30/11/15 and closing as well as for the change in tangible book value between 31/12/15 and closing

Net profit until closing for the benefit of BTG Pactual

The share purchase agreement with BTG Pactual contains strong representations, warranties and indemnities for the benefit of EFG in relation to known and other risks

In addition, a material escrow account has been agreed


Transaction structure – purchase price, financing

Purchase price of CHF 1,328 million; capital raising of CHF 750 million

(in CHF m)

Tangible book value 1,428 1,328

Capital raising Existing cash Purchase Price

52.6m EFG

shares

975

Rights issue

AT1 issuance

250

225

500

Pending shareholder approval at EFG’s Annual General Meeting scheduled for 29 April 2016, EFG intends to raise capital through: CHF 500 million new equity,

expected to be raised via a rights offering (volume underwritten) to existing shareholders (with participation of EFG Group of at least CHF 125 million)

CHF 250 million Additional Tier 1 capital

Balance amount of CHF 225 million planned to be funded by available cash

Dilution protection for BTG Pactual

BTG Pactual’s investment in EFG is subject to specific anti-dilution provisions, which may result in additional shares being issued to BTG Pactual in the event the issuance price in the share capital increase falls below a certain threshold



Assured deal certainty

If there is no rights issue:

EFG Group has committed to subscribe to CHF 125 million in a non pre-emptive share capital increase, at CHF 6.12 per share

BTG Pactual will receive as consideration up to CHF 250m of new EFG shares at CHF 6.80 per share (capped at a 30% stake with the excess invested in additional AT1 capital instruments) and invest at least CHF 125m in new EFG AT1 capital instruments

CHF 600m cash payment to BTG Pactual will still leave EFG with strong capital ratios*

(in CHF m)

* If AT1 markets are closed, CHF 250m will also be raised from existing cash. Also in this event Total Capital Ratio (Basel III fully loaded) is expected to be above 15%

725m

21.1m EFG shares 52.6m

EFG shares

AT1 BTG

20.4m EFG

shares

250m AT1 to market*

132m

125m

BTG Consideration Committed Capital AT1 to market / Cash

CHF 600m net cash for BTG Pactual

AT1 BTG 125m

225m Cash

475m

Substitution of shares into AT1 to keep BTG

stake up to 30%

Additional EFG consideration shares

to BTG valued at CHF 6.80 per share

EFG Group will be issued new EFG

shares at CHF 6.12 per share

52.6m EFG

shares

Tangible book value 1,428m

21.1m EFG

shares

AT1 BTG

725m


100% 0% 15% 70%

Fully phased-in cost synergies of ~CHF 185 million

EFG targets fully phased in pre-tax cost synergies of ~CHF 185 million p.a.

Targeted cost synergies to be shared between both banks and across markets and functions – more than half expected to result from migration to one common IT platform

Targeted cost synergies from the transaction are on top of existing efficiency programs for EFG (for 2016)

In addition, revenue synergies are targeted from the enhanced geographic and CRO platform along with an integrated financial markets set-up. These synergies are currently not factored into the estimates and present an upside potential

0

~28

~130

~185

2016 2017 2018 2019

Phasing

Targeted cost synergies

CHF m


~(9) ~(12)

~50

~85

Net synergies of ~CHF 85 million

Estimated one-off implementation costs of ~CHF 200 million which are expected to be phased over 2016 - 2018

Assuming attrition rate of around 5-10% of combined AuM1 in the first three years, potential PBT (profit before tax) loss of ~CHF 60 -105 million

Post tax synergies (based on a 7.5% attrition rate and 17.5% tax rate), expected to be ~CHF 85 million

Transaction is expected to be EPS accretive in 2018, with double digit accretion from 2019 onwards

CHF m

Targeted post-tax synergies2

2016 2017 2018 2019

1 Including loans, as per EFG’s long-standing definition of revenue-generating assets under management 2 Based on 7.5% attrition rate


Potential for optimization of risk weighted assets for BSI (CHF 9.0 billion1 RWAs vs. CHF 6.2 billion2 for EFG) which will improve the capital position of the combined entity

Total capital ratio (Basel III fully loaded) is expected to be above 15% in 2016

Given the funding of the transaction through equity, capital ratios to remain comfortably above regulatory requirements

Strong capital position

1 As of 1H 2015 2 As of YE15


Well-diversified shareholder base

Shareholder structure

BTG Pactual to become additional shareholder of the enlarged EFG with a stake of 20% Up to a maximum of 30%, depending on the ultimate

financing structure Representation on EFG’s board of directors, subject to

shareholder approval

EFG Group to remain the largest shareholder with over 35%

Combined bank will have a well-diversified shareholder base

Other Shareholders EFG Group BTG Pactual

>35%

~20%

~46%


Agenda






Q&A




Integration process – milestones

Until closing of transaction, expected in Q4 2016, EFG and

BSI will continue to operate independently At closing, new management structure for the combined

business will take effect; Joachim H. Straehle will remain CEO and Giorgio Pradelli will remain Deputy CEO & CFO of the combined bank; BSI will continue to operate in its current form as a subsidiary of EFG

Both BSI and EFG brand will be retained; following joint evaluation, intention is to implement a combined brand – reflecting the heritage of both banks – in most geographies in the future, with possible exceptions such as in Ticino and Italy

The integration process will be crucial in order to realize the benefits of this combination. EFG looks forward to work alongside BSI to forge the combined bank. The integration project will start after closing

Indicative timetable

29 April 2016 EFG Annual General Meeting, shareholder approval

2nd quarter 2016

Rights offering; offering of Additional Tier 1 capital

3rd/4th quarter 2016

Regulatory approvals 4th quarter 2016

Completion of transaction, issuance of new shares to be subscribed by BTG Pactual, new management structure in place

End-2017

Merger of BSI and EFG, one common IT platform


Transaction rationale

Improve EFG’s competitive position and establish a top tier Swiss Private Bank

Become a consolidator in the Swiss private banking market

Global presence in all growth markets and a strong footprint in Emerging Markets

Significant potential for economies of scale and cost / revenue synergies

Acquisition price does not reflect any goodwill

BSI’s private bankers to benefit from EFG’s entrepreneurial model


EFG International and BSI Joining Forces Q&A

Zurich, 22 February 2016

6. Presentazione EFG aggiornata su acquisto BSI (31.03.2016)

1 Not for release, publication or distribution in the United States of America, Brazil, Canada, Japan or Australia

EFG International and BSI Joining Forces Update call presentation Zurich, 31 March 2016


Important Legal Disclaimer THIS IS A RESTRICTED COMMUNICATION AND YOU MUST NOT FORWARD IT OR ITS CONTENTS TO ANY PERSON TO WHOM FORWARDING THIS COMMUNICATION IS PROHIBITED BY THE LEGENDS CONTAINED HEREIN. These materials are not an offer for sale of securities in the United States. Securities may not be sold in the United States absent registration with the United States Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. EFG does not intend to register any of its securities in the United States or to conduct a public offering of securities in the United States.

Important Disclaimer This document is not an offer to sell or a solicitation of offers to purchase or subscribe for securities. This document is not a prospectus within the meaning of Article 652a of the Swiss Code of Obligations, nor is it a listing prospectus as defined in the listing rules of the SIX Swiss Exchange AG or a prospectus under any other applicable laws. Copies of this document may not be sent to jurisdictions, or distributed in or sent from jurisdictions, in which this is barred or prohibited by law. The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, in any jurisdiction in which such offer or solicitation would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction. A decision to invest in securities of EFG International AG should be based exclusively on the issue and listing prospectus published by EFG International AG for such purpose.

This document is not for publication or distribution in the United States of America, Brazil, Canada, Australia or Japan and it does not constitute an offer or invitation to subscribe for or purchase any securities in such countries or in any other jurisdiction. In particular, the document and the information contained herein should not be distributed or otherwise transmitted into the United States of America or to U.S. persons (as defined in the U.S. Securities Act of 1933, as amended (the "Securities Act")) or to publications with a general circulation in the United States of America. The securities of EFG International AG have not been and will not be registered under the Securities Act, or the laws of any state, and may not be offered or sold in the United States of America absent registration under or an exemption from registration under Securities Act. There will be no public offering of the securities of EFG International AG in the United States of America.

The information contained herein does not constitute an offer of securities to the public in the United Kingdom. No prospectus offering securities to the public will be published in the United Kingdom. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). The securities of EFG International AG are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Any offer of securities to the public that may be deemed to be made pursuant to this communication in any member state of the European Economic Area (each an "EEA Member State") that has implemented Directive 2003/71/EC (together with the 2010 PD Amending Directive 2010/73/EU, including any applicable implementing measures in any Member State, the "Prospectus Directive") is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive.

This document contains specific forward-looking statements, e.g. statements, which include terms like "believe", "assume", "expect", "target”, “intends”, “may”, “will”, “seeks” or “should” or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. Such forward-looking statements represent EFG’s judgments and expectations. They speak only as of the date on which they are made and are based on the knowledge, information available and views taken on the date on which they are made; such knowledge, information and views may change at any time. By their very nature, forward-looking statements are not statements of historical or current facts; they cannot be objectively verified, are speculative and involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. EFG cautions readers that a number of factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements made by EFG or on EFG’s behalf. These factors include, but are not limited to: (1) the ability to successfully consummate the acquisition of BSI SA ("BSI") and realize expected synergies, (2) general market, macroeconomic, governmental and regulatory trends, (3) movements in securities markets, exchange rates and interest rates, (4) competitive pressures, and (5) other risks and uncertainties inherent in the business of EFG and/or BSI. EFG is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law or regulation. Neither the delivery of this document nor any further discussions by EFG with any of the recipients thereof shall, under any circumstances, create any implication that there has been no change in the affairs of EFG since such date. All subsequent written and oral forward-looking statements attributable to the EFG or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Nothing contained herein is, or shall be relied on as, a promise or representation as to the future performance of EFG and/or BSI SA and its subsidiaries ("BSI"). The completion of the contemplated transaction remains subject to certain conditions and, if it is completed, EFG and BSI as a combined group may not realize the full benefits of the contemplated transaction, including the expected synergies, cost savings or growth opportunities within the anticipated time frame or at all.

This communication contains side-by-side and combined financials of EFG and BSI which are presented for illustration purposes only and have not been adjusted for accounting differences or purchase accounting.


Agenda

Introduction

BSI overview

EFG and BSI side by side

Synergies

Integration

Conclusion

Q&A

Joachim H. Straehle, CEO EFG International Stefano Coduri, CEO BSI Giorgio Pradelli, Deputy CEO & CFO EFG International Giorgio Pradelli Peter Fischer, Head of Strategy EFG International Joachim H. Straehle All


Update on the combination with BSI

On 22 February, EFG International announced that it is joining forces with BSI

The combination will create a strong, stable and sizeable organisation with a powerful value proposition towards clients, employees and shareholders

We continue to work towards successful closing of the transaction in 4Q16

- Preparation of financing and discussions with regulators are ongoing and on track

- We have commenced preparation work for the integration phase and have a dedicated integration team in place which has started planning for the rapid integration of the two organisations

The group will use EFG International’s highly scalable IT core banking platform, allowing the combined business to

materially reduce its IT expenses

Today’s presentation provides:

- Further information on BSI Group, its performance track record and operations

- Additional details on targeted synergies

- An update on the preparation of the integration plan


BSI overview

Business overview Historical financials


Established in Lugano in 1873, BSI specializes in private wealth management of HNW and UHNW individuals

BSI has a client-focused business model backed by high quality tailored solutions

BSI is present in key financial markets in Europe, Latin America, Middle East and Asia

BSI has 10 booking centres worldwide with approx. 1,850 FTEs, of which 398 are CROs

Key IFRS financial data 2015:

- Revenue-generating AuM1: CHF 87.7bn

- Operating income: CHF 841.8m

- Net profit: CHF 128.8m

- Book value: CHF 1,477.1m

BSI is rated A3 by Moody’s (placed under review for upgrade on 25 February 2016)

BSI at a glance

Revenue-generating AuM by client profile (2015)

Key historic milestones

1873: Established in Lugano 1976: First representative office in South America 1981: Hong Kong representative office 1998: BSI acquired by Generali 2005: BSI Bank in Singapore 2006: BSI acquires Banca Unione di Credito 2008: BSI acquires Banca del Gottardo 2012: Branch in Hong Kong 2015: BSI acquired by BTG Pactual

Total: CHF 87.7bn 1 Revenue-generating AuM = Assets under management, excluding custody, plus loans

Source: Unaudited IFRS financials

UHNWI (>CHF 10m)

49%

HNWI (CHF 1-10m)

34%

Affluent (CHF 500k-1m)

6%

Mass Affluent (CHF 100-500k)

5%

Retail (<CHF 100k)

1%

Others 5%


76.2 77.7 86.3 89.4 92.3

77.2

7.6 9.4

10.5 10.3

11.7

10.4 83.8

87.1

96.8 99.7

104.0

87.7

2010 2011 2012 2013 2014 2015

6%

89.4 92.3 77.2

10.3 11.7

10.4

0.9

(6.2) (1.5) (3.1)

1.3

(1.2)

5.4

(4.5)

(1.9)

(1.2)

BSI revenue-generating AuM evolution

Steady growth in AuM until 2014; 2015 impacted by exit of businesses and the sale process

AuM Loans

Change in scope of consolidation

Change of asset classification

99.7 104.0

87.7

Revenue-generating AuM evolution (in CHF bn)

Revenue-generating AuM bridge 2013-2015 (in CHF bn)

AuM

Loans

Revenue-generating AuM CAGR of c.6% over 2010-14 AuM evolution in 2014-2015 impacted mainly by:

- Exit of businesses – in Asia and non-core countries

- Uncertainties created by the multiple sale processes which started for the first time in 2012

BSI approach to client regularisation (incl. pro-active interaction with clients) has limited AuM loss and solidified client retention

Positive development in AuC (assets under custody) – from CHF 1.7bn in 2014 to CHF 7.1bn in 2015

2013 NNM ex. Exit

Exit Market perform. &

FX

Loans Other 2014 NNM ex. Exit

Exit Market perform. &

FX

Loans Other 2015



BSI is focused on private banking business with HNWI / UHNWI

Almost half of the total assets are held by Ultra High Net Worth Individuals

BSI is focused on private clients

- 90% of total assets related to Private Banking business

- 83% of total assets related to HNWI / UHNWI

Advisory services constitute c.19% of total AuMs while discretionary mandates constitute c.15% of total AuMs

No major concentration risk

83% of total assets are from HNWI and UHNWI

Revenue-generating AuM by client profile (2015)

Revenue-generating AuM by asset class (2015)

Cash & deposits

22%

Bonds 21%

Equities 16%

Funds 25%

Structured products

2%

Loans 12%

Others 2%


Well diversified asset mix with significant scope for increased returns

44% of assets denominated in USD, 26% in EUR, 16% in CHF

UHNWI (>CHF 10m)

49%

HNWI (CHF 1-10m)

34%

Affluent (CHF 500k-1m)

6%

Mass Affluent (CHF 100-500k)

5%

Retail (<CHF 100k)

1%

Others 5%


12.4

17.5

17.5

5.1

23.3

13.1

15.1

8.3

17.8

12.4

4.7

19.4

12.0

12.9

Other

Latin America &Middle East

Asia

CEE

Other Europe

Switzerland

Italy

BSI has a well diversified geographic mix

Revenue-generating AuMs by business region1 (YE 2015)

14%

5%

14%

20%

9%

as % of total AuM (2015)

2015 2014

74% Singapore; 24% Hong Kong

76% Latin America; 24% Middle East

Switzerland & Europe

22%

15%

Strong footprint in Switzerland, Italy and Asia

Total CHF 87.7bn (2015)

1 The definition of the region follows in general the organisational structure of the bank (management responsibility) and the location of the CROs, with the exception of CEE

In CHF bn



677 Front-office FTEs of which 398 are CROs, 77 Investment specialists and 189 PB assistants

AuM per CRO at CHF 220m, up by 17% from CHF 188m in 2010

Loyal CRO base – average CRO tenure of 11 years

143 CROs in Ticino (36% of total)

BSI has an efficient and loyal CRO base

Revenue generating AuM per CRO (CHFm)

220 242 236 215 196 188

259

62

68

9

446 444 450 422 429

398

2010 2011 2012 2013 2014 2015

BSI Europe & Switzerland BSI Latin America & Middle East BSI Asia Other

CRO evolution since 2010


0.3

1.5

3.5

0.6

2.2

3.6

0.2

1.4

2.7

0.6

2.1

3.4

Other

Latam & ME

Asia

CEE

Europe / Italy

Switzerland

Loans by business regions

Loans by type (YE 2015)

33%

20%

6%

26%

2%

13%

CHF 10.4bn

BSI has a conservative loan book

as % of total (2015)

Lombard loans constitute c.46% of total loans

c.33% of loans within business region Switzerland

Strong collateral for commercial and residential mortgages

- LTV of c. 49% for residential and c.44% for commercial mortgages

Concentrated on Lombard lending, with largest exposure in Switzerland

Switzerland & Europe

Total CHF 10.4bn (2015)

Lombard loans 46%

Residential mortgages

35%

Commercial loans 9%

Commercial mortgages

7%

Other 3%

2015 2014

1 Latin America & Middle East

1



194 385 41

40 286

227 520

652

2014 2015Personnel Depreciation & amortisation Other

Revenue breakdown by type (in CHF m)

BSI – Stable operating performance despite recent headwinds

Stable core income – net interest income and commissions constitute c.80 % (avg. 2014-15) of total revenues

RoAuM (bps)

99 RoAuM Excl loans

Margin increase in 2015 driven by other income, offsetting decline in commission margins

Adjusted C/I improved from 88% in 2014 to 77% in 2015

Operating expenses breakdown (in CHF m)

61% 77% C / I ratio1

Improving margins and cost - income ratio

94

197 188

513 455

146 199

856 842

2014 2015Net interest Net fee and commission Other

19 20

50 47

14 21

84 88

2014 2015Net interest Net fee and commission Other

88% 77% Adj. C / I ratio2

1 Ratio of operating expenses (including depreciation and amortisation) to operating income

2 Operating expenses in 2014 adjusted for past service cost pension plan amendment (CHF 235.4m)



IFRS net profit CHF 109.5m CHF 128.8m

Operating income CHF 855.6m CHF 841.8m

Revenue margin 84 bps 88 bps

Net new money1 CHF 0.9bn CHF (6.2)bn

Revenue-generating AuM CHF 104.0bn CHF 87.7bn

Operating expenses CHF 520.4m CHF 652.1m

Cost / income ratio2 60.8% 77.5%

Adjusted cost-income ratio3 88.3% 77.5%

CROs 429 398

Total FTEs 1,928 1,850

BIS total capital ratio (Basel III)4 17.1% 22.8%

CET 1 capital ratio (Basel III)4 16.3% 21.9%

Return on shareholders’ equity n.a. 8.9%

Return on tangible equity n.a. 9.8%

BSI Financials summary (IFRS) 2015 2014

1 Excluding impact from businesses exited 2 Ratio of operating expenses (including depreciation and amortisation) to operating income 3 Operating expenses in 2014 adjusted for past service cost pension plan amendment (CHF235.4 m) 4 Regulatory capital reported to FINMA under Swiss GAAP Source: Unaudited IFRS financials


EFG and BSI side by side


Side by side – Revenue generating AuMs and CROs

Financial Year 2015

Revenue-generating AuM, CHF bn 83.3 87.7

NNM1, CHF bn 2.4 (9.3)

FTEs (#) 2,137 1,850

CROs (#) 462 398

AuM / CRO, CHF m 180 220

Revenue-generating assets under management above CHF 80bn for both institutions. The combined entity will have approx. CHF 170bn AuM

Complementary presence in Europe. BSI’s relative strength in Italy is complemented by EFG’s strength in Spain and UK

In Asia, EFG has a relatively stronger presence, however pockets of complementarity exist (EFG relatively stronger in Hong Kong while BSI stronger in Singapore)

Similar scale, highly complementary geographical reach

1 For BSI, NNM includes impact from businesses exited


Side by side – P&L metrics

Net interest and commission income constitutes c.83% of total revenues for EFG vs. c.76% for BSI

Revenue margins are broadly similar across EFG and BSI

EFG’s reported profit impacted by payment for US Tax Programme and exceptional legal and professional charges. Underlying recurring net profit was CHF 91.1m

Financial Year 2015 IFRS1 IFRS1

Net interest income, CHF m 200.6 187.7

Net fee and commission income, CHF m 375.3 454.8

Other income, CHF m 120.8 199.2

Operating income, CHF m 696.7 841.8

Operating expenses, CHF m (604.3) (652.1)

o/w personnel expenses, CHF m (436.1) (385.2)

Cost / Income ratio2 87% 77%

Reported profit after tax, CHF m 57.1 128.8

Return on tangible equity3 10.7% 9.8%

RoAuM (bps) 85 88

Similar return levels

1 Audited financial statements for EFG and unaudited statements for BSI 2 Ratio of operating expenses (including depreciation and amortisation) to operating income 3 For EFG, return on tangible equity based on underlying recurring net profit, excluding impact of non-recurring items


Side by side – Balance sheet and regulatory capital

Significant potential for capital efficiency improvements

Financial Year 2015 IFRS1 IFRS1

Loans, CHFbn 12.1 10.4

o/w Lombard loans 8.8 4.8

o/w Mortgage loans 3.1 4.3

Total assets, CHFbn 26.8 21.1

Deposits, CHFbn 19.9 17.6

Tangible equity, CHFbn 0.9 1.3

RWA, CHFbn 6.2 8.1

RWA / loans (%) 51.2% 77.3%

CET1 capital ratio (Basel III fully applied)2 12.8% 21.9%

Total capital ratio (Basel III fully applied)2 16.8% 22.8%

Leverage ratio2 (FINMA) 3.1% 7.6%

Liquidity coverage ratio (LCR) 224% 144%

Net stable funding ratio (NSFR) 164% 137%

Lombard loans constitute c.73% of total loans for EFG vs. c.46% for BSI

While both EFG and BSI have liquid balance sheets, EFG’s liquidity metrics are above BSI

RWA / loans ratio is significantly higher for BSI at 77.3%, highlighting an opportunity for improved capital efficiency

1 Audited financial statements for EFG and unaudited statements for BSI 2 For BSI regulatory capital and leverage ratio reported to FINMA under Swiss GAAP


Estimated synergies

Sources of estimated synergies Infrastructure Overlap of entities Optimisation of perimeter

Estimated integration costs


Key pillars of estimated costs synergies

Infrastructure

Overlap of operations

Optimisation of perimeter

IT, Operations, Premises Migrating BSI to EFG’s platform

Overlapping business in key geographies

Exit of non strategic businesses and / or subcritical locations


Overlapping operations create potential for synergies

EFG

BSI

Switzerland

Europe

Global

UK

Lux

Spain

Italy

Monaco

Miami

Colombia, Peru, Equador

Latin America

Uruguay

Bahamas

Argentina

Panama

Hong Kong

Asia

Singapore

Selected booking centres1

Panama

Complementary footprint in

Ticino

Italy

Spain

Overlapping booking centres across key booking centres

Zurich

Geneva

Monaco

Luxembourg

Bubble split represents AuM contribution in respective booking centers Size of the bubble represents relative proportion of AuM

1 Based on AuM excl. loans

Hong Kong Singapore Bahamas

UK Miami Panama


100% 0% 15% 70%

Fully phased-in targeted cost synergies of ~CHF 185m

EFG targets fully phased in pre-tax cost synergies of ~CHF 185 million p.a., representing c.28% of BSI’s 2015 cost base

Targeted cost synergies to be shared between both banks and across markets and functions – more than half expected to result from migration to one common IT platform

Targeted cost synergies from the transaction are on top of existing efficiency programs for EFG (for 2016)

Cost synergies targeted by EFG are in line with precedents in the private banking space

0 ~28

~130

~185

2016 2017 2018 2019

Phasing

Targeted cost synergies (in CHF m)

Target cost synergies at announcement / Target’s cost base

14%

37% 29%

23% 28%

JB / UBSIPBs

BSI /Banca

Gottardo

JB / INGSwitz.

JB / MLIWM

EFG /BSI

2005 2007 2009 2012 2016

Share deal

Asset deal


Breakdown of targeted synergies

IT, OPs & Premises

Corporate Structure

Front Office

Governance Functions and Other

Total cost synergies

Amount (in CHF m)

Cost synergies mainly driven by IT % of Total Key actions

59%

14%

11%

15%

100%

Migrating to in-house platform Economies of scale in Global Operations CHF 10m savings on premises

Corporate structure simplification

Increasing efficiency of front office operations

Improve operational efficiencies and centralise processes

Economies of scale - insurance, travel, consulting, etc.

110

27

21

28

% of combined

costs

35%

28%

4%

11%

15% 185


Rationale for IT/Operations platform choice

BSI IT/Ops like for like annual spend is c. CHF 160m versus c. CHF 80m for EFG, for similar AuM and FTE

EFG platform has relatively low software licensing and other 3rd party external costs Cost

Efficiency

Control

Coverage

EFG platform has proven to be scalable, and has spare capacity to accommodate additional assets, products, or booking centres at low marginal cost

External consulting studies have concluded that EFG would derive significant benefit from organic or inorganic business growth due to its scalable platform

EFG is largely independent and has direct internal control of platform developments and changes, whereas BSI is materially dependent on third party providers

BSI has no platform or booking centre capabilities in UK or Miami (substantial regional hubs for EFG)

EFG has a proven track record of adding new locations and booking centres to the IT/Ops platform at marginal incremental cost

BSI will migrate to EFG’s IT platform


Migration of BSI to EFG’s IT platform

Substantial synergies will be achieved from the integration as BSI offers very similar products and services to EFG; the Operating Model is similar (both have highly centralised IT platforms centred around a core banking system), and both have similar geographic footprints

The combined organisation will run on an upgraded version of the current EFG IT platform. EFG’s core banking and most of the peripheral applications will be retained, though some peripheral applications will be “cherry picked” from the BSI platform and integrated into the upgraded EFG platform

The IT/Operations platform integration and migration project will run from Q2 2016 until Q4 2018 and expected to cost CHF 80m

IT/Operations cost evolution target2

2015 Actuals

EFG platform is stable, flexible, has a lower cost of ownership, and has spare capacity

BSI 66.7%

EFG 33.3%

EFG 58%

2016 Estimate

2017 Estimate

2018 Estimate

EFG 71%

2019 Estimate

70% of synergies realised

after migration

100% of synergies realised

after optimisation

c.170m

c.140m

(1) BSI 66.7%

EFG 33.3%

BSI 66.7%

EFG 33.3%

BSI 159.7m

EFG 80.3 m

CHFm

c.240m

c.240m

c.240m

1 Excludes project costs (CHF 80m project cost included in overall integration costs) 2 Excluding cost associated with premises


IT/Operations – Key path to deliverables

Target Platform Design

IT/Ops Project Team Mobilisation

BSI Migration

New Platform Optimisation

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Project to be delivered by a joint EFG & BSI team combined with specialist consultants who will be integrated into existing IT teams

Comments

Application mapping & gap analysis (with BSI team) Technical architecture and capacity planning Design future state operating model

Resource integration into core EFG IT teams1

Additional project and change management staff Partnership with key platform vendors

Migrate BSI business on to EFG platform Will be phased by booking centre from Q1 2017

(smaller entities) through to end 2017

Resolve post-migration teething issues Improve overall STP and automation Realise remaining headcount synergies

2016 2017 2018

Planning Migration

EFG Platform Preparation

Accelerate already planned projects Build additional functionality and new locations Prepare infrastructure for additional volume

1 To include existing BSI IT project resources (post-closing)


IT Platform – Gap Analysis

Panama

Patrimony (UHNWI)

The platform gap is much smaller than with comparable Private Banking M&A transactions; BSI and EFG both have centralised IT Platforms, offer similar products and services, and have a similar geographic footprint

Panama and Patrimony will be new database ‘instances’ on the EFG core banking platform. This has been done multiple times with previous EFG acquisitions and the architecture to achieve this is proven

Booking Centres

Product

Business Segments

Mass-affluent / retail offering in Ticino

Commercial Banking (Trade Finance)

Securities Lending

FX Market Making / Trading Risk

Structured Products Generation

EFG’s core banking platform has a securities lending capability that is currently unused that will be tested and enhanced as needed

Existing BSI FX market making and structured products applications will be retained and bolted on to the EFG core banking platform

EFG’s platform has the capacity and scale to deal with retail volumes. Improvements will be made to payments and credit admin workflow

EFG’s core banking platform has commercial / trade finance modules (from Banque de Depots heritage), that will be re-tested and enhanced

Approach to fill the gaps Main gaps


~7

~27

~54 ~67

~4

~15

~15

~15

Estimated revenue attrition

Potential attrition and tax regularisation impact of around 5-10% of combined AuM1 in the first three years, revenue margins of approx. 70 bps with related cost impact of 25%

Estimated revenue loss of ~CHF 15m from exit of businesses (not AuM related)

Potential PBT (profit before tax) loss of ~CHF 60 -105m Conservative Approach No growth factored in

Positive NNM will mitigate the impact from AuM attrition

No cost reduction assumed in relation to the ~CHF 15m revenue loss from exit of businesses

In addition, revenue synergies are targeted from the enhanced geographic and CRO platform along with an integrated credit, products and trading set-up. These synergies are currently not factored into the estimates and present an upside potential

Potential PBT loss (in CHF m)2

2016 2017 2018 2019

1 Including impact of exit of some business and review of the perimeter. 2 Based on 7.5% attrition rate

~10

~42

~69

~82

PBT loss due to AuM attrition Revenue loss due to exit of businesses (100% phased-in from 2017)

12.9 2.6 7.7 12.9

Cumulative AuM attrition post closing (CHF bn)2


200

53

80

30 10

35

45 200

53 253

IT HR Regulatory & compliance alignmentTransaction costsConsultants, contingency and othersBorne by EFG Borne by BTG Total integration costs

100%

Breakdown of estimated transaction and integration costs

IT HR Transaction costs

Regulatory & compliance alignment

Costs borne by EFG

40%

Consultants, contingency &

Others

15% 5% 18% 23%

Total integration costs

Costs borne by BTG Pactual

Costs related to migration of BSI onto EFG platform

Cost related to adoption of the HR / Social plan

Investments in compliance framework

Incl. migration related costs, BSI retention

plan

As % of costs borne by EFG CHF m

Estimated transaction and integration costs are equivalent to 1.3x synergies – in middle of benchmark range of 1-1.5x


~(9) ~(12)

~50

~85

Net synergies of ~CHF 85m

Estimated one-off implementation costs of ~CHF 200m which are expected to be phased over 2016 – 2018 35% in 2016, 50% in 2017 and 15% in 2018

Estimated post tax synergies (based on a 7.5% attrition rate

and 17.5% tax rate), expected to be ~CHF 85m

Transaction is expected to be EPS accretive (excluding restructuring costs) in 2018, with double digit accretion in 2019

Estimated post-tax synergies (in CHF m)1

2016 2017 2018 2019

1 Based on 7.5% attrition rate


6.7 5.4

1.4 1.3

2.0

1.3

2014 2015

Credit Operational Market & counterparty

23% 23% 26% 28%

38% 43%

Pee

r 1

EFG

Pee

r 2

Pee

r 3 BS

I

Pee

r 4

Potential for substantial RWA optimisation at BSI

BSI’s RWA evolution (in CHF bn)

BSI’s RWA / Assets ratio stands at 38%, above peers and EFG - highlighting potential for RWA optimisation

Experience at EFG of educating CRO’s of regulatory capital impacts of different collateral values of securities for lombard loans has helped manage RWA growth

10.1

8.1

RWA / Assets across peers 1

1 Latest available data

BSI’s RWAs are based on standard approach


Integration Steps

Integration workstreams and priorities Project organisation


Planned merger and integration work-streams

Legal (closely linked to ‘Closing’)

Strategy/Organization (including Markets/Products)

IT / Operations

Branding / Marketing

Phase 0: Preparation

Phase 1: PMI concept

Phase 2: Merger and customer migration

Announcement of merger

“One face to the regulator”

“One face to the customer”

“One bank for back-office processes ”

D0 (Signing): 22 Feb

D1 (Closing): Q4 2016

D2: Q1 2017 D3: Q4 2017

1

2

4

3


For each work-stream, defined key priorities until closing

Legal

Strategy/

Organization

IT/

Operations

Branding/ Marketing

Work-stream Key priorities until closing

Approval process Future group tax and corporate structure Alignment of contracts, forms, etc.

Alignment of key policies, strategies and optimisation of RWA Detailed synergy implementation timeline Retention of Clients, CROs and Staff Target markets coverage (e.g. legal entities, booking centers) Target product offering Blueprint new organization chart

Target platform selection (DONE) Migration roadmap to target platform Product, service and price harmonization Target MIS / Accounting system

Customers & employees communication on integration process Start new marketing and sponsoring, branding concept

1

2

4

3

PMI key priorities

Overall integration roadmap

Integration Governance

Baseline definition

+


Integration project organisation

Legal

Senior Legal Counsel External Advisers

IT / Operations Branding / Marketing Strategy / Organization

Integration Committee J. Straehle, G. Pradelli, P. Fischer, P. Zbinden

S. Coduri, R. Santi, G. Robert, R. Cohn

Integration Office (PMO)

P. Fischer C. Flemming / S. Mohorovic

1 2 4 3

Business unit heads External Advisers

CFO of EFG COO of EFG Head of Banking Platform at BSI

Head of Marketing at EFG and BSI External Advisers


Integration machine already up and running

Defined detailed Integration Project Organization and Governance

Held first joint meetings of all key executives involved in the integration

Completed the key staffing of most working groups

Held the kick-off for key working groups

Agreed on key milestones going forward for each working group

Established clear rules of engagement


Conclusion


Merger milestones and priorities

Plan merger and integrate … …

Phase 0: Preparation

Phase 1: PMI concept

Phase 2: Merger and customer migration

Announcement of merger

“One face to the regulator”

“One face to the customer”

“One bank for back-office processes ”

D0 (Signing): 22 Feb

D1 (Closing): Q4 2016

D2: Q1 2017 D3: Q4 2017

Run the bank A

Close transaction B

C


Potential risk / concern

? Different cultures

Heritage to be maintained

Complementary business - no EFG presence in Ticino

BSI’s CROs to leverage on EFG’s entrepreneurial model

Many BSI and EFG CROs have common background

Mitigants

? Execution risk / Delivery of estimated synergies

Only cost synergies targeted

IT / Ops constitute 59% of targeted cost synergies

COO of EFG and Head of Banking Platform at BSI have extensive experience in migration projects

? Risk of key people leaving Retention packages

CROs to benefit from large scale and global reach

CROs prefer a stable organisation

? CRO model BSI’s CROs have similar portfolio size and profile as compared to EFG’s CROs

Any change required will only be gradually implemented

We are aware of the key risks and are already working to mitigate them


Potential risk / concern Mitigants

? Financing risk Assured deal certainty even if market conditions do not allow capital raising, owing to commitments from EFG Group and BTG Pactual

? Limited integration experience EFG and BSI have completed several integrations in the past

Management team has extensive integration experience

Additional support from external consultants

? Asset retention

Clients will prefer the stability of the stronger organisation

Proactive client interaction, support and service

Significant initiatives in progress to retain CROs

We are aware of the key risks and are already working to mitigate them

Remain key focus of management

Board oversight will ensure focus is not lost ? Still need to run the bank


Key conclusions

Combination will create New leading Swiss Private Bank With Global reach Entrepreneurial and solution driven

Compelling strategic rationale of the transaction Improve EFG’s competitive position Attractive for clients, employees, CROs and shareholders Strong combined position in Switzerland and Europe / UK; doubling AuM in key growth markets Asia and Latin

America

Strong financial fit with significant potential for cost synergies Highly complementary financial profiles Significant potential for economies of scale and cost synergies Enhanced growth prospects BSI’s CROs have similar portfolio size and profile as compared to EFG’s CROs

Dedicated integration team and well-designed process to ensure successful integration Integration will be delivered by a joint force of EFG and BSI teams, combined with external advisers' expertise


Q&A


Appendix


Extensive track record of integration for both organisations

2003 EFG acquired BanSabadell Finance

2005 EFG acquired DLFA Dresdner LatAm Fin. Advisors

2006 BSI acquired Banca Unione di Credito

2008 BSI acquired Banca del Gottardo

2003 EFG acquired Banque Edouard Constant

2004 EFG acquired Banco Atlantico Gibaltar

2005 EFG acquired Banco Sabadell Bahamas

2006 EFG acquired Banque Monégasque de Gestion

CMA and Marble Bar Asset Management representing diversification outside of pure private banking business and therefore not integrated

2014 EFG acquired Falcon PB (Hong Kong) as part of an asset deal


BSI – Income statement (IFRS)

(in CHF million) 2014 2015

Net interest income 196.7 187.7

Net banking fee & commission income 512.9 454.8

Net other income 146.0 199.2

Operating income 855.6 841.8

Personnel expenses (194.3) (385.2)

Other operating expenses (285.5) (226.9)

Depreciation of property and equipment (17.3) (13.7)

Amortisation of intangible assets (23.3) (26.3)

Total operating expenses (520.4) (652.1)

Increase in and release of provisions (163.7) (7.5)

Impairment losses and reversal of impairment losses on loans and advances to customers (3.9) (19.3)

Profit before tax 167.5 162.9

Income tax expense (58.0) (34.1)

Net profit 109.5 128.8

Non-controlling interest 0.0 0.0

Net profit attributable to ordinary shareholders 109.5 128.8

Net profit up 18% y/y

Pressure on net interest and commission income offset by improvement in other income

Operating expenses in 2014 impacted by past service cost pension plan amendment of CHF 235m



BSI – Balance sheet (IFRS)

Well capitalised balance sheet with CET1 ratio of c.22%

Liquid balance sheet with cash & treasury bills making c.24% of total assets

LCR ratio of 150%, well above minimum requirements

5% y/y growth in tangible equity in 2015

(in CHF million) 2014 2015 Cash and balances with central banks 2,979.0 3,671.5 Treasury bills and other eligible bills 2,344.8 1,480.0 Due from other banks 2,811.9 2,172.8 Loans and advances to customers 11,665.1 10,422.7 Derivative financial instruments 691.7 307.2 Financial assets - trading assets 1,448.1 1,139.7 Financial investment - available-for-sale 1,477.9 1,302.0 Investment in associates 38.9 4.5 Intangible assets 139.6 127.7 Property and equipment 232.5 224.3 Current income tax receivable 1.3 8.4 Deferred income tax assets 69.5 85.7 Other assets 123.4 107.0 Total assets 24,023.7 21,053.5

Due to other banks 740.8 275.2 Due to customers 19,429.1 17,587.0 Subordinated loans 99.0 99.5 Debt issued 0.0 0.0 Derivative financial instruments 738.4 338.6 Financial liabilities designated at fair value 638.5 505.8 Current income tax liabilities 17.3 24.1 Deferred income tax liabilities 0.5 0.8 Provisions 277.9 54.4 Other liabilities 661.3 691.0 Total liabilities 22,602.8 19,576.3

Share capital 1,840.0 1,840.0 Share premium 145.2 145.2 Other reserves and retained earnings (564.4) (508.0) Non-controlling interests 0.0 0.0 Total equity 1,420.9 1,477.1 Total equity and liabilities 24,023.7 21,053.5

Basel III CET1 ratio (Basel III fully phased-in)1 16.30% 21.90% Basel III Total capital ratio (Basel III fully phased-in)1 17.10% 22.80% Liquidity coverage ratio (LCR) n.a. 144% Leverage ratio (FINMA) 6.0% 7.6% Net stable funding ratio (NSFR) n.a. 137% Total RWA, CHF m2 10,068.5 8,052.3

1 Regulatory capital reported to FINMA under Swiss GAAP 2 Credit RWA are based on standard approach Source: Unaudited IFRS financials


Client offering Services

Private banking & wealth management

Discretionary mandates Asset management mandates (e.g.

Abscluta, etc.) Personalised mandates (e.g. Exclusiva,

etc.)

Execution only Securities trading FX, equities, fixed income, options, commodities, mutual funds 24h FX execution capabilities

Asset management products Long only funds Structured products Fund of hedge funds

Investment advisory Active advisory Strategic advisory

Patrimony 1873 Family office Tailored service for UHNWIs with

dedicated specialists

Other Financial planning Trust services

Universal life insurance Pension products

Lombard loans Residential and commercial mortgages

Bank guarantee Trade finance Lending offered to PB clients

Basic banking Corporate finance

Art advisory Capital Markets Other services

Family office Personal banking

BSI product offering

Custody Services


Client offering Services

Private banking & wealth management

Discretionary mandates Management of discretionary portfolios by EFG

Asset Management including traditional equity or fixed income mandates as well as multi-asset strategies

Execution only FX, equities, fixed income, derivatives, commodities, mutual

funds Direct access offering to key clients

Asset management products New Capital funds, managed by EFG

Asset Management Broad range of third party products and

funds

Investment advisory Advisory services giving clients full access to investment

management expertise while level of control maintained can be decided by the client

Sales trading

Other Wealth solutions UHNW Solutions

Lombard loans Mortgage loans

Bank guarantees Lending offered to PB clients

Brokerage and Trading services Banking services Other services

EFG product offering

Structured Products Advanced platform to issue EFG structured products Product generation on the back of EFGAM convictions /themes or

client specific requests Broad range of third party products

Trust services Fund services



Zurich, 31 March 2016

7. Comunicato FINMA – BSI per 1MDB (24.05.2016)

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Comunicato stampa

Data: 24 maggio 2016 Embargo: ---

BSI viola gravemente le disposizioni in materia di riciclaggio di denaro In ragione delle relazioni d’affari intrattenute e delle transazioni effettuate nell’ambito dell’affare di corruzione del fondo sovrano malese 1MDB, BSI SA ha violato gravemente le disposizioni legali in materia di riciclaggio di denaro e il requisito dell’irreprensibilità. È quanto è emerso dal procedimento di enforcement condotto dall’Autorità federale di vigilanza sui mercati finanziari FINMA. Nel caso del fondo 1MDB, la banca ha effettuato, nell’arco di diversi anni, molteplici transazioni considerevoli finalizzate a scopi non trasparenti e, nonostante i sospetti manifesti, non ne ha accertato i retroscena. Oltre ad altri provvedimenti adottati, la FINMA confisca un importo di CHF 95 milioni. La FINMA avvia procedimenti di enforcement nei confronti di due ex funzionari della banca responsabili. Inoltre, la FINMA comunica di approvare l’integrale acquisizione di BSI da parte di EFG International, alla condizione che BSI venga completamente integrata e successivamente sciolta. Tale acquisizione va considerata positivamente, poiché offre alla clientela e al personale una prospettiva futura.

Nel 2015 la FINMA ha avviato un procedimento di enforcement nei confronti di BSI poiché sussistevano indizi di violazione delle disposizioni legali in materia di riciclaggio di denaro. Tali indizi erano correlati a relazioni d’affari intrattenute e a transazioni effettuate nel contesto del caso di corruzione afferente al fondo sovrano malese 1MDB. La FINMA ha esaminato numerose transazioni, i processi e l’organizzazione del sistema di controllo interno della banca. Il procedimento si è concluso nel maggio 2016. Contestualmente, la FINMA ha concluso un procedimento e ammonito BSI per la condotta assunta nel caso Petrobras. Nel contesto dei medesimi due casi, la FINMA ha svolto accertamenti presso oltre venti banche svizzere e avviato, inoltre, dei procedimenti nei confronti di sei di queste.

1MDB: decisione consapevole del Management

Relativamente al caso 1MDB, il comportamento di BSI è stato particolarmente grave. Le relazioni d’affari correlate al fondo 1MDB sono state ripetutamente discusse dai vertici dirigenziali, in particolare anche dopo che la FINMA, già alla fine del 2013, aveva in maniera indubbia richiamato l’attenzione della banca sui gravi e molteplici rischi connessi a tali relazioni d’affari, ingiungendola a procedere a ulteriori accertamenti. Ciononostante, il consiglio di amministrazione e la direzione della banca hanno consapevolmente e reiteratamente deciso di continuare a intrattenere tali relazioni d’affari, molto

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attrattive dal punto di vista economico, senza che i numerosi ed evidenti indizi fossero adeguatamente chiariti e i rischi stessirilevati.

BSI viola gli obblighi di diligenza nella lotta contro il riciclaggio di denaro

Nell’ambito del procedimento avviato nei confronti di BSI, la FINMA ha constatato gravi mancanze relative alla lotta contro il riciclaggio di denaro. Le ragioni sono un’insufficiente gestione del rischio e l’inefficacia del sistema di controllo interno. La FINMA ha constatato quanto segue.

Nel periodo compreso fra il 2011 e l’aprile 2015 sono state appurate gravi lacune nell’accertamento delle transazioni che comportano un rischio superiore, in particolare nelle relazioni d’affari con persone politicamente esposte (PEP). In questo contesto, l’origine dei valori patrimoniali non è stata sufficientemente chiarita e transazioni sospette dell’ordine di centinaia di milioni di dollari non sono state criticamente analizzate.

La banca ha ripetutamente, in maniera sistematica e per un arco di tempo prolungato violato l’obbligo di allestire la documentazione necessaria relativa alle transazioni che comportano un rischio superiore.

Nel contesto del caso 1MDB, la banca ha intrattenuto relazioni con diversi fondi sovrani esteri, i cui conti erano gestiti e contabilizzati a Singapore, ma anche in Svizzera. Si trattava del più grande e redditizio gruppo di clienti di BSI. Ciò si è conseguentemente riflesso sulla retribuzione dei collaboratori della banca coinvolti.

Le commissioni applicate erano molto elevate rispetto alla media e non usuali sul mercato. I responsabili della banca non hanno analizzato criticamente per quale ragione dei fondi sovrani esteri chiedessero a un istituto specializzato nella clientela privata di eseguire dei servizi destinati a clienti istituzionali e, per questo, versassero delle commissioni eccessivamente elevate e non concluse alle condizioni prevalenti di mercato.

La banca ha insufficientemente monitorato le relazioni da lei intrattenute con un gruppo di clienti con all’incirca 100 conti legati al caso 1MDB. All’interno del gruppo di clienti, come pure verso terzi, sono state effettuate una serie di transazioni senza che la banca avesse prima accertato sufficientemente i retroscena economici.

o Così, per esempio, nel caso di un afflusso di fondi dell’ordine di USD 20 milioni, BSI si è accontentata della spiegazione addotta dal cliente, secondo cui si trattava di un “regalo”. In un altro caso, sono confluiti su un conto più di USD 98 milioni, senza che il retroscena economico fosse stato chiarito.

o La banca ha effettuato transazioni in entrata e in uscita di entità comparabile, benché le spiegazioni e la documentazione contrattuale parzialmente fornite fossero in contrasto con lo scopo dell’impiego dei fondi addotto al momento dell’apertura del conto.

o Spesso le transazioni sono state plausibilizzate in modo generico mediante contratti di prestito, anche se questi ultimi non fornivano una spiegazione esaustiva sui reali retroscena delle transazioni in questione.

o Infine, sono spesso emersi chiari indizi di cosiddette transazioni di passaggio: in un caso, USD 20 milioni sono stati trasferiti internamente alla banca tra diversi conti, per poi essere riversati a favore di un istituto terzo. Questo tipo di transazioni sono

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decisamente a rischio sotto il profilo del riciclaggio di denaro. Ciononostante, la banca ha omesso la documentazione e la plausibilizzazione dei retroscena oppure si è accontentata dell’indicazione che, nel quadro di tali relazioni d’affari, si trattava sempre del medesimo avente diritto economico oppure del fatto che tali transazioni venivano effettuate ”a fini contabili”.

La banca ha effettuato a favore di fondi sovrani esteri transazioni di notevole entità, talvolta dell’ordine di centinaia di milioni, senza che i retroscena fossero stati preventivamente chiariti in maniera adeguata.

o I mezzi del fondo sovrano sono stati molto spesso investiti tramite strutture intermedie appositamente costituite. BSI ha sostenuto la realizzazione di tali strutture intermedie volte a ottenere una maggiore confidenzialità nell’attività di investimento. Alla fine, BSI non era però più in grado di ricostruire come tali mezzi fossero stati impiegati.

o Tale configurazione è stata in parte constatata e discussa internamente alla banca: già nel 2012 un collaboratore informò il suo superiore: “My team is implementing these transactions without really knowing what we are doing and why and I am uncomfortable with this. […] there should be a stronger governance process around all this.” A tale segnalazione interna non è stato tuttavia dato alcun seguito.

Il consulente alla clientela responsabile della gestione di tali relazioni ha dato nell’occhio a più riprese a causa del suo comportamento non cooperativo in questioni di compliance, in particolare per quanto riguarda gli accertamenti insufficienti svolti in merito alle transazioni. I superiori erano a conoscenza di questi fatti, tuttavia non hanno sostenuto l’unità Compliance, bensì il consulente alla clientela. Di conseguenza, il comportamento di quest’ultimo non ha avuto alcuna ripercussione, per esempio, sui bonus percepiti. Al contrario, egli era annoverato fra i collaboratori meglio retribuiti dell’istituto.

Ai clienti importanti, che beneficiavano di una sorta di servizio clienti esclusivo, venivano concesse eccezioni alle disposizioni interne. I dirigenti erano al corrente dei fatti, tuttavia hanno omesso di esaminare adeguatamente tali eccezioni.

Complessivamente, nel periodo in oggetto, i dirigenti del gruppo BSI non hanno sorvegliato in modo adeguato la filiale di BSI a Singapore, nonostante il fatto che i contatti intrattenuti fossero stretti e frequenti e gli organi del gruppo facessero parte del consiglio di amministrazione della filiale.

Conclusioni: Alla luce di quanto esposto, la FINMA giunge alle seguenti conclusioni: le mancanze constatate costituiscono gravi violazioni degli obblighi legali di diligenza in materia di lotta contro il riciclaggio di denaro come pure gravi violazioni del principio di un’adeguata gestione del rischio e di un’adeguata organizzazione. BSI ha così gravemente violato i requisiti per la garanzia di un’attività irreprensibile. Infine, sino ai vertici dirigenziali è venuto meno l’atteggiamento critico necessario per riconoscere, limitare e monitorare i considerevoli rischi giuridici e di reputazione incorsi.

La FINMA confisca gli utili e avvia procedimenti nei confronti di singole persone

Oltre alle misure volte al ripristino della situazione conforme, la FINMA adotta i seguenti provvedimenti:

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Confisca degli utili indebitamente realizzati: la gestione in grave violazione delle disposizioni in materia di vigilanza delle relazioni della clientela ha consentito alla banca di applicare, per tutta la durata dell’inchiesta, commissioni elevate. La FINMA confisca gli utili indebitamente realizzati dell’ordine di CHF 95 milioni. Il denaro confiscato sarà devoluto alla Confederazione.

Accertamento delle responsabilità individuali: la FINMA ha aperto nel maggio 2016 due procedimenti di enforcement nei confronti di due ex funzionari della banca. La FINMA vuole così esaminare il grado di conoscenza, il comportamento e la responsabilità individuale di entrambe gli ex manager in relazione alle violazioni di legge constatate. La FINMA si riserva la facoltà di avviare ulteriori procedimenti.

La FINMA approva la complessiva integrazione di BSI da parte di EFG a determinate condizioni

Contemporaneamente alla conclusione del procedimento, la FINMA approva la complessiva integrazione di BSI da parte di EFG International alla condizione che BSI, entro 12 mesi venga completamente integrata e successivamente sciolta. Nessuno dei garanti dell’irreprensibilità e dei manager di BSI responsabili delle violazioni commesse dalla banca potrà operare in analoghe funzioni in seno a EFG. La FINMA considera detta acquisizione positivamente, poiché la stessa offre alla clientela e al personale una prospettiva futura

Proficua collaborazione con le autorità svizzere ed estere

Le transazioni menzionate sono state effettuate tra banche di diversi paesi e hanno attraversato diversi continenti e piazze finanziarie. Per lo svolgimento delle indagini, la FINMA ha pertanto operato in stretto contatto con altre autorità estere. Particolarmente proficua è stata la cooperazione con l’autorità di vigilanza sui mercati finanziari singaporiana (Monetary Authority of Singapore MAS). Quest’ultima ha effettuato, parallelamente al procedimento condotto dalla FINMA, ispezioni in loco presso la filiale di BSI di Singapore, da cui sono emerse lacune di comparabile tenore nei controlli interni alla banca. La MAS ha informato sulla sua intenzione di procedere di ritirare la licenza bancaria per la filiale di BSI e di infliggere una multa dell’ordine di SGD 13 milioni (ca. CHF 9 milioni). In Svizzera, la FINMA ha coordinato le proprie inchieste con il Ministero pubblico della Confederazione. Quest’ultimo, dal canto suo, ha aperto un procedimento penale nel medesimo contesto contro BSI. La FINMA apprezza anche l’atteggiamento cooperativo dei nuovi organi di BSI nel corso delle indagini.

Contatto

Tobias Lux, portavoce, tel. +41 (0)31 327 91 71, [email protected]

8. Comunicato MAS – BSI per 1MDB (24.05.2016)

MAS directs BSI Bank to shut down in Singapore

Singapore, 24 May 2016…The Monetary Authority of Singapore (MAS) announced today that it has served BSI Bank Limited (BSI Bank) notice of intention to withdraw

its status as a merchant bank in Singapore for serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and

gross misconduct by some of the bank’s staff.

2 In addition, MAS has referred to the Public Prosecutor the names of six members of BSI Bank’s senior management and staff to evaluate whether they have

committed criminal offences.

3 BSI Bank has been operating as a merchant bank in Singapore since November 2005 where it offers private banking services. It is a wholly-owned subsidiary of

BSI SA, a bank founded in 1873 and headquartered in Switzerland.

Assurance for customers of BSI Bank

4 Clients and customers of BSI Bank are assured that the Bank is solvent and has assets in excess of its liabilities and commitments. It also has the full support of its

parent bank, BSI SA, in Switzerland. MAS is working closely with the Swiss Financial Market Supervisory Authority (FINMA), the home regulator of BSI SA, to oversee

an orderly closure of BSI Bank in Singapore.

5 MAS notes that FINMA has approved the acquisition of the entire BSI Group by EFG International, a bank authorised by FINMA and headquartered in Switzerland.

In the interest of the customers of BSI Bank, MAS will allow the transfer of the Singapore subsidiary’s assets and liabilities to the Singapore branch of EFG Bank AG or

to the parent entity, BSI SA.

Withdrawal of merchant bank status

6 In 2011, MAS inspected BSI Bank and found policy and process lapses at the front office and weak enforcement by control functions. The lapses were rectified. In

2014, MAS inspected the bank again and uncovered serious shortcomings in its due diligence checks on assets underlying the investment funds structured for the

bank’s customers. Given repeated findings of weaknesses in its control regime, MAS instructed BSI Bank’s management to increase scrutiny of the bank’s risk

management processes and internal controls. A more intrusive third inspection by MAS in 2015 revealed multiple breaches of anti-money laundering regulations and a

pervasive pattern of non-compliance.

7 MAS’ decision to withdraw BSI Bank’s status as a merchant bank takes into account the repetitive lapses as well as the 2015 inspection findings which revealed:

• widespread control failures which led to numerous serious breaches of various anti-money laundering regulations

• poor and ineffective oversight by the senior management of BSI Bank

• unacceptable risk culture, with blatant disregard for compliance and control requirements as well as MAS’ regulations

• numerous acts of gross misconduct by certain staff

8 Specific regulatory lapses include the processing of multiple unusual transactions which were essentially pass-through trades often without economic substance.

Approvals of such transactions were based purely on faith of client representations despite deficient documentation and concerns raised by the bank’s compliance

officers.

9 This is the first time that MAS is withdrawing its approval for a merchant bank since 1984, when Jardine Fleming (Singapore) Pte Ltd was shut down for serious

lapses in its advisory work.

Referral of BSIS senior management and staff to the Public Prosecutor

10 MAS found considerable evidence of gross dereliction of duty and failure to discharge oversight responsibilities on the part of BSI Bank’s senior management.

Their ineffective governance led to a poor risk culture, which prioritised questionable customer demands ahead of compliance with anti-money laundering regulations

and the bank’s own internal controls.

11 Several of the bank staff also committed wilful acts of misconduct, such as:

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Copyright © 2016 Monetary Authority of Singapore

Last Modified on 24/05/2016

• making material misrepresentations to auditors

• abetting improper valuations of assets; and

• taking instructions from persons other than customers’ authorised representatives on matters relating to customers’ accounts

12 The severe lapses and failings in BSI Bank, which led to MAS’ decision to withdraw the bank’s status as a merchant bank, were the result of the actions or

omissions of these individuals.

13 MAS has referred to the Public Prosecutor the names of the following six members of BSI Bank’s senior management and staff to evaluate whether they have

committed criminal offences:

• Mr Hans Peter Brunner, former CEO

• Mr Raj Sriram, former Deputy CEO

• Mr Kevin Michael Swampillai*, Head of Wealth Management Services

• Mr Yak Yew Chee, former Senior Private Banker

• Mr Yeo Jiawei**, former Wealth Planner; and

• Ms Seah Yew Foong Yvonne, former Senior Private Banker

* Mr Swampillai is currently suspended by the bank.** Mr Yeo is currently in remand and has been charged by the Public Prosecutor for various offences.

Imposition of financial penalties

14 MAS has also served BSI Bank notice to impose financial penalties amounting to $13.3 million for 41 breaches of MAS Notice 1014 - Prevention of Money

Laundering and Countering the Financing of Terrorism. The breaches include failure to perform enhanced customer due diligence on high risk accounts, and to monitor

for suspicious customer transactions on an ongoing basis.

MAS’ expectations of financial institutions

15 MAS requires financial institutions in Singapore to comply strictly with its regulations on anti-money laundering and countering the financing of terrorism. Like all

major international financial and business centres, Singapore faces an inherent risk of being used as a conduit for illicit financial flows. Financial institutions operating in

Singapore are therefore expected to have rigorous systems and processes to thwart this risk, including high standards of vigilance in on-boarding clients and monitoring

transactions.

16 Mr Ravi Menon, Managing Director, MAS, said, “BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial

sector. It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously. Controls need to be robust, surveillance vigilant, and

the management culture must emphasise professional integrity and risk consciousness.”

17 MAS is conducting supervisory reviews of several other financial institutions and bank accounts through which suspicious and unusual transactions have taken

place. MAS will not hesitate to take actions against these institutions if they are found to have breached regulations or fallen short of expectations.

18 Mr Menon said, “MAS is absolutely committed to safeguarding the integrity and reputation of Singapore’s financial centre. On this, there can be no compromise.”

***

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9. Comunicato BSI per 1MDB (24.05.2016)

Press release

The Swiss Financial Market Supervisory Authority (FINMA) approves the combination of BSI with EFG. The Monetary Authority of Singapore (MAS) allows the transfer of the Singapore subsidiary’s assets and liabilities to the Singapore branch of EFG Bank AG. BSI takes note of the announcements by FINMA and MAS in relation to past compliance gaps related to the 1MDB case. Lugano, 24 May 2016 – BSI acknowledges the approvals by the Swiss Financial Market Supervisory Authority (FINMA) of the acquisition of BSI by EFG International. This marks an important milestone to the completion of the transaction that will create one of the largest private banks in Switzerland and provide long-term stability for clients and staff.

The regulatory approval process in other jurisdictions is on track and the transaction is still expected to close at the latest by the fourth quarter of 2016. In the meantime, the integration process with EFG is progressing smoothly. As previously announced, once the transaction closes, BSI will be fully merged and integrated into EFG.

In addition, the Monetary Authority of Singapore (MAS) will be allowing the transfer of the assets and liabilities of BSI Bank Limited (BSI’s Singapore subsidiary) to the Singapore branch of EFG Bank AG. MAS and FINMA are working closely to oversee an orderly transfer. Clients of BSI Bank Limited are assured that both BSI and EFG are working for a fast and smooth transition. The Singapore subsidiary also has the full support of its parent bank, BSI.

With regard to the investigations into 1MDB, arising from activities occurring between 2011 and April 2015, BSI has co-operated fully with both FINMA and MAS. The financial penalties levied by both regulators will be paid from BSI’s General Reserves for Banking Risks. BSI remains well capitalized with excellent liquidity and solvency ratios. In addition, the Bank highlights that it has been continuouslyimproving its risks and compliance culture by implementing a number of actions and remedial measures. The Bank has undertaken significant steps to strengthen management, including the introduction of a new Chief Risk Officer and the appointment of a new Group Legal Counsel both at Group Executive Board level to enhance the overall risk and compliance framework.

BSI acknowledges that these events are important steps with regard to the regulators to resolve legacy issues and removing uncertainty for clients and staff in relation to 1MDB. In relation to today’s announcement by the Office of the Attorney General of Switzerland (OAG), BSI will co-operate to ensure a quick and fair resolution.

Stefano Coduri decides to step down with immediate effect. Roberto Isolani appointed Group CEOStefano Coduri has tendered his resignation as Group CEO with immediate effect. The Board of Directors thanks Stefano Coduri’s for his sense of responsibility and accepts his resignation. The Board of Directors has appointed Roberto Isolani, currently a member of the Board of BSI, as Group CEO. He will be responsible for running the Bank and guaranteeing a smooth integration with EFG.

Contacts

Valeria Montesoro, Head of Institutional Communication & Media Relations, Tel. +41 (0)58 809 39 73, [email protected] Crobu, Deputy Head of Media Relations, Tel. +41 (0)58 809 39 81, [email protected] 1/2

BSI SAEstablished in Lugano in 1873, BSI is one of the oldest Swiss banks and specialises in private wealth management. It provides high net worth individuals, independent asset managers and family offices with a comprehensive range of products and services, from classic to alternative and innovative solutions. BSI ranks among Switzerland's leading private banking groups, with CHF 84.3 billion of Asset under Management or Custody (at 31.12.2015) and about 1,900 FTEs across 18 offices throughout the world. Based in Lugano and with a significant presence in the main financial markets in Europe, Latin America, Middle East and Asia, BSI has a global footprint and is thus in an ideal position to meet the interests and needs of its clients. BSI strives to establish and maintain long-term personal relationships with its clients, offering global asset management services through effective and high-level products as well as customised solutions.

Contacts


10. Comunicato BSI per ricorso FINMA (24.05.2016)

Dichiarazione ai media

BSI presenta ricorso contro la Decisione della FINMA del 23 maggio 2016Lugano, 23/06/2016 – BSI SA (“BSI”) annuncia di aver presentato ricorso presso il Tribunale Amministrativo Federale Svizzero contro la Decisione della FINMA del 23 maggio 2016 avente per oggetto le modalità di gestione delle relazioni d’affari intrattenute da BSI con il fondo sovrano malese 1MDB.

BSI riscontra la presenza di numerosi vizi procedurali che intaccano la decisione della FINMA, rendendo la stessa ingiusta e sproporzionata.

Dall'autunno del 2013 BSI ha mantenuto un dialogo costante e trasparente con la FINMA, proprio in merito alla fattispecie 1MDB ed ai suoi sviluppi. Laddove sono state rilevate carenze, BSI ha adottato e continua ad adottare azioni correttive. Tutti i rapporti relativi a 1MDB sono cessati a inizio del 2015. Pertanto, pur riconoscendo che in passato vi siano anche state lacune interne, BSI ritiene che la decisione della FINMA nonché il tempismo e le modalità di comunicazione siano manifestamente inopportuni.

Nel proprio ricorso, BSI contesta in particolar modo la valutazione dei fatti effettuata dalla FINMA, sostenendo che le sanzioni comminate siano sproporzionate e ingiuste ai sensi delle norme amministrative vigenti. Inoltre le modalità con cui la FINMA ha comunicato la propria decisione hanno arrecato gravi danni alla reputazione della Banca e dei suoi collaboratori.

BSI SAFondata a Lugano nel 1873, BSI SA è una delle più antiche banche elvetiche ed è specializzata nel private wealth management. La Banca offre a high net worth individual, gestori patrimoniali indipendenti e family office una gamma completa di prodotti e servizi che spaziano dalle soluzioni d'investimento classiche a quelle alternative e innovative. BSI è uno dei maggiori gruppi di private banking svizzeri, con CHF 84,3 miliardi di patrimoni in gestione o custodia (al 31.12.2015) e circa 1.900 FTE distribuiti in 18 uffici in tutto il mondo. Con sede a Lugano e una presenza significativa nei principali mercati finanziari in Europa, America Latina, Medio Oriente e Asia, BSI ha un orizzonte globale ed è pertanto in una posizione ideale per soddisfare gli interessi e le esigenze dei propri clienti. BSI si impegna nell'instaurare e intrattenere rapporti personali di lungo periodo con i propri clienti, fornendo servizi di global asset management per mezzo di prodotti efficaci e di alta qualità nonché soluzioni personalizzate.

Contatti


11. Atto d’accusa / Indictment DoJ - 1MDB (20.07.2016)

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M. KENDALL DAY, Chief Asset Forfeiture and Money Laundering Section (AFMLS) MARY BUTLER Chief, International Unit WOO S. LEE Deputy Chief, International Unit KYLE R. FREENY Trial Attorney Criminal Division United States Department of Justice 1400 New York Avenue, N.W., 10th Floor Washington, D.C. 20530 Telephone: (202) 514-1263 Email: [email protected]

EILEEN M. DECKER United States Attorney LAWRENCE S. MIDDLETON Assistant United States Attorney Chief, Criminal Division STEVEN R. WELK Assistant United States Attorney Chief, Asset Forfeiture Section JOHN J. KUCERA (CBN: 274184) CHRISTEN A. SPROULE (CBN: 310120) Assistant United States Attorneys Asset Forfeiture Section 312 North Spring Street, 14th Floor Los Angeles, California 90012 Telephone: (213) 894-3391/(213) 894-4493 Facsimile: (213) 894-7177 Email: [email protected] [email protected]

Attorneys for Plaintiff UNITED STATES OF AMERICA

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

“THE WOLF OF WALL STREET” MOTION PICTURE, INCLUDING ANY RIGHTS TO PROFITS, ROYALTIES AND DISTRIBUTION PROCEEDS

No. CV 16-16-5362

VERIFIED COMPLAINT FORFORFEITUREIN REM

18 U.S.C. §§ 981(a)(1)(A) & (C)

[F.B.I.]

Case 2:16-cv-05362 Document 1 Filed 07/20/16 Page 1 of 136 Page ID #:1

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OWED TO RED GRANITE PICTURES, INC. OR ITS AFFILIATES AND/OR ASSIGNS,

Defendant.

The United States of America brings this complaint against the above-captioned

asset and alleges as follows:

PERSONS AND ENTITIES

1. The plaintiff is the United States of America.

2. The defendant in this action is “The Wolf of Wall Street” Motion Picture,

Including any Rights to Profits, Royalties and Distribution Proceeds owed to Red

Granite Pictures, Inc. or its Affiliates and/or Assigns, (hereinafter, the “Defendant

Asset”), more particularly described in Attachment A.

3. The Defendant Asset is held by Red Granite Pictures, Inc. The persons and

entities whose interests may be affected by this action are listed in Attachment A.

4. Contemporaneously with the filing of this complaint, plaintiff is filing

related actions seeking the civil forfeiture of the following assets (collectively, the

“SUBJECT ASSETS”):

a. THE L’ERMITAGE PROPERTY: All right and title to the real

property commonly known as 9291 Burton Way, Beverly Hills, California 90210,

including the L’Ermitage Hotel (“L’ERMITAGE PROPERTY”), including all

appurtenances, improvements, and attachments thereon.

b. THE L’ERMITAGE BUSINESS ASSETS: All assets related to

the L’ERMITAGE PROPERTY, including but not limited to all chattels and intangible

assets, inventory, and equipment (“L’ERMITAGE BUSINESS ASSETS”), including

any and all funds in accounts owned, held or maintained at financial institutions by

LBH Real Estate, or for the benefit of LBH Real Estate or the L’ERMITAGE


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PROPERTY, and all leases, rents, and profits derived from said business. Collectively

herein, the L’ERMITAGE PROPERTY and the L’ERMITAGE BUSINESS ASSETS

are referred to as, “L’ERMITAGE.”

c. HILLCREST PROPERTY 1: All right and title to the real property

located in Beverly Hills, California1 owned by 912 North Hillcrest Road (BH), LLC

(“HILLCREST PROPERTY 1”), including all appurtenances, improvements, and

attachments thereon, as well as all leases, rents, and profits derived therefrom.

d. PARK LAUREL CONDOMINIUM: All right and title to the real

property located in New York, New York owned by Park Laurel Acquisition LLC

(“PARK LAUREL CONDOMINIUM”), including all appurtenances, improvements,

and attachments thereon, as well as all leases, rents, and profits derived therefrom.

e. BOMBARDIER JET: All right and title to Bombardier Global

5000 aircraft bearing manufacturer serial number 9265 and registration number

N689WM, with two Rolls Royce engines bearing manufacturer’s serial numbers 12487

and 12488 (“BOMBADIER JET”), including all appurtenances, improvements, and

attachments thereon, all aircraft logbooks, and all leases, rents, and profits derived

therefrom.

f. TIME WARNER PENTHOUSE: All right and title to the real

property located in New York, New York owned by 80 Columbus Circle (NYC) LLC

(“TIME WARNER PENTHOUSE”), including all appurtenances, improvements, and

attachments thereon, as well as all leases, rents, and profits derived therefrom. The

TIME WARNER PENTHOUSE includes all right and title to the real property

commonly known as SU-11, New York, New York (“TIME WARNER STORAGE

UNIT”), including all appurtenances, improvements, and attachments thereon, as well

as all leases, rents, and profits derived therefrom.

1 Pursuant to L.R. 5.2-1, residential addresses are listed by the city and state only.


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g. ORIOLE MANSION: All right and title to the real property located

in Los Angeles, California owned by Oriole Drive (LA) LLC (“ORIOLE MANSION”),

including all appurtenances, improvements, and attachments thereon, as well as all

leases, rents, and profits derived therefrom.

h. GREENE CONDOMINIUM: All right and title to the real property

located in New York, New York owned by 118 Greene Street (NYC) LLC (“GREENE

CONDOMINIUM”), including all appurtenances, improvements, and attachments

thereon, as well as all leases, rents, and profits derived therefrom.

i. EMI ASSETS: Any and all rights, including copyright and

intellectual property rights, as well as the right to collect and receive any profits,

royalties, and proceeds of distribution owned by or owed to JW Nile (BVI), Ltd.; JCL

Media (EMI Publishing Ltd.); and/or Jynwel Capital Ltd., relating to EMI Music

Publishing Group North America Holdings, Inc. and D.H. Publishing L.P.

j. SYMPHONY CP (PARK LANE) LLC ASSETS: All right to and

interest in Symphony CP (Park Lane) LLC, a Delaware limited liability company,

owned, held or acquired, directly or indirectly, by Symphony CP Investments LLC and

Symphony CP Investments Holdings LLC, including but not limited to any interest in

the real property and appurtenances located at 36 Central Park South, New York, New

York, 10019, known as the Park Lane Hotel, any right to collect and receive any profits

and proceeds therefrom, and any interest derived from the proceeds invested in

Symphony CP (Park Lane) LLC by Symphony CP Investments LLC or Symphony CP

Investments Holdings.

k. WALKER TOWER PENTHOUSE: All right and title to the

property located in New York, New York owned by 212 West 18th Street LLC

(“WALKER TOWER PENTHOUSE”), including all appurtenances, improvements, and

attachments thereon, as well as all leases, rents, and profits derived therefrom.

l. LAUREL BEVERLY HILLS MANSION: All right and title to the

property located in Beverly Hills, California, owned by Laurel Beverly Hills Holdings,


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LLC (“LAUREL BEVERLY HILLS MANSION”), including all appurtenances,

improvements, and attachments thereon, as well as all leases, rents, and profits derived

therefrom.

m. HILLCREST PROPERTY 2: All right and title to the property

located in Beverly Hills, California owned by 1169 Hillcrest Road LLC (“HILLCREST

PROPERTY 2”), including all appurtenances, improvements, and attachments thereon,

as well as all leases, rents, and profits derived therefrom.

n. VAN GOGH ARTWORK: One pen and ink drawing entitled La

maison de Vincent a Arles by Vincent Van Gogh.

o. SAINT GEORGES PAINTING: One painting entitled “Saint-

Georges Majeur” by Claude Monet.

p. NYMPHEAS PAINTING: One painting entitled “Nympheas avec

Reflets de Hautes Herbes” by Claude Monet.

q. THE QENTAS TOWNHOUSE: All right and title to the property

located in London, United Kingdom (“U.K.”), SW1W 0JR, owned by Qentas Holdings

Limited (the “QENTAS TOWNHOUSE”), including all appurtenances, improvements,

and attachments thereon, as well as all leases, rents, and profits derived therefrom.

QENTAS TOWNHOUSE includes all right, title, and interest in the leasehold for

Parking Space 2 at the QENTAS TOWNHOUSE, as well as all sub-leases, rents, and

profits derived therefrom. According to a search of the Land Registry conducted by the

U.K. National Crime Agency (“NCA”), title to QENTAS TOWNHOUSE is held in the

name of Qentas Holdings Limited, and there are no recorded liens against the property.

NATURE OF THE ACTION

5. This is a civil action in rem to forfeit assets involved in and traceable to an

international conspiracy to launder money misappropriated from 1Malaysia

Development Berhad (“1MDB”), a strategic investment and development company


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wholly-owned by the government of Malaysia.2 The United States seeks forfeiture of

property located in the United States and abroad, including in the United Kingdom and

Switzerland, pursuant to 18 U.S.C. § 981(a)(1)(C), on the ground that it was derived

from violations of U.S. law, and pursuant to 18 U.S.C. § 981(a)(1)(A) on the ground that

it is property involved in one or more money laundering offenses in violation of 18

U.S.C. §§ 1956 and/or 1957.

6. 1MDB was ostensibly created to pursue investment and development

projects for the economic benefit of Malaysia and its people, primarily relying on the

issuance of various debt securities to fund these projects. However, over the course of

an approximately four-year period, between approximately 2009 and at least 2013,

multiple individuals, including public officials and their associates, conspired to

fraudulently divert billions of dollars from 1MDB through various means, including by

defrauding foreign banks and by sending foreign wire communications in furtherance of

the scheme, and thereafter, to launder the proceeds of that criminal conduct, including in

and through U.S. financial institutions. The funds diverted from 1MDB were used 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. 1MDB

maintained no interest in these assets and saw no returns on these investments.

7. The criminal conduct alleged herein occurred in three principal phases:

8. The “Good Star” Phase: The fraudulent diversion of funds from 1MDB

began in approximately September 2009, soon after 1MDB’s creation. Between 2009

and 2011, under the pretense of investing in a joint venture between 1MDB and

PetroSaudi International (“PetroSaudi” or “PSI”), a private Saudi oil extraction

company, officials of 1MDB and others arranged for the fraudulent transfer of more than

2 Malaysia is a sovereign country located in Southeast Asia.


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$1 billion from 1MDB to a Swiss bank account held in the name of Good Star Limited

(“Good Star Account”). Officials at 1MDB caused this diversion of funds by, among

other things, providing false information to banks about the ownership of the Good Star

Account. Contrary to representations made by 1MDB officials, the Good Star Account

was beneficially owned not by PetroSaudi or the joint venture, but by LOW Taek Jho,

a/k/a Jho Low (“LOW”), a Malaysian national who had no formal position with 1MDB

but was involved in its creation. LOW laundered more than $400 million of the funds

misappropriated from 1MDB through the Good Star Account into the United States, after

which these funds were used for the personal gratification of LOW and his associates.3

9. The “Aabar-BVI” Phase: In 2012, 1MDB officials and others

misappropriated and fraudulently diverted a substantial portion of the proceeds that

1MDB raised through two separate bond offerings arranged and underwritten by

Goldman Sachs International (“Goldman”). The bonds were guaranteed by both 1MDB

and the International Petroleum Investment Company (“IPIC”), an investment fund

wholly-owned by the government of Abu Dhabi, in the United Arab Emirates

(“U.A.E.”).4 Beginning almost immediately after 1MDB received the proceeds of each

of these two bond issues, 1MDB officials caused a substantial portion of the proceeds –

approximately $1.367 billion, a sum equivalent to more than forty percent of the total net

proceeds raised – to be wire transferred to a Swiss bank account belonging to a British

Virgin Islands entity called Aabar Investments PJS Limited (“Aabar-BVI”).

10. Aabar-BVI was created and named to give the impression that it was

associated with Aabar Investments PJS (“Aabar”), a subsidiary of IPIC incorporated in

Abu Dhabi. In reality, Aabar-BVI has no genuine affiliation with Aabar or IPIC, and the

Swiss bank account belonging to Aabar-BVI (“Aabar-BVI Swiss Account”) was used to

3 All amounts referenced in dollars ($) are denominated in U.S. dollars and all dates, times, and monetary amounts are approximate.

4 The United Arab Emirates is a sovereign nation in the Arabian Peninsula, comprising seven separate emirates, including the Emirate of Abu Dhabi (“Abu Dhabi”).


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siphon off proceeds of the 2012 bond sales for the personal benefit of officials at IPIC,

Aabar, and 1MDB and their associates. Funds diverted through the Aabar-BVI Swiss

Account were transferred to, among other places, a Singapore bank account controlled

by TAN Kim Loong, a/k/a Eric Tan (“TAN”), an associate of LOW. Those funds were

thereafter distributed for the personal benefit of various individuals, including officials at

1MDB, IPIC, or Aabar, rather than for the benefit of 1MDB, IPIC, or Aabar.

11. The “Tanore” Phase: In 2013, several individuals, including 1MDB

officials, diverted more than $1.26 billion out of a total of $3 billion in principal that

1MDB raised through a third bond offering arranged by Goldman in March 2013. The

proceeds of this bond offering were to be used by 1MDB to fund a joint venture with

Aabar known as the Abu Dhabi Malaysia Investment Company (“ADMIC”). However,

beginning days after the bond sale, a significant portion of the proceeds was instead

diverted to a bank account in Singapore held by Tanore Finance Corporation (“Tanore

Account”), for which TAN was the recorded beneficial owner. Although the Tanore

Account had no legitimate connection to 1MDB, the then-Executive Director of 1MDB

was an authorized signatory on the account. 1MDB funds transferred into the Tanore

Account were used for the personal benefit of LOW and his associates, including

officials at 1MDB, rather than for the benefit of 1MDB or ADMIC.

12. The proceeds of each of these three phases of criminal conduct were

laundered through a complex series of transactions, including through bank accounts in

Singapore, Switzerland, Luxembourg, and the United States.

13. Numerous assets, including the DEFENDANT ASSET, were acquired with

funds unlawfully diverted from 1MDB, or funds traceable thereto. As a result, the

DEFENDANT ASSET is subject to forfeiture to the United States pursuant to 18 U.S.C.

§ 981(a)(1)(A), because it is property involved in one or more money laundering

transactions in violation of 18 U.S.C. §§ 1956 and/or 1957, and 18 U.S.C. § 981(a)(1)(C)

because it is property constituting or derived from proceeds traceable to one or more


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violations of U.S. law defined as a specified unlawful activity in 18 U.S.C. §§ 1956(c)(7)

and/or 1961(1).

JURISDICTION AND VENUE

14. This is a civil forfeiture action brought pursuant to 18 U.S.C. § 981(a)(1)(A)

and (C).

15. This Court has jurisdiction over this action pursuant to 28 U.S.C. §§ 1345

and 1355.

16. Venue lies in this district pursuant to 28 U.S.C. §§ 1355(b)(1)(A) and

1355(b)(2) because acts and omissions giving rise to the forfeiture took place in the

Central District of California, and/or pursuant to 28 U.S.C. § 1395(b), because the

Defendant Asset is located in the Central District of California.

BACKGROUND: RELEVANT INDIVIDUALS AND ENTITIES

17. 1Malaysia Development Berhad (“1MDB”) is a strategic investment and

development company wholly-owned by the Malaysian government, through the

Malaysian Ministry of Finance. It was formed in 2009 when the Malaysian government

took control of a municipal entity called Terengganu Investment Authority (“TIA”).

1MDB’s governance structure has been comprised of a senior leadership team, a Board

of Directors (“1MDB Board of Directors” or “1MDB Board”), and a Board of Advisors.

18. PetroSaudi International Ltd. (“PetroSaudi” or “PSI”) is a private Saudi

Arabia-based oil services company incorporated in Saudi Arabia, which maintains

offices in the United Kingdom.

19. 1MDB PetroSaudi, Ltd. was a purported joint venture between 1MDB and

PetroSaudi formed in or around September 2009 for the stated purpose of exploiting

certain energy concessions PetroSaudi purportedly owned in Turkmenistan and

Argentina.


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20. International Petroleum Investment Company (“IPIC”) is an investment

entity wholly-owned by the Abu Dhabi government. Its management is comprised of a

Chairman, Deputy Chairman, Board of Directors, and Managing Director.

21. Aabar Investments PJS (“Aabar”) is a public joint stock company

incorporated under the laws of Abu Dhabi and a subsidiary of IPIC.

22. Aabar Investments PJS Ltd. (“Aabar BVI”) is an entity incorporated in

the British Virgin Islands in March 2012 that was purported to be owned by IPIC and

Aabar. Aabar-BVI maintained a bank account at BSI Bank in Switzerland. IPIC and

Aabar recently clarified that Aabar-BVI is not their affiliate.

23. Abu Dhabi Malaysia Investment Company (“ADMIC”) is a purported

joint venture between 1MDB and Aabar that was created in or around March 2013 for

the stated purpose of promoting the growth and development of Malaysia and Abu

Dhabi.

24. LOW Taek Jho, a/k/a/ Jho Low (“LOW”) is a Malaysian national who

advised on the creation of TIA, 1MDB’s predecessor. LOW has never held a formal

position at 1MDB, and he has publicly denied any involvement with 1MDB after its

inception.

25. 1MDB OFFICER 1 is a Malaysian national who served as the Executive

Director of 1MDB from the time of its creation until approximately March 2011. During

this time, 1MDB OFFICER 1 was a “public official” as that term is used in 18 U.S.C.

§ 1956(c)(7)(B)(iv) and a “public servant” as that term is used in Section 21 of the

Malaysian Penal Code.

26. 1MDB OFFICER 2 is a Malaysian national who served as 1MDB’s Chief

Executive Officer (“CEO”) between at least 2009 and 2013. During this time, 1MDB

OFFICER 2 was a “public official” as that term is used in 18 U.S.C. § 1956(c)(7)(B)(iv)

and a “public servant” as that term is used in Section 21 of the Malaysian Penal Code.

27. 1MDB OFFICER 3 is Malaysian national who served as 1MDB’s General

Counsel and Executive Director of Group Strategy during, at a minimum, 2012 and


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2013. 1MDB OFFICER 3 was a main point of contact between 1MDB and Goldman in

connection with the three Goldman-underwritten bond offerings in 2012 and 2013.

During this time, 1MDB OFFICER 3 was a “public official” as that term is used in 18

U.S.C. § 1956(c)(7)(B)(iv) and a “public servant” as that term is used in Section 21 of

the Malaysian Penal Code.

28. MALAYSIAN OFFICIAL 1 is a high-ranking official in the Malaysian

government who also held a position of authority with 1MDB. During all times relevant

to the Complaint, MALAYSIAN OFFICIAL 1 was a “public official” as that term is

used in 18 U.S.C. § 1956(c)(7)(B)(iv) and a “public servant” as that term is used in

Section 21 of the Malaysian Penal Code.

29. Riza Shahriz Bin Abdul AZIZ (“AZIZ”), a Malaysian national, is a

relative of MALAYSIAN OFFICIAL 1 and a friend of LOW. He co-founded Red

Granite Pictures, a Hollywood movie production and distribution studio, in 2010.

30. “Eric” TAN Kim Loong (“TAN”) is a Malaysian national and an associate

of LOW. He was the stated beneficial owner of several bank accounts into which

misappropriated 1MDB funds were transferred.

31. Khadem Abdulla Al QUBAISI (“QUBAISI”), a U.A.E. national, was the

Managing Director of IPIC from 2007 to 2015 and the Chairman of Aabar in at least

2012 and 2013. During this time, he was a “public official” as that term is used in 18

U.S.C. § 1956(c)(7)(B)(iv) and a “public official” as that term is used in Article(5) of

United Arab Emirates Law, Federal Law No (3) Of 1989 On Issuance Of The Penal

Code. QUBAISI also was a director of Aabar-BVI.

32. Mohamed Ahmed Badawy Al-HUSSEINY (“HUSSEINY”), a U.S.

citizen, was the CEO of Aabar from 2010 to 2015. He was also a director of Aabar-BVI.

EVIDENCE SUPPORTING FORFEITURE

33. The Defendant Asset represents a portion of the proceeds of over $3.5

billion misappropriated from 1MDB. That misappropriation occurred in multiple phases

over the course of several years. The misappropriated funds were then used to purchase


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the Defendant Asset, as well as to fund the co-conspirators’ lavish lifestyles, including

purchases of artwork and jewelry, the acquisition of luxury real estate, the payment of

gambling expenses, and the hiring of musicians and celebrities to attend parties. The use

of the diverted 1MDB funds for the personal benefit of the co-conspirators and their

associates was not consistent with the purposes for which 1MDB raised the funds, and

neither 1MDB nor the government of Malaysia realized any returns on these purchases

and expenditures.

I. BACKGROUND ON THE FORMATION OF 1MDB

34. 1MDB is an investment and development entity wholly-owned by the

government of Malaysia, through the Ministry of Finance (“MOF”). It grew out of an

entity called “Terengganu Investment Authority” (“TIA”).5 In or around February 2009,

the Malaysian municipality of Terengganu, assisted by Goldman, formed TIA with the

stated purpose of investing and managing that municipality’s public funds. To raise

capital for its operations, TIA issued and sold Islamic medium term notes (“IMTNs”), a

form of debt security, valued at 5 billion Malaysian ringgit (MYR). By 2009 conversion

rates, this amounted to approximately $1,425,680,000. The IMTNs were 30-year notes

with a yield of approximately 5.75 percent, issued with the assistance of AmBank in

Malaysia.

35. LOW Taek Jho, a/k/a Jho LOW (“LOW”), a Malaysian national, served as

an advisor to TIA and its founders as early as January 2009.

36. Electronic communications between Goldman employees and individuals

involved with TIA confirm that LOW was involved in the creation of TIA. For example,

on or about January 14, 2009, 1MDB OFFICER 1, who served as TIA’s Executive

Director of Business Development and later became the Executive Director of 1MDB,

sent an email to, among others, LOW and Goldman employees with the subject line “Re:

5 Except where a distinction is made, all references to 1MDB may refer to TIA before it was renamed 1MDB.


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Project TIARA.” In this email, 1MDB OFFICER 1 stated, referring to LOW: “I think it

is best to get Jho involve[d] at every stage. Jho will revert on the suitability of dates n

[sic] time for the next 48 hrs.”

37. On or about March 31, 2009, LOW sent an email to a Goldman employee

and 1MDB OFFICER 1 with the subject line “Re – Press Answer URGENT.” In the

email, LOW stated:

Bro, here is outline of the issues I would like to discuss with the Terengganu

Investment Authority. In essence the disquiet surrounding the plan is that the

fund will operate entirely on borrowed money, which is largely anathema

because it puts taxpayer’s money at risk. Could they elaborate on this

concern?

There is also the issue of transparency and will the money go towards

portfolio investments or be used to buy strategic stakes in companies.? [sic]

38. According to Malaysian news reports and archived 1MDB press releases, in

or around July 2009, the Malaysian Ministry of Finance assumed control of TIA and the

more than $1 billion in IMTNs issued by TIA. In September 2009, TIA’s name was

changed to 1Malaysia Development Berhad, or 1MDB. The Malaysian government also

became a guarantor on the IMTNs. 1MDB was to act as a strategic development

company, wholly-owned by the Malaysian government, with a mission to promote

Malaysian economic development through global partnerships and foreign direct

investment. The Malaysian government exercised a high degree of control over 1MDB

pursuant to its governing documents, including its Articles of Association.

39. Upon its formation, MALAYSIAN OFFICIAL 1 assumed a position of

authority with 1MDB. MALAYSIAN OFFICIAL 1 had the authority to approve all

appointments to, and removals from, 1MDB’s Board of Directors and 1MDB’s Senior

Management Team. In addition, any financial commitments by 1MDB, including


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investments, that were likely to affect a guarantee given by the government of Malaysia

for the benefit of 1MDB or any policy of the Malaysian government, required, the

approval of MALAYSIAN OFFICIAL 1.

II. THE GOOD STAR PHASE: MORE THAN $1 BILLION IS

MISAPPROPRIATED FROM 1MDB

A. EXECUTIVE SUMMARY OF THE GOOD STAR PHASE

40. As one of its first investment projects, 1MDB entered into an agreement in

September 2009 with PetroSaudi International (“PetroSaudi” or “PSI”), a private Saudi

Arabia-based oil services company, to form a joint venture called 1MDB PetroSaudi Ltd.

(“the 1MDB-PetroSaudi JV” or “Joint Venture”). The stated purpose of the Joint

Venture was to exploit certain energy concession rights in Turkmenistan and Argentina

that PetroSaudi purported to own. Under the terms of the agreement, (a) 1MDB agreed

to invest $1 billion in cash in the Joint Venture in exchange for a forty percent (40%)

equity interest in the Joint Venture, and (b) PetroSaudi agreed to give the Joint Venture

the mineral extraction concessions it purportedly owned in Turkmenistan and Argentina

in exchange for a sixty percent (60%) equity interest in the Joint Venture. PetroSaudi’s

energy concession rights were allegedly valued at approximately $2.7 billion.

41. Both 1MDB’s Board of Directors and Bank Negara, Malaysia’s Central

Bank, approved the transfer of $1 billion to the Joint Venture. However, as set forth in

greater detail in the sections that follow, LOW and his associates caused $700 million of

the $1 billion that was to be invested in the Joint Venture to be sent to an account at RBS

Coutts Bank in Zurich (“RBS Coutts”) held in the name of Good Star Limited (“Good

Star Account”).

42. Between May and October 2011, approximately $330 million in additional

funds were wired at the direction of 1MDB officials to the Good Star Account

purportedly in connection with a financing agreement executed between 1MDB and the

1MDB-Petrosaudi JV.


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43. Although 1MDB officials represented, including to Deutsche Bank in

Malaysia, that Good Star was a wholly-owned subsidiary of PetroSaudi, this was not

true. According to banking records, Good Star was a company controlled by LOW, and

LOW was also the Good Star Account’s beneficial owner and sole authorized signatory.

At the time, LOW was a 29-year-old with no official position with 1MDB or PetroSaudi.

B. INCEPTION OF GOOD STAR AND THE GOOD STAR ACCOUNT

44. RBS Coutts bank account records indicate that Good Star Limited was

formed in the Seychelles on or about May 18, 2009.6 The sole director of Good Star is

listed as Smart Power, of which LOW is the sole director. LOW is listed on the bank

records as Good Star’s secretary. Smart Power’s ownership equity in Good Star consists

of a single bearer share of company stock. That single bearer share was issued to LOW

on or about June 2, 2009, seven days before he opened the Good Star Account. In

exchange for that single bearer share, LOW paid $1 in consideration.

45. A Memorandum issued pursuant to Good Star’s Articles of Association

indicates that the company’s books, records, and minutes would be maintained at 50

Raffles Place in Singapore, c/o SINGAPORE BANKER 1. SINGAPORE BANKER 1’s

office is also designated as the location where “all correspondence” to Good Star should

be sent. At the time, SINGAPORE BANKER 1 was employed as a banker at RBS

Coutts in Singapore. RBS Coutts’ Singapore branch occupied an address at 50 Raffles

Place in Singapore.

46. On or about June 9, 2009, LOW opened the Good Star Account at an RBS

Coutts branch in Singapore by completing an “Application for Opening an

Account/Custody Account by Legal Entities.” The application bears LOW’s signature.

LOW also completed a form entitled “Establishment of the Beneficial Owner’s Identity,”

which identified LOW as the sole beneficial owner of the Good Star Account. LOW

6 Seychelles is a sovereign country located in the Indian Ocean off of East Africa.


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also completed a form entitled “Resolutions,” in which LOW was named as the sole

authorized signatory on the Good Star Account. This form also bears LOW’s signature.

Included in the account opening records was a copy of a page from LOW’s Malaysian

passport containing, among other things, LOW’s photograph.

C. 1MDB FORMS A JOINT VENTURE WITH PETROSAUDI IN

SEPTEMBER 2009

47. On or about September 18, 2009, the 1MDB Board of Directors (“Board”)

met at the Royale Chulan Hotel in Kuala Lumpur, Malaysia. The 1MDB Board minutes

of that meeting provide that the purpose of the meeting was to discuss the anticipated

creation of the 1MDB-PetroSaudi JV. The following individuals were present: (i)

1MDB OFFICER 1, (ii) the CEO of 1MDB (“1MDB OFFICER 2”), (iii) the Chairman

of the 1MDB Board, (iv) 1MDB’s Director of Investments, and (v) three 1MDB

Directors.

48. The Board minutes further indicate that 1MDB OFFICERS 1 and 2 offered

a Position Paper during the September 18, 2009 meeting. The Position Paper, signed by

1MDB OFFICERS 1 and 2, included a formal request that the 1MDB Board authorize

1MDB “to invest US$1 bln into the [1MDB-PetroSaudi JV] upon signing of the [1MDB-

PetroSaudi JV Agreement] as its contribution to the capital of the [1MDB-PetroSaudi

JV].”

49. The Board minutes state further that, on or about September 18, 2009, the

1MDB Board authorized 1MDB to enter into negotiations with PetroSaudi for the

purpose of creating the 1MDB-PetroSaudi JV. However, the 1MDB Board also resolved

that 1MDB’s management should report back to the Board regarding some of the issues

raised by the Board, including whether (i) an expert selected by 1MDB could be used to

assess the value of PetroSaudi’s assets and (ii) PetroSaudi could also be required to

invest at least $1 billion in cash into the 1MDB-PetroSaudi JV.


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50. A special meeting of the 1MDB Board was held on September 26, 2009,

which was attended by 1MDB OFFICERS 1 and 2 and members of the Board.

LOW also attended this meeting. Just prior to the meeting, LOW spoke by telephone

with MALAYSIAN OFFICIAL 1.

51. According to the 1MDB Board minutes of the September 26, 2009 meeting,

1MDB’s Board passed a resolution authorizing 1MDB to transmit $1 billion to the

1MDB-PetroSaudi JV. Specifically, the 1MDB Board approved 1MDB’s resolution to

transfer $1 billion from 1MDB through a foreign exchange transaction with Deutsche

Bank (Malaysia) Berhad (“Deutsche Bank”), “into the bank account of [the 1MDB-

PetroSaudi JV] for the purpose of subscribing of 1 billion ordinary shares in [the 1MDB-

PetroSaudi JV].” The resolution was signed by the Chairman of the 1MDB Board and

1MDB OFFICER 2.

52. The Joint Venture Agreement (“JVA”) between 1MDB and PetroSaudi was

executed on or about September 28, 2009. Under the terms of the JVA, 1MDB agreed to

invest $1 billion into the 1MDB-PetroSaudi JV in exchange for one billion equity shares,

equivalent to a 40% equity stake in the 1MDB-PetroSaudi JV. In turn, PetroSaudi

agreed to place into the 1MDB-PetroSaudi JV certain assets valued at approximately

$2.7 billion, purportedly consisting of “energy interests in the Turkmenistan sector of the

Caspian Sea” and “the Argentinean provinces of Rio Negro” and Chubut. 1MDB

OFFICER 2 signed the JVA on behalf of 1MDB, and the CEO and co-founder of

PetroSaudi (“PETROSAUDI CEO”), a Saudi national, signed on behalf of PetroSaudi.

53. The JVA provided further that 1MDB’s $1 billion contribution was to be

made in “immediately available cleared funds to a bank account in the name of, and

nominated by, [the 1MDB-PetroSaudi JV] with BSI Bank.”

54. BSI Bank is a private bank based in Switzerland that maintained a branch

in Singapore. The JVA required that 1MDB and PSI officials be joint signatories on the

BSI Bank account into which 1MDB’s contribution to the Joint Venture was to be

deposited. The JVA expressly required that, upon 1MDB’s contribution of $1 billion,


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the 1MDB-PetroSaudi JV was to “deliver to 1MDB evidence, in the name of BSI Bank,

establishing that 1MDB was a joint beneficial owner” of the account at BSI Bank into

which 1MDB’s contribution to the 1MDB-PetroSaudi JV was deposited.

55. The JVA also required that by September 30, 2009 (within two days of the

JVA’s execution), the 1MDB-PetroSaudi JV pay to PetroSaudi $700 million,

purportedly as repayment for a loan PetroSaudi made to the 1MDB-PetroSaudi JV.

According to the JVA, PetroSaudi agreed to make this loan to the Joint Venture just

three days prior to execution of the JVA, that is, on or about September 25, 2009.

56. Notwithstanding the reference in the JVA to a “loan” from PetroSaudi to

the Joint Venture, PetroSaudi made no such loan, based on the following facts and

circumstances, among others:

a. On September 25, 2009, before the JVA was signed, PetroSaudi

purportedly agreed to make the loan, which was due to be repaid on or about September

30, 2009. There is no apparent commercial purpose for this loan.

b. The bank account maintained by the Joint Venture at J.P. Morgan

(Suisse), into which 1MDB ultimately transferred $300 million, was not opened until

September 30, 2009, after the loan was purportedly made.

c. Although PetroSaudi opened an account at J.P. Morgan (Suisse) in

June 2009, this account was “inactive” until December 2009.

d. The Malaysian Public Accounts Committee (“PAC”), a committee

within the Malaysian Parliament responsible for examining the accounts of public

authorities and other bodies administering public funds, conducted an examination of

1MDB and its financial activities, and it produced a public and non-public report of its

findings. According to an English-language translation of the public report available on

the PAC’s website, the auditors tasked by the PAC to examine 1MDB’s activities were

unable to validate documents related to PetroSaudi’s purported $700 million loan to the

1MDB-PetroSaudi JV and were unable to verify the existence of such a loan.


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e. As detailed below, the $700 million went to an account controlled by

LOW, not by PetroSaudi.

57. Regardless of the veracity of the purported loan from PetroSaudi to 1MDB-

PetroSaudi JV, the Position Paper that was presented to the 1MDB Board did not

disclose the existence of any loan, or any anticipated loan, from PetroSaudi to the Joint

Venture. Nor did the Position Paper disclose the need for 1MDB to direct any portion of

its $1 billion investment in the Joint Venture to PetroSaudi (rather than the Joint

Venture) in repayment of a loan. Indeed, at the time that the 1MDB Board authorized

the $1 billion investment in the 1MDB-PetroSaudi JV on September 26, 2009, the Board

was not told that any portion of the $1 billion investment in 1MDB-PetroSaudi JV would

be transferred to any entity other than the Joint Venture. Even though Article 75 of

1MDB’s Articles of Association requires that 1MDB’s Board approve all investment

decisions, the Board did not approve the use of 1MDB’s investment in the Joint Venture

to repay PetroSaudi for a loan, let alone to pay an entity unaffiliated with PetroSaudi.

58. On or about September 30, 2009, 1MDB issued a press release entitled,

“[PSI] and [1MDB] in US $2.5 billion joint-venture partnership, opens new door to FDIs

[Foreign Direct Investments.]” The press release stated:

The [1MDB-PetroSaudi JV’s] objective is to seek, explore, and participate

in business and economic opportunities which result in the enhancement and

promotion of the future prosperity and long-term sustainable economic

development of Malaysia. It is expected to actively make investment in the

renewable energy sector. The [1MDB-PetroSaudi JV] is also expected to be

a vehicle for investments from the Middle East into the region, thereby

giving Malaysia the edge in drawing investments from the cash- and

resource-rich region.


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D. FALSE REPRESENTATIONS TO BANKS CAUSING $700 MILLION DIVERSION FROM 1MDB TO THE GOOD STAR ACCOUNT

59. As set forth below, members of 1MDB’s Senior Management Team,

including 1MDB OFFICERS 1 and 2, made material misrepresentations and omissions

to Deutsche Bank officials in order to cause Deutsche Bank to divert $700 million of

1MDB’s funds to the Good Star Account.

60. On or about September 30, 2009, a letter signed by 1MDB OFFICER 1 was

delivered “BY HAND” to Deutsche Bank in Malaysia instructing the Bank to transfer (i)

$300 million to an account at J.P. Morgan (Suisse), S.A. in Switzerland (the “$300

million wire transfer”) and (ii) $700 million to an account at RBS Coutts in Switzerland

(the “$700 million wire transfer”). The instructions specified the account numbers for

the two destination accounts but did not identify account names or beneficiaries.

61. J.P. Morgan Chase Bank (“J.P. Morgan”) records show that the Swiss J.P.

Morgan account referenced in the instructions to Deutsche Bank (that is, the account that

was to receive the $300 million wire transfer) belonged to an account held in the name of

the 1MDB-PetroSaudi JV (hereinafter, the “J.P. Morgan JV Account”).

62. RBS Coutts records show that the RBS Coutts account referenced in the

instructions to Deutsche Bank (that is, the account that was to receive the $700 million

wire transfer) was the Good Star Account.

63. These two transactions were to be carried out as foreign exchange

transactions, in which Deutsche Bank, on behalf of 1MDB, was to exchange an

equivalent sum of Malaysian Ringgit (“MYR”) for $1 billion in U.S. dollars.

64. In an email dated September 30, 2009, at 1:09 p.m., a 1MDB official

represented to a Deutsche Bank employee (the “Deutsche Bank Employee”), that the

“beneficiar[y]” of the $300 million wire transfer was the Joint Venture and the

“beneficiar[y]” of the $700 million wire was PetroSaudi. In that same email, the 1MDB


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official indicated to Deutsche Bank that, “[i]n order to avoid any unforeseen

circumstance, we are not incorporating the name of the beneficiary in our instruction

letter and please follow our instruction according.”

65. Under Malaysian law, 1MDB was required to obtain approval from Bank

Negara, Malaysia’s Central Bank, before completing either of the ordered wire transfers.

On or about September 30, 2009, at approximately 2:05 p.m., the Acting Deputy

Director of Bank Negara’s Foreign Exchange Administration Department sent a letter

via facsimile to 1MDB OFFICER 1 (the “Bank Negara Letter”). In this letter, Bank

Negara acknowledged that “the funds for the approved investment will be remitted to

PetroJV’s account maintained with J.P. Morgan SA and RBS Coutts Bank Ltd.” The

reference to “PetroJV” was intended to refer to the 1MDB-PetroSaudi JV.

66. Later that same day, 1MDB OFFICER 1 provided a copy of the Bank

Negara Letter to Deutsche Bank, prior to Deutsche Bank’s initiation of the $700 million

wire transfer.

67. On September 30, 2009, at approximately 2:39 p.m., the Deutsche Bank

Employee, a Deutsche Bank supervisor (“Deutsche Bank Supervisor”), and 1MDB

OFFICER 1 had a telephone conversation regarding the requested $700 million wire

transfer. During this conversation, 1MDB OFFICER 1 falsely represented that the

beneficiary of the $700 million wire was PetroSaudi. In truth, the beneficiary of the wire

was Good Star. Their exchange, conducted in English, was as follows:

1MDB OFFICER 1 Hey, No [mah], I, whatever mistake they’ve made you cannot go back [ask] them. They [already] give you approval from [Bank Negara] all the way to the top.

Deutsche Bank Supervisor

Um-hum . . .

1MDB OFFICER 1 Uh. You want to, hang on, this one ___. The ___ is asking me to go and send it now.


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Okay, okay, okay. Let, let, let me just convince my compliance person. This is, I’m, I’m fine with you about the compliance side, uh, it’s. It’s a little bit sticky with this. But let me just try –

1MDB OFFICER 1 Good.


--and convince her

1MDB OFFICER 1 Yeah, and __ I don’t know how to answer you know, that’s why I’m under tremendous pressure –

1MDB OFFICER 1 Then, they going to be so upset ____?


Um-hum-hum. But it is okay for us to call [Bank Negara] if we need to, huh? Just, just to uh –

1MDB OFFICER 1 Yeah, yeah, yeah, yeah, yeah, yeah


Because it’s not my decision.

1MDB OFFICER 1 But—


--[it’s my] compliance uh person.

1MDB OFFICER 1 [You tell your] compliance.


Yeah.

1MDB OFFICER 1 If they don’t send it [ah]


Yeah.

1MDB OFFICER 1 ____ will [blame] them [___], the deal goes off, you know.


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Okay, okay, okay.

1MDB OFFICER 1 No, I’m serious you know, you know this ___?


No, no, I understand. Understand. Yeah.

1MDB OFFICER 1 You know, if, do whatever you [can] do, either they send it now or they, they, they double [back], or whatever, but they cannot wait for this, you know.

Deutsche Bank Employee

Yeah, just, just, just one quick question [1MDB OFFICER 1], what—

1MDB OFFICER 1 But if they’re going to overkill on the compliance thing uh they have to be responsible you know.


I understand that. Uh—


Yes, that’s, that’s fine. But just one question as to why is it going to [PetroSaudi] itself? Is there any particular reason?

1MDB OFFICER 1 Actually –


Ah—

1MDB OFFICER 1 --for us, we don’t care. Because 700 million I mean it’s a __ advance [that’s] owed to them.


Oh, I see.

1MDB OFFICER 1 Alright. They give us instructions, send [whatever] they want to send it. ____.


Ah, I see, I see. Okay. Okay.


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1MDB OFFICER 1 And for us what we care about making sure they have issue us one billion dollars [shares].


Ah.

1MDB OFFICER 1 --and the three hundred million goes to the account where [we control].


Ah. Okay. That, that’s—

1MDB OFFICER 1 ____ to them. This is where they want to send, they want to send to Timbuktu also, we don’t care.


Yeah, that’s fine. Alright. We just wanted to understand the background.

1MDB OFFICER 1 So [if] your compliance is overkill in terms _________ --


Yeah.

1MDB OFFICER 1 --the message—

**** 68. On September 30, 2009, at approximately 2:51 p.m., the Deutsche Bank

Supervisor had a telephone conversation with a Bank Negara official (“Bank Negara

Official”). Their conversation included the following exchange:


I understand that. I understand that. Okay. So you know in terms of account it’s basically a business decision for the [client] [now].

Bank Negara Official Yeah, yeah, yeah, because we, we, I mean we do not know of the, all that when there applied to us, they got 1.5 billion will be put by the Saudi MDB, one billion by us, uh by Malaysia –

Deutsche Bank Um-hum, um-hum—


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Supervisor

Bank Negara Official --and that, and the crediting of the account and so on , is this their business decision, la, so long as it does not deviate from the original intention and that is not for Bank Negara to say but more of the government [la] because this is MOF’s . . . baby [la].

69. When the Bank Negara Official used the words “original intention,” he/she

meant the $1 billion in funds that were meant to be sent to the 1MDB-PetroSaudi JV.

70. At approximately 3:14 p.m., Deutsche Bank transmitted to RBS Coutts a

SWIFT payment order requesting that $700 million be credited to an account at RBS

Coutts.7 The SWIFT message did not identify the owner of the RBS Coutts account, but

the account number listed on the SWIFT as the recipient of the $700 million wire

transfer was the number of the Good Star Account.

71. Approximately six minutes later, at about 3:20 p.m., Deutsche Bank

transmitted a second SWIFT payment order to J.P. Morgan (Suisse) requesting that $300

million be credited to an account at J.P. Morgan (Suisse). As with the other SWIFT

message, the SWIFT message for the $300 million wire transfer did not identify the

owner of the beneficiary account. The account number listed in the SWIFT for the $300

million wire transfer matched the number for the J.P. Morgan JV Account.

72. At approximately 5:08 p.m., a Deutsche Bank compliance officer sent an

email to the Deutsche Bank Employee seeking “email confirmation from 1MDB of the

names of the beneficiaries to both payments.” The compliance officer also advised the

Deutsche Bank Employee that Bank Negara approved the wire transfers for the purpose

of allowing 1MDB to acquire an equity interest in the 1MDB-PetroSaudi JV. The email

7 SWIFT is an abbreviation for Society for Worldwide Interbank Financial Telecommunication, and a SWIFT payment order is a standard electronic communication used by and between financial institutions to conduct monetary transactions.


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indicates the compliance officer’s belief that the $700 million wire transfer was being

sent to PetroSaudi (rather than Good Star).

73. On October 1, 2009, the Deutsche Bank Employee sent an email to other

Deutsche Bank employees stating: “The 3rd party payment by 1MDB to [the 1MDB-

PetroSaudi JV] and [PetroSaudi] is approved from my end.” This email indicated the

Deutsche Bank Employee’s similar belief that the $700 million wire transfer was being

sent to PetroSaudi.

74. On October 2, 2009, an RBS Coutts employee with the Regulatory Risk

department emailed a Deutsche Bank employee, stating: “Please urgently confirm the

full name of the final beneficiary of the funds per e-mail and authenticated swift (see

details below) in order for us to apply the funds.” (Emphasis in original). In the email,

the RBS Coutts employee further explained that “[w]e are not in a position to credit the

funds without full beneficiary details (full name, address, account no.).”

75. Later, at approximately 6:19 p.m., the Deutsche Bank Employee sent an

email to 1MDB OFFICERS 1 and 2, explaining, “I believe RBS [Coutts] needs

confirmation on the beneficiary’s name in order to complete their internal risk mitigating

processes as no name was[.] We will await your instructions on whether to reveal the

beneficiary name and address (please provide) to RBS Coutts.”

76. Thereafter, at approximately 7:51 p.m., 1MDB OFFICER 2 emailed the

Deutsche Bank Employee and 1MDB OFFICER 1 with authorization to disclose to RBS

Coutts that the beneficiary of the $700 million wire was Good Star. However, 1MDB

OFFICER 2 misrepresented the nature of the relationship between Good Star and

PetroSaudi. Specifically, 1MDB OFFICER 2 stated: “This payment was for beneficiary

‘Good Star Limited’ in their SWIFT. Good Star is owned 100% by PetroSaudi

International Limited.” In reality, however, Good Star’s sole shareholder and the

signatory on its account was LOW – not PetroSaudi. Approximately 30 minutes later,

1MDB OFFICER 2 emailed the Deutsche Bank Employee and provided Good Star’s


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address as P.O. Box 1239, Offshore Incorporation, Victoria, Mahe, Republic of

Seychelles.

77. Finally, at approximately 9:30 p.m., Deutsche Bank submitted to RBS

Coutts a revised SWIFT instruction identifying “Good Star Limited” as the beneficiary

of the $700 million wire transfer, located at P.O. Box 1239, Offshore Incorporation,

Victoria, Mahe, Republic of Seychelles.

78. On or about October 23, 2009, Deutsche Bank informed Bank Negara

through a regulatory filing that the purpose of the $700 million wire transfer was for an

“equity investment in [a] new entity.”

79. J.P. Morgan Chase bank records confirm that on or about September 30,

2009, the Good Star Account received the $700 million wire transfer from Deutsche

Bank. A U.S. correspondent bank account at J.P. Morgan processed the $700 million

wire transfer to the Good Star Account at RBS Coutts.

80. The 1MDB-PetroSaudi JV never had an account at RBS Coutts. Rather, as

stated above, the 1MDB-PetroSaudi JV maintained an account at J.P. Morgan, and that

account received only $300 million of the total $1 billion that was to be invested in the

Joint Venture.

E. 1MDB OFFICERS 1 AND 2 CONCEAL MISAPPROPRIATION OF

FUNDS FROM 1MDB BOARD OF DIRECTORS

81. Even after the $700 million wire transfer was made into the Good Star

Account, 1MDB OFFICERS 1 and 2 continued to make material misrepresentations to

the 1MDB Board relating to the true identity of the beneficiary of the $700 million wire

transfer.

82. The 1MDB Board met in Selangor, Malaysia on October 3, 2009. The

individuals present at the meeting included 1MDB OFFICERS 1 and 2, the Chairman of

the 1MDB Board, 1MDB’s Secretary, and three directors of the 1MDB Board.


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83. The 1MDB Board minutes for that meeting indicate that 1MDB OFFICER

2 made false and misleading representations to the Board in explaining key details

relating to the $700 million wire transfer. For example, 1MDB OFFICER 2 informed

the Board that, “[o]f the US$1 billion [1MDB] was supposed to inject into the [Joint

Venture], . . . US$700 million was remitted to PSI directly as settlement of all the

amounts owed by the JVCo. to PSI.” This statement is false and misleading for several

reasons:

a. First, the representation by 1MDB OFFICER 2 that the $700 million

wire transfer was sent directly to PetroSaudi was false. As noted above in paragraph 79,

these funds were sent to an account held in the name of Good Star.

b. Second, as noted above, Good Star is not a subsidiary of PetroSaudi,

nor was PetroSaudi a beneficial owner of the Good Star Account.

c. Third, a loan does not appear to have ever been made by PetroSaudi

to the 1MDB-PetroSaudi JV and, thus, the $700 million wire transfer could not have

been a “settlement of all the amounts owed by the” 1MDB-PetroSaudi JV.

d. Fourth, notwithstanding the fact that 1MDB OFFICER 2, who signed

the JVA on or about September 28, 2009, was aware that the JVA included contractual

terms requiring the 1MDB-PetroSaudi JV to repay PetroSaudi $700 million for a

purported loan, neither 1MDB OFFICER 1 nor 1MDB OFFICER 2 disclosed this fact to

the1MDB Board prior to October 3, 2009 – after the $700 million wire had already been

diverted to the Good Star Account.

84. Even without having been told that the $700 million wire was sent to an

account held in the name of Good Star, 1MDB Board members raised concerns about the

transaction as represented by 1MDB OFFICER 2. Specifically, the minutes state, in

pertinent part:

The concerns raised by the [1MDB Board] that the recent developments in

the joint venture was not in accordance with the [1MDB Board’s]


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understanding of the process, based on representations made at the previous

Special [1MDB Board] Meetings. Specifically:

(a) The [1MDB Board] was not consulted on the change of plans

to remit $700 million to [PetroSaudi]. The [1MDB Board’s] understanding

was for the full USA $1 billion to be wired to the joint bank account under

the name of the [Joint Venture] and the [Joint Venture’s] board of directors

makes the decision to remit US$700 million to [PetroSaudi].

***

(d) The substantial investment of US$1billion should have merited a

more thorough thought and due diligence process.

85. After expressing these concerns, 1MDB Board members asked that 1MDB

determine whether it would be possible to seek the return of the $700 million “so that the

funds could be remitted through the original agreed channel,” namely, the BSI Bank

account held in the name of the 1MDB-PetroSaudi JV.

86. The 1MDB Board instructed 1MDB OFFICER 2 and 1MDB management

“not to deviate from the [1MDB Board’s] instructions and what the [1MDB Board] has

agreed/understood to be the procedures of a particular transaction.”

87. The 1MDB Board met again in Selangor, Malaysia, on October 10, 2009.

The individuals present at the meeting included 1MDB OFFICER 2, the Chairman of the

1MDB Board, 1MDB’s Secretary, and three directors of the 1MDB Board.

88. The 1MDB Board minutes for this meeting indicate that 1MDB OFFICER 2

sought to respond to the concerns raised by the 1MDB Board at the October 3, 2009

meeting. Specifically, 1MDB OFFICER 2 represented that the $700 million wire

transfer was sent “directly to” PetroSaudi in order to repay PetroSaudi’s purported $700


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million loan to the Joint Venture. 1MDB’s management explained that, pursuant to

clause 4.5 of the JVA, 1MDB was required to repay PetroSaudi’s loan by September 30,

2009.

89. In fact, clause 4.5 of the JVA required the 1MDB-PetroSaudi JV, rather

than 1MDB itself, to repay PetroSaudi for the purported loan. Furthermore, by the

JVA’s terms, the repayment of the loan could be made only after notice was provided to

both 1MDB and PetroSaudi and both entities approved the repayment. However, prior

to October 3, 2009, the 1MDB Board was never told about a purported loan from

PetroSaudi to the 1MDB-PetroSaudi JV.

90. At no point prior to the execution of the Joint Venture, or in the Board

meetings held shortly thereafter to discuss the transaction, did 1MDB OFFICER 1 or 2

inform the 1MDB Board that funds from 1MDB had been sent to Good Star.

F. AN ADDITIONAL $330 MILLION IN 1MDB FUNDS WAS

DIVERTED TO LOW’S GOOD STAR ACCOUNT IN 2011

91. An additional $330 million in 1MDB funds was subsequently funneled into

the Good Star Account in 2011 under false pretenses. Although these funds were

intended to be transmitted to the 1MDB-PetroSaudi JV under a financing agreement

signed by 1MDB and the 1MDB-PetroSaudi JV, the funds were instead transmitted via

international wire transfers to the Good Star Account. Although 1MDB officials were

aware that these funds were not being sent to an account maintained by the 1MDB-

PetroSaudi JV, this fact was withheld from Deutsche Bank. J.P. Morgan correspondent

bank records demonstrate that funds were transferred to LOW’s Good Star Account.

92. On or about June 14, 2010, the 1MDB-PetroSaudi JV entered into a loan

agreement with 1MDB called a Murabaha Financing Agreement (“MFA”). Under the

MFA, 1MDB agreed to provide the 1MDB-PetroSaudi JV with a loan at an annual rate

of return of 8.75%.


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93. On or about May 12, 2011, the 1MDB-PetroSaudi JV issued to 1MDB a

Notice of Drawing (the “Notice”). The Notice was signed by the PETROSAUDI CEO

on behalf of the 1MDB-PetroSaudi JV and requested that 1MDB transmit $330 million

to the Good Star Account.

94. J.P. Morgan correspondent bank records show that between May 20 and

October 25, 2011, $330,000,000 was transferred from 1MDB to the Good Star Account

over four wire transfers (“$330 million wire transfers”). Each of these transfers was a

foreign exchange transaction completed through financial institutions in Malaysia,

including AmBank and Deutsche Bank, and was processed through a U.S. correspondent

bank account at J.P. Morgan Chase. The following is a summary of the 2011 transfers

from 1MDB to the Good Star Account:

Table 1: 2011 Transfers from 1MDB to the Good Star Account

Date8 Amount OriginatingBank

U.S. Correspondent Bank

May 20, 2011 $30,000,000 AmBank J.P. Morgan Chase

May 23, 2011 $65,000,000 AmBank J.P. Morgan Chase

May 27, 2011 $110,000,000 Deutsche Bank J.P. Morgan Chase

Oct. 25, 2011 $125,000,000 AmBank J.P. Morgan Chase

95. On or about May 23, 2011, 1MDB’s Chief Financial Officer wrote a letter

to a Bank Negara official misrepresenting the identity of the recipient of the 1MDB

funds being disbursed under the MFA. In the letter, the 1MDB official thanked Bank

8 The dates of wire transfers may vary, even among different records for the same wire transfer, based, for example, on time zone differences and/or the lapse of time between the initiation of the wire, the crediting of funds to the correspondent bank, and the crediting of funds to the beneficiary bank.


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Negara for having approved the transmission of $330 million to the 1MDB-PetroSaudi

JV and explained that “1MDB-PSI has requested us to remit the funds to the account of

its parent company, PetroSaudi International Limited (“PSI Limited”) instead of the

account of 1MDB-PSI.” In truth, however, these funds were not being sent to

PetroSaudi, but to Good Star.

96. On or about May 25, 2011, the PETROSAUDI CEO sent 1MDB a letter on

behalf of PetroSaudi and the 1MDB-PetroSaudi JV. This letter confirmed that the

account at RBS Coutts in Switzerland had received the $30 million and the $65 million

wires referenced in the table above. However, the PETROSAUDI CEO requested that

1MDB send to RBS Coutts a “SWIFT CLARIFICATION” explaining that the

beneficiary of these wire transfers was actually “Account No. XXX.2000” (the Good

Star Account) and not “Petrosaudi International Limited.”9

97. The PETROSAUDI CEO’s statement in the May 25, 2011, letter that the

funds were not going to “Petrosaudi International Limited” was materially inconsistent

with the representation made by 1MDB OFFICER 2 in the September 30, 2009, email to

Deutsche Bank, described above in paragraph 76, in which 1MDB OFFICER 2 stated

that Good Star was a wholly-owned subsidiary of PetroSaudi.

98. On or about May 27, 2011, 1MDB OFFICER 2 signed a letter of

instruction, addressed to Deutsche Bank, requesting that an additional $110 million be

transferred from 1MDB to the Good Star Account.

9 All but the last four digits of the account number identified in PETROSAUDI CEO’s May 25, 2011, letter have been redacted pursuant to Federal Rule of Civil Procedure 5.2. The full account number listed in the PETROSAUDI CEO’s letter matches the account number for the Good Star Account.


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G. FUNDS MISAPPROPRIATED FROM 1MDB WERE

TRANSFERRED TO THE CO-FOUNDER OF PETROSAUDI AND

THEREAFTER TO MALAYSIAN OFFICIAL 1

99. As set forth above, between September and October 2009, $700 million was

fraudulently diverted from 1MDB to the Good Star Account. An additional $330 million

was fraudulently diverted from 1MDB to the Good Star Account between May and

October 2011. According to J.P. Morgan Chase banking records, between February and

June of 2011, approximately $24,500,000 of these funds was transferred to an account at

Riyad Bank maintained in the name of a Saudi prince who, together with the

PETROSAUDI CEO, co-founded PetroSaudi (“PETROSAUDI CO-FOUNDER”).

From those funds, $20,000,000 was then transferred, within days, to an account

belonging to MALAYSIAN OFFICIAL 1.

100. J.P. Morgan correspondent bank records show two transfers of funds from

the Good Star Account to the account of the PETROSAUDI CO-FOUNDER at Riyad

Bank (“PSI Co-Founder Account”): (i) one for approximately $12,500,000 on or about

February 18, 2011, and (ii) another for approximately $12,000,000 on or about June 10,

2011.

101. Correspondent bank records from J.P. Morgan Chase and Wells Fargo show

that days after the transfers from the Good Star Account to the PSI Co-Founder Account,

approximately $20,000,000 in funds was transferred from the PSI Co-Founder Account

to an account at AmBank, whose beneficiary is listed as “AMPRIVATE BANKING-

MR” (“AMPRIVATE BANKING-MR Account”). More specifically, the AMPRIVATE

BANKING-MR Account received (i) a wire of approximately $10 million on or about

February 23, 2011, roughly five days after the PETROSAUDI CO-FOUNDER received

$12.5 million from the Good Star Account, and (ii) another wire for approximately $10

million on or about June 13, 2011, roughly three days after the PETROSAUDI CO-


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FOUNDER received $12 million from the Good Star Account. These funds transferred

into and out of the PSI Co-Founder Account are summarized below:

Table 2: Transfers from Good Star to the PETROSAUDI CO-FOUNDER to

MALAYSIAN OFFICIAL 1 Date Credits into PSI

Co-Founder Account Debits from PSI

Co-Founder Account

From Amount Amount To

2/18/2011 Good Star Account

$12,500,000

2/23/2011 $10,000,000 AMPRIVATE BANKING-MRAccount


$12,000,000

6/13/2011 $10,000,000 AMPRIVATE BANKING-MRAccount

102. Plaintiff alleges on information and belief that MALAYSIAN OFFICIAL 1

is the ultimate beneficiary of the AMPRIVATE BANKING-MR Account. The

AMPRIVATE BANKING-MR Account is the same account that later received certain

payments totaling approximately $681 million in March 2013. As set forth in Paragraph

263 below, the Attorney General of Malaysia has publicly stated that the account into

which these $681 million payments were made belonged to MALAYSIAN

OFFICIAL 1.


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H. LOW LAUNDERED APPROXIMATELY $368 MILLION IN FUNDS

DIVERTED FROM THE 1MDB JOINT VENTURE INTO THE

UNITED STATES

103. LOW laundered hundreds of millions of dollars in proceeds from the

foregoing unlawful activity into the United States for the personal benefit of himself and

his associates.

104. Between approximately October 21, 2009, and October 13, 2010, eleven

wires totaling approximately $368 million were sent from the Good Star Account to an

Interest on Lawyer Account held by the law firm Shearman & Sterling LLP in the United

States (“Shearman IOLA Account”).10

105. More particularly, bank records show the following credits to the Shearman

IOLA Account from the Good Star Account:

Table 3: Transfers from Good Star to the Shearman IOLA Account

Date Amount Notations on Wire Transfer 10/21/2009 $148,000,000 N/A 1/20/2010 $117,000,000 A.PH52A1 C.PARK.W .NY (BID-USD

35M) B.AV. INVEST.(USD37.5M) C.STAKE V.H (USD 15M) D.VICEROY ST. M.H(USD 10M) E.PEARL ENERGY (THAILAND) USD 19.5M

10 Bank records demonstrate that Shearman maintained one control account into which each of the wire transfers from the Good Star Account referenced above was transferred. In addition to this control account, Shearman maintained a number of client escrow accounts to which some client funds were distributed after their receipt. References to the Shearman IOLA Account refer to the control account.


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Date Amount Notations on Wire Transfer 3/3/2010 $35,059,875 A)PH52A 1 CENT WW NYC(RENOV

USD10M) B)AVIATION WORKCAPINC (5M+10559875) C)INC VICEROY HOTEL GR (USD 7M)D)INC RENOV BUDGET BHH (USD2.5M)

5/13/2010 $15,780,000 BID PROCESS - ACQUISITION OF THE EDEN HOTEL ROME (PREPARATION OF PARTIAL PORTION OF EQUITY)

6/23/2010 $8,599,985 BID PROCESS-ASCQUISITION OF 94 PICCADILLY RD LONDON (IN AND OUT CLUB)FOR HOTEL DEVELOPMENT + SERVICRESIDENCES (PROOF OF FUNDS)

8/17/2010 $2,799,985 N/A

8/31/2010 $653,985 ACQUISITION OF ASSETS/PROPERTY PAYMENT FOR EXTENSION

9/3/2010 $8,645,985 ACQUISITION OF ASSETS/PROPERTY PARTBALANCE PAYMENT

9/28/2010 $5,999,985 ACQUISITION OF ASSETS/PROPERTY (2 PCT BID. NEW YORK HELMSLEY HOTEL - USD300M

9/28/2010 $17,999,985 ACQUISITION OF ASSETS /PROPERTY (FULL BALANCE PAYMENT + RENOVATION)

10/13/2010 $7,999,985 ACQUISITION OF ASSETS/PROPERTY BID HELMSLEY HOTEL NYC USD300M TRANCHE 2

Total: $368,539,770.00

106. As described in further detail in Section V of the Complaint, funds

transferred to the Shearman IOLA Account were then used by LOW and others to


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purchase assets and invest in business interests for their personal benefit, including, but

not limited to, luxury real estate, a Beverly Hills hotel, a private jet, and a major

Hollywood motion picture.

107. In addition, funds transferred to Shearman were also used to fund the

luxurious lifestyles enjoyed by LOW and his associates. For instance, between on or

about October 30, 2009, and June 18, 2010, a period of less than eight months, more

than $85 million in funds traceable to the Good Star Account was wired from the

Shearman IOLA Account to Las Vegas casinos, luxury yacht rental companies, business

jet rental vendors, a London interior decorator, and associates and family members of

LOW, among others.

108. For example, between October 2009 and October 2010, misappropriated

1MDB funds sent from the Good Star Account into the Shearman IOLA Account were

transferred as follows: (i) approximately $12,000,000 in wires to Caesars Palace, a Las

Vegas casino; (ii) approximately $13,400,000 in wires to the Las Vegas Sands Corp., the

owner of the Venetian Las Vegas, another casino; (iii) a wire for approximately

$11,000,000 to “Eric” TAN Kim Loong, an associate of LOW; (iv) approximately

$4,000,000 in wires to Jet Logic Ltd., a luxury jet rental service; (v) a wire for

approximately $3,500,000 to LOW’s sister; (vi) a wire for approximately $3,080,000 to

Rose Trading, a Hong Kong jeweler; (vii) approximately $2,698,000 in wires to

Yachtzoo, a luxury yacht rental service; (viii) approximately $2,288,000 in wires to

Argent Design Ltd., a United Kingdom-based interior designer; (ix) a wire for

approximately $670,000 to Excel Air, a jet rental company; (x) approximately $460,000

in wires to Skyline Private Air, an aircraft rental company; and (xi) a wire for

approximately $155,000 to Billiyon Air, a jet rental company.


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I. LOW TRANSFERRED APPROXIMATELY $389 MILLION IN

1MDB FUNDS TO ANOTHER ACCOUNT CONTROLLED BY HIM

BUT HELD IN THE NAME OF ABU DHABI-KUWAIT-MALAYSIA

INVESTMENT CORPORATION (ADKMIC)

109. Over the course of five wire transfers between June 28, 2011, and

September 4, 2013, approximately $389 million was transferred from the Good Star

Account to an account at BSI Bank in Singapore held in the name of Abu Dhabi Kuwait

Malaysia Investment Corp. (“ADKMIC BSI Account”). LOW is the beneficial owner of

the ADKMIC BSI Account.

110. In a document entitled “LOW FAMILY HISTORY AND BACKGROUND,

ORIGINS OF JYNWEL CAPITAL,” that was emailed by LOW’s brother to a New

York business person on or about August 13, 2013, the Low family represented that

“Mr. Jho Low founded the Abu Dhabi-Kuwait-Malaysia Investment Corporation in 2007

and together with third-party investment partners structured numerous multi-million

dollar buyouts with interests in construction, real estate development (Putrajaya Perdana

Berhad), water infrastructure (Loh & Loh Corporation Berhad), road concessions and oil

& gas (UBG Berhad).”

111. J.P. Morgan Chase correspondent bank account records show the following

credits to the ADKMIC BSI Account from the Good Star Account:

Table 4: Transfers from Good Star to ADKMIC

Date AmountJune 28, 2011 $55,000,000

September 4, 2012 $38,000,000

November 2, 2012 $153,000,000

December 27, 2012 $142,500,000

September 4, 2013 $456,027


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As described below, the funds transferred to the ADKMIC BSI Account were then used

by LOW and others to acquire assets in the United States, among other things.

III. THE AABAR-BVI PHASE: APPROXIMATELY $1.367 BILLION IS


A. EXECUTIVE SUMMARY OF THE AABAR-BVI PHASE

112. In 2012, approximately $1.367 billion in 1MDB funds that were raised in

two separate bond offerings were misappropriated and fraudulently diverted to bank

accounts in Switzerland and Singapore. In issuing these bonds, 1MDB participated in

the publication and disclosure of two offering circulars that contained material

misrepresentations and omissions relating to:

a. How the proceeds of these bond issuances would be used,

b. The nature of the relationship between the issuer (i.e., subsidiaries of

1MDB) and the bond’s third-party guarantor (i.e., the International

Petroleum Investment Company of Abu Dhabi (“IPIC”)), and

c. The existence of any related-party transactions connected to the 2012 bond

issuances, including that 1MDB officials, IPIC officials, and their associates

would personally benefit from the issuance of these bonds.

113. After more than $1 billion had been misappropriated from 1MDB between

2009 and 2011 in the Good Star Phase, 1MDB needed to raise additional capital to fund

its operations. As set forth in greater detail below, 1MDB engaged Goldman to arrange

and underwrite two separate bond offerings in 2012. One of the stated purposes of the

2012 bond issues was to raise funds to allow 1MDB to acquire certain energy assets.

114. IPIC, an investment fund wholly-owned by the government of Abu Dhabi,

guaranteed, either directly or indirectly, both 2012 bond offerings and, in exchange, a

nominated subsidiary of IPIC was granted an option to purchase a minority share of the

energy assets acquired by 1MDB.


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115. Almost immediately after receiving the proceeds of each of the 2012 bond

issues, 1MDB wire transferred a substantial portion of the proceeds – totaling

approximately $1.367 billion between the two bond sales, or more than forty percent of

the net proceeds raised – to a Swiss bank account belonging to an entity called Aabar

Investments PJS Limited, a British Virgin Islands-registered corporation (referred to

herein as “Aabar-BVI”) that bears a similar name to a legitimate subsidiary of IPIC,

called Aabar Investments PJS (referred to herein as “Aabar”). At the time of these

transfers, Khadem Abdulla al-QUBAISI (“QUBAISI”) was the Managing Director of

IPIC and the Chairman of Aabar; and Mohamed Ahmed Badawy Al-HUSSEINY

(“HUSSEINY”) was the CEO of Aabar. QUBAISI and HUSSEINY were also directors

of Aabar-BVI.

116. In their audited financial statements for the year ending on March 31, 2014,

1MDB booked their substantial payments to Aabar-BVI as an asset rather than a

payment, describing it as a “refundable deposit . . . held aside as collateral for the

guarantee” that IPIC provided for the 2012 bonds.

117. Following the dismissal of QUBAISI and HUSSEINY from their positions

at IPIC and Aabar in 2015, IPIC and Aabar have recently clarified that Aabar-BVI is not

owned by either entity.

118. The Swiss bank account belonging to Aabar-BVI (“Aabar-BVI Swiss

Account”) was used to siphon off proceeds of the two 2012 bond sales for the personal

benefit of individuals affiliated with IPIC, Aabar, and 1MDB, as well as their associates.

Beginning within days of receiving funds from 1MDB, Aabar-BVI transferred a total of

approximately $636 million to the Singapore bank account held by Blackstone Asia Real

Estate Partners (“Blackstone Account”). During this same time period, Aabar-BVI

transferred, through multiple overseas investment funds, an additional approximately

$465 million to the Blackstone Account. The beneficial owner of the Blackstone

Account was identified in bank records as “Eric” TAN Kim Loong (“TAN”), a

Malaysian national and an associate of LOW.


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119. Funds transferred to the Blackstone Account by Aabar-BVI were

subsequently distributed to officials of IPIC, Aabar, and 1MDB. Between approximately

May and November 2012, shortly after Blackstone’s receipt of funds from the Aabar-

BVI Swiss Account, Blackstone transferred $472,750,000 into a Luxembourg account

beneficially owned by QUBAISI. During roughly the same time period, Blackstone

transferred $66,600,000 into two different accounts beneficially owned by HUSSEINY.

In October and November 2012, Blackstone transferred $30,000,000 to an account

belonging to MALAYSIAN OFFICIAL 1. Finally in December 2012, Blackstone

transferred $5 million to a Swiss account beneficially owned by 1MDB OFFICER 3,

who was then 1MDB’s General Counsel and Executive Director of Group Strategy.

120. Shortly after receiving proceeds of the two 2012 bond sales from 1MDB,

Aabar-BVI also transferred $238,000,000 to a Singapore bank account belonging to Red

Granite Capital, an entity owned by Riza Shahriz Bin Abdul AZIZ (“AZIZ”). AZIZ is a

relative of MALAYSIAN OFFICIAL 1 and a friend of LOW. Among other things,

AZIZ used these funds to purchase luxury real estate in the United States and the United

Kingdom for his personal benefit, and to fund his movie production company, Red

Granite Pictures. 1MDB has disclaimed any investment interest in Red Granite Pictures.

B. IN 2012, 1MDB ISSUED $3.5 BILLION IN BONDS IN TWO

SEPARATE OFFERINGS ARRANGED BY GOLDMAN

1. May 21, 2012, Bond Issue

121. At least as early as January 2012, officials at 1MDB approached Goldman

for financial advice in connection with 1MDB’s anticipated acquisition of certain power

assets in Malaysia.

122. On or about March 2, 2012, 1MDB Energy Limited (“1MDB Energy”), a

wholly-owned subsidiary of 1MDB, entered into a Sale and Purchase Agreement to

acquire Tanjong Energy Holdings Sdn Bhd (“Tanjong Energy”), a power production

company, from Tanjong Power Holdings Sdn Bhd (“Tanjong Power”) for MYR 8.5


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billion, or approximately $2.755 billion U.S. dollars. 1MDB planned to raise MYR 6

billion of this MYR 8.5 billion through the local bank market.11

123. 1MDB engaged Goldman to assist in securing financing for the remaining

MYR 2.5 billion necessary to complete the Tanjong deal. By letter dated March 19,

2012, 1MDB engaged Goldman, through its Singapore office, as the “sole bookrunner

and arranger” for debt financing in connection with its capital needs for the Tanjong

acquisition. The engagement letter was signed by 1MDB OFFICER 2 and a Managing

Director of Goldman Sachs (Singapore) Pte. (“Goldman Managing Director”). Within

Goldman, this bond deal was referred to by the name “Project Magnolia.”

124. 1MDB OFFICER 3 served as a primary point of contact between 1MDB

and Goldman concerning the Project Magnolia bond transaction.

125. Electronic communications among Goldman employees during the lead-up

to the May 21, 2012, bond closing date reflect that employees at Goldman offered

differing information about the nature of LOW’s relationship to 1MDB and/or his role in

the bond deal and the procurement of the IPIC guarantee:

a. In an email dated March 27, 2012, a managing director at Goldman-

Asia referred to LOW as “the 1MDB Operator or intermediary in Malaysia.”

b. In approximately early April 2012, other Goldman employees

discussed whether LOW was involved in the Project Magnolia deal on behalf of 1MDB.

In an email dated April 3, 2012, a Goldman employee noted “that Jho Low is also

known to have close friends/ contacts in Abu Dhabi.” In an email response dated April

3, 2012, another Goldman employee wrote: “[Goldman Managing Director] said Jho

Low [was] not involved at all in deal as far as he aware [sic] but that Low was present

when [Goldman Managing Director] met . . . [the] Chairman of IPIC, in Abu Dhabi.”

11 Hereinafter, unless otherwise specified, references to 1MDB include 1MDB’s wholly-owned subsidiaries.


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126. The offering circular for the Project Magnolia bonds, dated May 18, 2012,

indicates that 1MDB Energy issued $1.75 billion in privately-placed notes, with an

interest rate of 5.99% per annum, redeemable in 2022. The closing date of the bond

issue was May 21, 2012. The net proceeds were projected to be approximately

$1,553,800,000, once Goldman’s fees, commissions, and expenses were deducted.

127. The offering circular represented that the net proceeds of the bond issue

were to be used to “partially fund” the acquisition of Tanjong Energy. Of the

approximately $1,553,800,000 raised through the Project Magnolia bond sale, MYR 2.5

billion, or approximately $810 million, was designated in the offering circular for use in

acquiring Tanjong Energy. The remainder of the net proceeds, approximately $744

million, was designated for “general corporate purposes (which may include future

acquisitions).”

128. Internal documentation prepared by Goldman summarizing the bond

transaction indicates that the “general corporate purposes” for which the bond proceeds

were contemplated included “pre-fund guarantee fees to IPIC, cash on balance sheet, and

transaction related expenses.”

129. In reality, however, nearly $577 million – a sum equivalent to more than

one third of the net proceeds of the Project Magnolia bond offering – was diverted to

Aabar-BVI within one day of 1MDB’s having received the proceeds of the bond

offering. Nothing in the offering circular disclosed that 1MDB would transfer any of the

bond proceeds to Aabar-BVI, or that funds transferred to Aabar-BVI would subsequently

be used for the benefit of officials at 1MDB, IPIC, and Aabar, including QUBAISI,

IPIC’s Chairman, and HUSSEINY, Aabar’s CEO.

130. In exchange for Goldman’s services in arranging the bond offering and in

underwriting the notes, 1MDB agreed to pay Goldman: (a) a fee of 1% of the principal

amount of the notes, or $17.5 million, as an “Arranger Fee,” and (b) $175,000,000, as a

“Commission,” for a total of $192,500,000. These fees amount to roughly 11% of the


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principal amount of the offering and were to be deducted directly from the subscription

proceeds of the bonds.

131. The notes issued by 1MBD Energy as part of Project Magnolia were

guaranteed by 1MDB. The notes were also jointly and severally guaranteed by IPIC,

which enabled 1MDB to obtain a better credit rating and, thus, a more favorable interest

rate on the bonds. QUBAISI signed the Representation Agreement between IPIC and

Goldman in which IPIC agreed to jointly guarantee the $1.75 billion in notes. Pursuant

to an “Interguarantor Agreement” between 1MDB and IPIC, dated May 21, 2012, 1MDB

agreed to “procure Ministry of Finance Inc to provide the necessary funding and support

to repay IPIC” any amounts payable and due under the notes. That agreement was

signed by QUBAISI and 1MDB OFFICER 2.

132. A document prepared by Goldman for IPIC entitled “IPIC: Meeting With

Ratings Agencies, Topics to Discuss,” characterized IPIC’s joint guarantee for the

1MDB bond issue as “unusual by previous IPIC standards.” It went on to indicate that

the guarantee was “expected to cement the strategic partnership between 1MDB and

IPIC which is in line with IPIC’s broader investment strategy in the energy and related

sectors globally and 1MDB’s mission to promote foreign direct investment into

Malaysia.”

133. The offering circular, however, contained misleading statements and

omitted material facts necessary to make its representations not misleading regarding the

consideration received by IPIC in exchange for guaranteeing 1MDB’s bonds. For

example, the offering circular indicated that in exchange for IPIC’s guarantee, 1MDB

granted “a nominated subsidiary of IPIC a right to acquire a substantial minority interest

of the share of capital in 1MDB Energy” within a ten-year period. In reality, however,

this option was actually awarded to Aabar-BVI, which was neither owned by nor

affiliated with IPIC, as described further below.

134. The consideration given by 1MDB in exchange for IPIC’s guarantee was set

forth in a May 18, 2012, “Option Agreement” between 1MDB Energy and “Aabar


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Investments PJS Limited, a company incorporated in the British Virgin Islands” (i.e.,

Aabar-BVI). In that agreement, 1MDB Energy granted Aabar-BVI the option to

purchase, within a ten-year period, up to forty-nine percent (49%) of 1MDB Energy’s

shares in the holding company that acquired Tanjong Energy, for a maximum price of up

to MYR 1,225,000,000. The agreement specified that this call option was granted to

Aabar-BVI “[i]n consideration of [Aabar-BVI] procuring the Guarantee from IPIC and

the sum of United States Dollar One (USD1.00) paid by [Aabar-BVI] to [1MDB

Energy]. . . .” 1MDB OFFICER 2 signed the agreement on behalf of 1MDB Energy,

and HUSSEINY signed on behalf of Aabar-BVI.

2. October 19, 2012, Bond Issue

135. At least as early as approximately June 2012, 1MDB sought financial

advice from Goldman in connection with its anticipated acquisition of power assets from

Genting Berhad, a Malaysian entity, and sought Goldman’s assistance in raising an

additional tranche of capital to acquire those assets. As with the Project Magnolia bond

deal, 1MDB elected to have the bond issue fully underwritten by Goldman for an

additional fee. Within Goldman, this private placement bond transaction was referred to

by the name “Project Maximus.”

136. 1MDB OFFICER 3 served as the primary point of contact between 1MDB

and Goldman concerning the Project Maximus transaction.

137. 1MDB entered into an agreement to purchase power assets from Genting

Berhad (“Genting”) on or about August 13, 2012. That same day, 1MDB created

another wholly-owned subsidiary called “1MDB Energy (Langat) Limited” (“1MDB

Energy Langat”), for the purposes of holding the power assets and issuing debt securities

to fund the acquisition Genting power assets.

138. The offering circular for Project Maximus, dated October 17, 2012,

indicated that 1MDB issued $1.75 billion in bonds through its second private placement

with Goldman, with a closing date of October 19, 2012. The notes had an interest rate of

5.75% per annum and were redeemable in 2022. The net proceeds of the bond sale –


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once Goldman’s fees, commissions, and expenses were deducted – were listed in the

offering circular as approximately $1,636,260,000.

139. The offering circular represented that the net proceeds of the Project

Maximus bond sale were to be used by 1MDB Energy Langat, in part, to satisfy its

obligations under its agreement to acquire power assets from Genting Berhad.

Specifically, the offering circular represents that 1MDB Energy Langat intended to use

approximately $692,357,349 of the approximately $1,636,260,000 in net proceeds for

the purpose of the Genting acquisition, and it intended to use the balance of the proceeds

“for general corporate purposes (which may include future acquisitions).”

140. In truth, however, as explained in paragraphs 152-153 below, $790,354,855

– a sum equivalent to roughly half of the net proceeds of the Project Maximus bond

offering – was diverted to Aabar-BVI on or about the same day that 1MDB received the

proceeds of this bond sale. As with Project Magnolia, the offering circular for Project

Maximus nowhere disclosed that nearly half of the net bond proceeds would be

transferred to Aabar-BVI, in the form of “collateral” or otherwise, or that funds

transferred to Aabar-BVI would subsequently be used for the personal benefit of

officials at IPIC, Aabar, and 1MDB, including QUBAISI and HUSSEINY.

141. 1MDB guaranteed the notes issued by 1MDB Energy Langat. Although

IPIC did not directly guarantee the Project Maximus notes as it had with the Project

Magnolia bonds, it nevertheless agreed to privately secure the bonds on a bilateral basis

with Goldman. No reference to IPIC’s indirect guarantee was included in the offering

circular. The consideration given for that guarantee was set forth in an October 17,

2012, agreement entitled “Collaboration Agreement (Option),” entered into between

1MDB Energy Langat and “Aabar Investments PJS, a joint stock company organized

under the laws of Abu Dhabi.” That agreement stated that, “[i]n consideration of Aabar

Investments procuring the Guarantee from IPIC and the sum of United States Dollar One

(USD1.00) paid by Aabar Investments to [1MDB],” 1MDB granted Aabar the option to


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acquire a forty-nine percent (49%) interest in 1MDB Energy Langat within a ten year

period.

142. Taken together, in 2012, 1MDB issued $3.5 billion in bonds that were

underwritten by Goldman and guaranteed by IPIC.

C. A SUBSTANTIAL PORTION OF THE PROCEEDS OF THE 2012

BOND SALES WAS DIVERTED TO AND THROUGH THE AABAR-

BVI SWISS ACCOUNT

143. Over the course of several months, a large portion of the proceeds of both of

the 2012 bond sales – approximately $1.367 billion in total – was transferred from

1MDB to a bank account at BSI Bank in Switzerland held in the name of Aabar-BVI.

Plaintiff alleges on information and belief that the funds transferred to the Aabar-BVI

Swiss Account by 1MDB were not held for the benefit of 1MDB, IPIC, or Aabar.

Rather, the Aabar-BVI Swiss Account was used to unlawfully divert proceeds of both

the Project Magnolia and Project Maximus bonds, which were thereafter used, after

having passed through various accounts, to make substantial payments to QUBAISI,

HUSSEINY, MALAYSIAN OFFICIAL 1, and 1MDB OFFICER 3.

1. On or about May 22, 2012, Within Roughly One Day of the First

Bond Issue, Approximately $577 Million in 1MDB Funds Was

Diverted to the Aabar-BVI Swiss Account

144. The closing date for the Project Magnolia bonds was on or about May 21,

2012. Documentation associated with the bond deal shows that a total of $650,000,000

was to be deducted from the proceeds and remitted directly to accounts designated by

Tanjong Power, the entity from which 1MDB Energy had agreed to purchase Tanjong

Energy.

145. On or about May 21, 2012, a total of $907,500,000 in proceeds from the

bond sale was transferred, at the direction of Bank of New York–London, from an


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account at Bank of New York Mellon–New York in the United States to an account at

Falcon Private Bank Limited (“Falcon Bank”) held by 1MDB Energy.

146. Roughly one day later, on or about May 22, 2012, a wire in the amount of

$576,943,490 was sent from 1MDB Energy’s bank account at Falcon Bank to an account

at BSI Bank in Lugano, Switzerland maintained by Aabar-BVI (i.e., the “Aabar-BVI

Swiss Account”). This amount represents more than one third of the net proceeds from

the bond sale. The funds passed through correspondent bank accounts at J.P. Morgan

Chase and Citibank in the United States before being transferred to Aabar-BVI.

147. Nothing in the Project Magnolia offering circular disclosed that any funds

would be sent to Aabar-BVI, let alone one third of the net bond proceeds.

148. Falcon Bank is wholly-owned by Aabar, and at the time that the

$576,943,490 was transferred from 1MDB Energy’s bank account at Falcon Bank to the

Aabar-BVI Swiss Account, HUSSEINY was Falcon Bank’s Chairman.

2. On or about October 19, 2012, Roughly the Same Day as the Second

Bond Issue, Approximately $790 Million in 1MDB Funds Was

Diverted to the Aabar-BVI Swiss Account

149. The proceeds from the Project Maximus bonds, which were issued on or

about October 19, 2012, were transferred according to a similar pattern.

150. 1MDB directed that payment of the proceeds of the Project Maximus bond

sale, totaling $1,640,000,000, be made on October 19, 2012, to 1MDB Energy Langat’s

account at Falcon Bank, via Falcon Bank’s U.S. correspondent bank account at J.P.

Morgan Chase.

151. On or about October 19, 2012, 1MDB Energy Langat wired $692,174,991

from its account at Falcon Bank in Switzerland to an account at Citibank–Singapore

belonging to Genting Power Holdings Limited in connection with the purchase of power

assets.

152. On or about that same day (that is, October 19, 2012), 1MDB wire

transferred $790,354,855 to the Aabar-BVI Swiss Account. This sum represents close to


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fifty percent (50%) of the net proceeds of the October 19, 2012 bond sale. The funds

passed through correspondent bank accounts at J.P. Morgan Chase and Citibank in the

United States before being transferred to Aabar-BVI.

153. Nothing in the Project Maximus offering circular disclosed that any portion

of the funds, let alone close to fifty percent of the net proceeds of the bond sale, would

be funneled to Aabar-BVI in the form of “collateral” or otherwise.

154. Collectively, between the two 2012 bond sales, officials at 1MDB

transferred approximately $1.367 billion in bond proceeds to the Aabar-BVI Swiss

Account. This represented more than forty percent (40%) of the total net proceeds of the

two bond sales.

3. Funds Transferred to the Aabar-BVI Swiss Account Were Not Held

for the Benefit of 1MDB, IPIC, or Aabar

155. Aabar Investments PJS Limited (referred to herein as “Aabar-BVI”) is an

entity incorporated in the British Virgin Islands (“BVI”) and is separate and distinct from

the similarly-named Aabar Investments PJS (referred to herein as “Aabar”), which is

controlled by IPIC and is incorporated in Abu Dhabi.

156. A Certificate of Incumbency prepared by Aabar-BVI’s registered agent in

the BVI indicates that Aabar-BVI was incorporated in BVI on March 14, 2012. That

certificate lists QUBAISI and HUSSEINY as Aabar-BVI’s Directors and “Aabar

Investments PJS” as its sole shareholder.

157. It is possible to register an entity with a name that mimics the name of an

existing entity, without the need to prove any relationship to the existing entity. This is a

common technique to lend the entity in question an appearance of legitimacy. It is also

possible to incorporate an entity in the BVI without providing evidence of the entity’s

true beneficial ownership and without providing evidence of the relationship between the

entity and the shareholder listed in the incorporation records.

158. Irrespective of any apparent nominal relationship between Aabar-BVI and

Aabar reflected in incorporation records, Aabar-BVI was not a legitimate subsidiary of


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Aabar or IPIC operating within the bounds of any authority granted by Aabar or IPIC,

and the funds transmitted from 1MDB to the Aabar-BVI Swiss Account were not held in

that account for the benefit of 1MDB, IPIC, or Aabar.

159. Neither of the offering circulars contain any mention of an agreement by

1MDB to pay Aabar-BVI, either as a premium or as collateral, more than forty percent

(40%) of the net proceeds from the two 2012 bond sales in order to secure the

guarantees. This information would have been material to the transactions, because it

would have significantly affected 1MDB’s liquidity, as well as its ability to engage

successfully in the business ventures described in the offering circulars, and thereby

increased the risk of default.

160. As noted in Paragraph 56, the Malaysian Public Accounts Committee

(“PAC”) initiated an audit of certain 1MDB financial transactions and produced a public

report of its findings. Auditors working at the direction of the PAC concluded that the

$1.367 billion “security deposit” payments made to Aabar-BVI in 2012 were “made

without the approval of the 1MDB Board of Directors.”

161. On or about April 11, 2016, IPIC and Aabar issued a statement to the

London Stock Exchange in response to media reports indicating that a BVI entity called

Aabar Investments PJS Limited had received substantial payments from 1MDB. In that

statement, IPIC and Aabar stated that, “Aabar BVI was not an entity within either

corporate group” and that neither IPIC nor Aabar “has received any payments from

Aabar BVI. . . .”

162. In response to IPIC’s statement to the London Stock Exchange, 1MDB

issued a press release on April 11, 2016, in which 1MDB indicated that it paid Aabar-

BVI “substantial sums” in 2012, as recorded in its financial statements. That same

release also asserted that, “1MDB company records show documentary evidence of the

ownership of Aabar BVI and of each payment made, pursuant to various legal

agreements that were negotiated with Khadem Al Qubaisi in his capacity as Managing


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Director of IPIC & Chairman of Aabar and/or with Mohamed Badawy Al Husseiny, in

his capacity as CEO of Aabar.”

163. QUBAISI and HUSSEINY were dismissed from their positions at IPIC and

Aabar in 2015.

164. In June 2016, IPIC filed its consolidated financial statements for the year

ending December 31, 2015, with the London Stock Exchange. In those financial

statements, IPIC indicated that it “understands that other companies outside the group’s

corporate structure were incorporated in other offshore jurisdictions using variations of

the ‘Aabar’ name. The Group is investigating these entities further.” IPIC reiterated that

neither it nor Aabar were affiliated with, or received payments from, Aabar-BVI.

Finally, IPIC indicated that after 1MDB defaulted on two interest payments due under

the 2012 notes in the first half of 2016, IPIC made interest payments totaling $103

million on 1MDB’s behalf “pursuant to its obligations in respect of the Guarantees.”

165. As set forth below, funds transferred from 1MDB to the Aabar-BVI Swiss

Account were distributed, inter alia, to officials at IPIC, Aabar, and 1MDB, including

QUBAISI and HUSSEINY, with several payments occurring within days of the receipt

of 1MDB funds by Aabar-BVI. Plaintiff alleges on information and belief that the

Aabar-BVI Swiss Account was used to conceal and to facilitate this unlawful diversion

of funds.

D. AABAR-BVI TRANSFERRED APPROXIMATELY $1.1 BILLION

TO THE BLACKSTONE ACCOUNT, BEGINNING WITHIN DAYS

OF RECEIVING FUNDS FROM 1MDB

166. Of the approximately $1.367 billion 1MDB sent to Aabar-BVI by 1MDB,

approximately $1.1 billion was thereafter transferred, either directly or indirectly via

overseas investments funds, into the Blackstone Account. The Blackstone Account was

controlled by TAN, a close associate of LOW. Plaintiff alleges on information and


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belief that the Blackstone Account was used as a transit account to improperly distribute

funds to individuals affiliated with 1MDB, IPIC, and Aabar.

1. Aabar-BVI Transferred Approximately $636 Million Directly to the

Blackstone Account, Beginning Within Days of Receiving Funds from

1MDB

167. Between approximately May 25, 2012, and December 14, 2012, five wire

transfers totaling $636,000,000 were sent from the Aabar-BVI Swiss Account to an

account at Standard Chartered Bank in Singapore held in the name of Blackstone Asia

Real Estate Partners (“Blackstone”). These wire transfers were processed through

correspondent bank accounts at Standard Chartered Bank and Citibank in the United

States. The approximate dates and amounts of these five wires appear below:

Table 5: Wire Transfers from Aabar-BVI Swiss Account to Blackstone

Date Amount Sending Party Receiving Party 5/25/2012 $295,000,000 Aabar-BVI Blackstone

7/25/2012 $133,000,000 Aabar-BVI Blackstone




168. TAN was identified as the beneficial owner of the Blackstone Account and

an authorized signatory on the account. The account was originally opened in the name

of Foreign FX Trading Limited. The account name was changed to Blackstone Asia

Real Estate Partners on or about May 26, 2011.

169. TAN is a friend and associate of LOW. Plaintiff alleges on information and

belief, however, that TAN’s only connection to 1MDB was his relationship with LOW.

170. Bank statements show that prior to the wire transfer of $295,000,000 from

Aabar-BVI on or about May 25, 2012, the account balance for the Blackstone Account

was $532,981.


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171. Plaintiff alleges on information and belief that Blackstone was a shell

corporation created for the purpose of maintaining a bank account to funnel diverted

money, based on the following facts and circumstances, among others:

a. The flow of money into and out of the Blackstone Account is not

consistent with what can reasonably be characterized as regular business activity. For

example, the account did not have the types of debits and credits consistent with

legitimate business activity, including, for example, transfers to vendors, payroll, or

receipt of proceeds from customers.

b. Blackstone made extensive use of a money exchange business in

Singapore called Raffles Cash Exchange. Between approximately July 2011 and

February 2013, twenty wires were sent from the Blackstone Account to Raffles Cash

Exchange, totaling approximately $12,800,000. Frequent use of currency exchange

brokers, especially for large sums and where the entity already maintains an account at a

major bank capable of processing currency exchanges, is a technique commonly used

by individuals engaged in money laundering and other unlawful conduct to move

money in a way that is less likely to be traced by law enforcement and regulatory

officials.

c. Blackstone’s full name – Blackstone Asia Real Estate Partners – is

similar, though not identical, to the name of a major real estate private equity firm,

Blackstone Real Estate. Blackstone Real Estate is an affiliate of the well-known

private investment firm Blackstone Group – an entity listed on the New York Stock

Exchange – and has, according to its website, $101 billion in assets under management.

The practice of utilizing a bank account held by an entity with a name that mimics a

well-known commercial enterprise is a technique commonly employed to lend the

appearance of legitimacy to transactions that might otherwise be subject to additional

scrutiny by the financial institutions involved, for example, because of the size of the

transaction or because of the role of a politically-exposed person or entity in the

transaction.


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2. Aabar-BVI Transferred an Additional Approximately $455 Million to

the Blackstone Account Via Overseas Investment Funds

172. Within days of Aabar-BVI’s receipt of proceeds from the Project Maximus

bond offering, an additional $455,000,000 was transferred from the Aabar-BVI Swiss

Account to the Blackstone Account via two overseas investment funds.

173. On or about October 22, 2012 – roughly six days after the Project Maximus

bond issue and four days after Aabar-BVI received approximately $790 million from

1MDB Energy Langat – Aabar-BVI sent approximately $75 million to a bank account at

ING Bank N.V. in Amsterdam belonging to Enterprise Emerging Markets Fund

(“Enterprise”). On or about the same day, Aabar-BVI also sent approximately $291

million to another bank account at ING Bank N.V. in Amsterdam belonging to

Cistenique Investment Fund (“Cistenique”). On or about November 2, 2012, Aabar-BVI

sent an additional approximately $97 million to Enterprise. In the case of each of these

three payments, the funds were transferred from Aabar-BVI via the clearing company

Citco, before being transferred on to either Enterprise or Cistenique.

174. Enterprise and Cistenique are relatively small investment funds located in

Curacao that have other customers and hold investments unrelated to 1MDB.

175. Shortly after Cistenique and Enterprise received funds from Aabar-BVI,

each transferred a substantially similar amount to the Blackstone Account. More

particularly:

a. On or about October 24, 2012, roughly two days after receiving

approximately $291,000,000 from Aabar-BVI, Cistenique transferred $285,000,000 to

the Blackstone Account.

b. On or about October 24, 2012, approximately two days after

receiving approximately $75,000,000 from Aabar-BVI, Enterprise transferred

$75,000,000 to the Blackstone Account. On or about November 8, 2012, approximately

six days after receiving $97,000,000 from Aabar-BVI, Enterprise transferred an

additional $95,000,000 to the Blackstone Account, for a total of $170,000,000.


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176. Cistenique and Enterprise were used as intermediaries to pass $455,000,000

from Aabar-BVI to the Blackstone Account.

***

177. In total, between May and December 2012, approximately $1.1 billion was

transferred directly or indirectly from the Aabar-BVI Swiss Account to the Blackstone

Account.

E. AFTER RECEIVING FUNDS FROM AABAR-BVI, BLACKSTONE

DISTRIBUTED APPROXIMATELY $574 MILLION TO OFFICERS

OF IPIC, AABAR, AND 1MDB

178. Once funds were transferred from Aabar-BVI to Blackstone, they were used

to make payments to QUBAISI and HUSSEINY, who served as officers of both Aabar

and Aabar-BVI, to MALAYSIAN OFFICIAL 1, and to 1MDB OFFICER 3. The

distribution of these funds from the Blackstone Account for the personal benefit of

officials involved in the bond deal further evidences a misappropriation of public funds

and the diversion of the bond proceeds from their intended purpose.

179. Neither of the offering circulars for the 2012 bonds contained any

disclosure that a substantial portion of the proceeds of the bonds would be paid to

officials of IPIC, Aabar, and 1MDB. This fact would have been material to the bond

transaction, as it would have alerted investors to the possibility of conflicts of interest

and related-party transactions. The representation that the proceeds of the two bond

deals could be used for “other corporate purposes” of 1MDB does not encompass the use

of those funds for the personal benefit of officials of IPIC, Aabar, or 1MDB.

180. Although both offering circulars also contained boilerplate language about

the limits of any “forward-looking statements,” this boilerplate language similarly did

not encompass the possibility that 1MDB would radically depart from the stated

intended use of the bond proceeds almost immediately after the closing dates for each

offering. More specifically, each offering circular indicated generically that any


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“forward-looking statements” contained in the circular, such as those statements

containing “will” or “expect,” were “reasonable” at the time of the offering circular but

were not meant to give “assurance that these expectations will prove to be correct” in the

future. This boilerplate language was intended, among other things, to give 1MDB

business flexibility to respond to changed circumstances in the future; it did not,

however, contemplate or convey the possibility that 1MDB would almost immediately

begin diverting the proceeds of the bond sale to Aabar-BVI and thereafter to accounts

beneficially owned by officials of 1MDB, IPIC, and Aabar.

1. Blackstone Transferred Approximately $473 Million to an Account

Controlled by QUBAISI

181. Between approximately May 29, 2012, and November 30, 2012, four wires

totaling $472,750,000 were sent from the Blackstone Account to an account at Bank

Privee Edmond de Rothschild (“Bank Rothschild”) in Luxembourg maintained in the

name of Vasco Investments Services SA (“Vasco Account”). These wires were

processed through a correspondent bank account at Standard Chartered Bank in the

United States. As shown in the table below, each of these four wire transfers was made

within a matter of days after the Blackstone Account received funds from Aabar-BVI,

including two of the four that were made within about ten days of Aabar-BVI’s receipt

of funds from 1MDB Energy:

Table 6: Chronology of Wire Transfers to Vasco Investments

in Relation to Other Related Transfers

Date Sending Party Receiving Party Amount

5/22/2012 1MDB Energy Aabar BVI $576,943,490 5/25/2012 Aabar BVI Blackstone $295,000,000 5/29/2012 Blackstone Vasco Investments $158,000,000

7/25/2012 Aabar BVI Blackstone $133,000,000 8/1/2012 Blackstone Vasco Investments $100,750,000


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10/19/2012 1MDB Energy Langat

Aabar BVI $790,354,855

10/22-10/24/2012

Aabar-BVI (via Enterprise) Blackstone $75,000,000

10/22-10/24/2012

Aabar-BVI (via Cistenique) Blackstone $285,000,000

10/23/12 Aabar BVI Blackstone $75,000,000 10/29/12 Blackstone Vasco Investments $129,000,000

11/23/2012 Aabar BVI Blackstone $95,000,000 11/30/2-12 Blackstone Vasco Investments $85,000,000

182. Vasco Investments Services SA is a BVI entity affiliated with QUBAISI,

and QUBAISI is the beneficial owner of the Vasco Account.

183. QUBAISI used a portion of the $472,250,000 transferred into the Vasco

Account from Blackstone to acquire real property in the United States worth roughly

$100 million, as described further in Section V. The assets purchased with funds from

the Vasco Account were not held by or used for the benefit of 1MDB or 1MDB’s

subsidiaries, nor were the assets held by or used for the benefit of IPIC or Aabar.

184. QUBAISI’s receipt of proceeds from 1MDB’s 2012 bond sales for his own

personal benefit is in contravention to his charge as Managing Director of IPIC.

Pursuant to IPIC’s Articles of Association, approved on November 30, 1999, “[n]either

the Chairman nor the other Board members shall have a direct or indirect interest in the

contracts and projects entered into, carried out or intended to be entered into or carried

out by the Company and the Company shall not grant them any financial facilities.” To

the extent that QUBAISI purported to be acting in his capacity as Managing Director of

IPIC in connection with the above-described transactions relating to Aabar-BVI,

including the receipt of 1MDB funds into the Aabar-BVI Swiss Account and the transfer

of funds through the Blackstone Account to his own Vasco Account, he was acting ultra

vires.

185. Upon information and belief, at the time that LOW, TAN, and QUBAISI

transferred or caused the transfer of funds from the Aabar-BVI Swiss Account to


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Blackstone using a U.S. correspondent bank account at Standard Chartered Bank, as well

as at the time that LOW, TAN, and QUBAISI transferred or caused the transfer of funds

from Blackstone to the Vasco Account using a U.S. correspondent bank account at

Standard Chartered Bank, as well as at the time that QUBAISI transferred or caused the

transfer of funds from the Vasco Account into the United States for the purchase of real

property, LOW, TAN, and QUBAISI knew that the funds had been misappropriated

from 1MDB and/or IPIC, and they intended to deprive 1MDB and/or IPIC of ownership

over those funds.

2. Blackstone Transferred $66.6 Million to an Account Controlled by

HUSSEINY

186. Between May and December 2012, entities belonging to HUSSEINY, then-

CEO of Aabar, also received $66,600,000 from the Blackstone Account.

187. Between approximately May 29, 2012, and December 3, 2012, Blackstone

sent four separate wire transfers, totaling $55,000,000, to an account at BHF Bank in

Frankfurt, Germany, held in the name of Rayan Inc. (“Rayan”). Each of these four wire

transfers was processed through a U.S. correspondent bank account at Standard

Chartered Bank. These wire transfers are summarized below:

Table 7: Wire Transfers from Blackstone to Rayan


5/29/2012 Blackstone Rayan $30,000,000




188. HUSSEINY is the beneficial owner of the Rayan Account.

189. The first wire transfer from Blackstone to Rayan in the amount of

$30,000,000 occurred roughly seven days after 1MDB transferred $576,943,490 to

Aabar-BVI, and roughly three days after Aabar-BVI transferred $295,000,000 to


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Blackstone. The same day that Blackstone transferred $30,000,000 to HUSSEINY’s

Rayan Account (that is, May 29, 2012), Blackstone separately transferred $158,000,000

to QUBAISI’s Vasco Account.

190. On or about December 18, 2012 – four days after Aabar-BVI transferred

$39,000,000 into the Blackstone Account – Blackstone sent $10,100,000 to an account at

Bank of America in Texas held in the name of MB Consulting LLC (“MB Consulting

Account”). The payment details on the wire read: “PAYMENT FOR SERVICES.”

191. HUSSEINY is the beneficial owner of the MB Consulting Account and the

only authorized signatory on the account.

192. The MB Consulting Account received another wire transfer of $1,500,000

from the Blackstone Account on or about January 22, 2013.

3. Blackstone Transferred at Least $30 million to an Account Belonging

to MALAYSIAN OFFICIAL 1

193. Blackstone also transferred at least $30,000,000 to an account belonging to

MALAYSIAN OFFICIAL 1 shortly after receiving funds from Aabar-BVI.

194. On or about October 30, 2012 – roughly seven days after Blackstone

received $75,000,000 directly from Aabar-BVI and roughly six days after it received

$360,000,000 indirectly from Aabar-BVI via Enterprise and Cistenique – Blackstone

transferred $5,000,000 into an account at AmBank in Malaysia held in the name of

“AMPRIVATE BANKING MR.”

195. That bank account belongs to MALAYSIAN OFFICIAL 1 and is the same

account that received $20,000,000 from the PETROSAUDI CO-FOUNDER in 2011,

within days of the receipt by the PETROSAUDI CO-FOUNDER of funds from Good

Star, as set forth in Section II.G.

196. On or about November 19, 2012 – less than two weeks after Blackstone

received $95,000,000 from Aabar-BVI via Enterprise – Blackstone transferred

$25,000,000 to the same AMPRIVATE BANKING-MR Account belonging to

MALAYSIAN OFFICIAL 1.


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4. Blackstone Transferred $5 million to an Account Controlled by

1MDB OFFICER 3

197. On or about December 6, 2012, a wire in the amount of $5,000,000 was

sent from the Blackstone Account to an account at Falcon Bank in Zurich maintained in

the name of River Dee International SA (“River Dee Account”).

198. 1MDB OFFICER 3 is the beneficial owner of the River Dee Account at

Falcon Bank.

***

199. On or about February 22, 2013, not long after funds were distributed to the

various officials as described above, the balance of the Blackstone Account fell to zero

and the account had no further transactions thereafter.

200. Blackstone was used as an intermediary to obscure the fact that 1MDB

bond proceeds were being sent from Aabar-BVI – of which QUBAISI and HUSSEINY

were directors – to accounts that were beneficially owned by QUBAISI, HUSSEINY,

MALAYSIAN OFFICIAL 1, and 1MDB OFFICER 3.

201. The funds sent to accounts belonging to QUBAISI, HUSSEINY,

MALAYSIAN OFFICIAL 1, and 1MDB OFFICER 3, as described above, were

unlawfully misappropriated from 1MDB and/or IPIC.

F. AABAR-BVI SENT APPROXIMATELY $238 MILLION TO AN

ACCOUNT CONTROLLED BY AZIZ

202. Between June 18, 2012, and November 4, 2012, $238,000,000 was

transferred directly from the Aabar-BVI Swiss Account to an account controlled by

AZIZ, a relative of MALAYSIAN OFFICIAL 1. From there, the funds were used to

acquire nearly $100 million in real property for the personal benefit of AZIZ and to fund

Red Granite Pictures, AZIZ’s movie production company.


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203. Aabar-BVI sent three wire transfers totaling $238,000,000 to an account at

BSI Singapore held in the name of Red Granite Capital Limited (“Red Granite Capital

Account”). These wires are summarized below:

Table 8: Wire Transfers from Aabar-BVI to Red Granite Capital


6/18/2012 Aabar-BVI Red Granite Capital $133,000,000



204. Red Granite Capital is a BVI-incorporated entity owned by AZIZ. In his

2012 U.S. tax return, a copy of which was obtained from AZIZ’s accounting firm, AZIZ

listed Red Granite Capital’s “principal business or profession” as “Motion Pictures.”

Bank records reflect that AZIZ is also beneficial owner of the Red Granite Capital

Account in Singapore.

1. AZIZ Claimed that Approximately $94.3 Million of the $238 Million

from Aabar-BVI, which AZIZ Used to Purchase Real Estate, Was a

“Gift” from Aabar-BVI

205. AZIZ used more than $94,000,000 of the $238,000,000 that Aabar-BVI

transferred to Red Granite Capital in 2012 to purchase real estate in the United States

and the United Kingdom. AZIZ claimed, including in his 2012 U.S. tax return, that this

money was a “gift” from Aabar-BVI.

206. Shortly after receiving funds from the Aabar-BVI Swiss Account, AZIZ

sent two wires totaling $94,300,000 from his Red Granite Capital Account to the


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Shearman IOLA Account in the United States. The first wire, in the amount of

$58,500,000, was sent on or about June 20, 2012, roughly two days after Red Granite

Capital received $133,000,000 from Aabar-BVI. The second wire, in the amount of

$35,800,000, was sent on or about November 15, 2012, roughly one day after Red

Granite Capital received $45,000,000 from Aabar-BVI. In total, AZIZ caused

$94,300,000 to be transferred from his Red Granite Capital Account to a Shearman

IOLA Account in the United States in which funds were held for his benefit.

207. AZIZ used this $94,300,000 to acquire three pieces of real estate – one in

New York City, one in Beverly Hills, and one in London, United Kingdom.

208. The source and nature of the funds received from Aabar-BVI and used by

AZIZ to purchase real property was a topic of discussion among AZIZ’s accountants at

Nigro Karlin Segal Feldstein & Bolno (“NKSFB”), a Los Angeles-based business and

accounting firm, in connection with the preparation of his 2012 tax return:

a. In an email dated October 13, 2013, a partner at NKSFB wrote: “We

need something for our files that explains why AABAR Investments gave a gift to Riza

for $94,300,050 and it was not income. Is someone from the company related to

Riza? . . .”

b. By email dated the same day, a Managing Director at NKSFB who

acted as the business manager for AZIZ and Red Granite (“Red Granite Business

Manager”), responded: “It is the personal holding company of a family friend.”

c. The partner, in a response sent within an hour, indicated in relevant

part: “The funds came from an investor in Red Granite Capital, I cannot sign the returns

without proof it is not income to Riza. The firm would be put at risk, these numbers are

too high.”

209. In response to this email exchange, the Red Granite Business Manager,

through AZIZ, procured a letter, purporting to be from HUSSEINY and bearing his

signature. The text of that letter reads:


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This letter is intended to confirm that the transfer of $94,500,000.00 which

consisted of a wire transfer on June 18, 2012 to BSI Bank, Ltd. (account

number [XXX]250A) for the benefit of Riza Aziz was intended as a gift.

The transfer was made for no consideration and no services were performed

or gift received for assets. This was a gratuitous transfer made with

detached and disinterested generosity based on our close personal

relationship.12

HUSSEINY’S letter purported to have been sent “[o]n behalf of Aabar

Investments PJS Limited / Solution Century Limited.”

210. Solution Century Limited is an entity affiliated with HUSSEINY and his

wife.

211. The fact that Aabar-BVI purportedly gifted approximately $94 million to

AZIZ on the basis of “disinterested generosity” and the “close personal relationship”

between AZIZ and HUSSEINY further demonstrates that Aabar-BVI was not operating

as a legitimate subsidiary of Aabar or IPIC and that the funds held in the Swiss Aabar-

BVI account were not being held for the benefit of 1MDB, Aabar, or IPIC.

2. Approximately $64 Million in Funds from Aabar-BVI Was Used to

Fund Red Granite Pictures

212. Funds transferred from Aabar-BVI to AZIZ’s Red Granite Capital Account

were also used to fund Red Granite Pictures, an investment unaffiliated with 1MDB,

Aabar, or IPIC.

12 Contrary to the statements in this letter, no wire was sent from Aabar-BVI to Red Granite Capital on June 18, 2012, in the amount of $94,500,00. Rather, as indicated above, the June 18, 2012 wire from Aabar-BVI to Red Granite Capital was in the amount of approximately $133,000,000. The amount claimed to be a gift, $94,500,000, is roughly equal to the amount of money that AZIZ transferred into the United States over a period of approximately five months and used to purchase personal assets.


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213. Red Granite Pictures is a movie production company co-founded by AZIZ

in 2010, which produced several major motion pictures, including “The Wolf of Wall

Street,” “Friends with Kids,” and “Dumb and Dumber To.” Red Granite Pictures was

incorporated in California on September 30, 2010, as Red Granite Productions and

changed its name to Red Granite Pictures on or about June 6, 2011. Red Granite

Pictures’ website lists AZIZ as CEO, founder, chairman, and producer.

214. Between June 20, 2012 – two days after Aabar-BVI sent its first wire to Red

Granite Capital – and November 20, 2012, eleven wires totaling $64,000,000 were sent

from the Red Granite Capital Account to an account at City National Bank in the United

States maintained by Red Granite Pictures.

215. These funds transferred to Red Granite Pictures in the United States were

then used to fund Red Granite Picture’s operations, including the production of the film

“The Wolf of Wall Street,” which was released in the United States on December 25,

2013.

216. The funds sent from Aabar-BVI to Red Granite Capital, which were

thereafter transferred into the United States for use by Red Granite Pictures, did not

represent a legitimate investment by 1MDB, IPIC, or Aabar in Red Granite Pictures.

And balance sheets for Red Granite Pictures and Red Granite Capital show no payments

to 1MDB, IPIC, or Aabar indicative of any investment return.

217. Public statements and media interviews by relevant individuals and entities

also negate the existence of any legitimate investment by 1MDB, IPIC, or Aabar in Red

Granite Pictures. For example, on August 11, 2014, the New York Times published an

article entitled An Audacious Studio Rattles Hollywood, which included an interview

with AZIZ and Red Granite Pictures co-founder Christopher “Joey” McFarland

(“McFarland”). In that article, AZIZ is reported to have identified HUSSEINY as Red

Granite’s principle investor. He is also reported as indicating that HUSSEINY was

investing personal money rather than government funds. This same article appears in the


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“News” section of Red Granite Picture’s website under the heading Riza Aziz & Joey

McFarland Featured in the New York Times.

218. In an article published by the New York Times on February 8, 2015, entitled

Jho Low, Well Connected in Malaysia, Has an Appetite for New York, an attorney for

HUSSEINY is quoted as saying that HUSSEINY’s investment in Red Granite was made

with “personal money.”

219. On April 3, 2016, 1MDB issued a press release, available on its public

website, denying that it had any role in investing, directly or indirectly, in Red Granite

Pictures.

3. AZIZ Transferred at least $41 Million in Funds Received from

Aabar-BVI to an Account That Was Then Used to Pay Gambling

Expenses for Himself, LOW, and TAN

220. Just days after the Red Granite Capital Account received funds from Aabar-

BVI, some of those funds were transferred to an account at Standard Chartered Bank in

Singapore held in the name of Alsen Chance Holdings Limited (“Alsen Chance

Account”). Account opening documents for the Alsen Chance Account list TAN as the

director of Alsen Chance. Shortly thereafter, the Alsen Chance Account was used to pay

gambling expenses for LOW, TAN, AZIZ, and at least one former official from 1MDB.

221. More particularly, on or about June 21, 2012 – roughly three days after

Aabar-BVI transferred $133,000,000 into AZIZ’s Red Granite Capital Account – AZIZ

caused $41,000,000 to be wired from his Red Granite Capital Account to the Alsen

Chance Account.

222. Roughly three weeks later, on or about July 10, 2012, a wire for

$11,000,000 was sent from the Alsen Chance Account to a bank account maintained by

Las Vegas Sands, LLC. Among other things, Las Vegas Sands owns and operates the

Venetian Resort-Hotel-Casino (“Venetian Casino”) in Las Vegas. The payment details

on the wire read: “PLAYER NO [XXX]4296.”


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223. The Venetian Casino used customer account number XXX4296 to identify

LOW. On or about July 10, 2012, $11,000,000 was deposited into LOW’s account at the

Venetian Casino, and records show that LOW gambled there for approximately seven

days beginning on or about that date.

224. On or about July 11, 2012, an additional wire of $2,000,000 was sent from

the Alsen Chance Account to Las Vegas Sands LLC. The payment details on that wire

read: “TAN KIM LOONG PLAYER NO [XXX]8710.” The Venetian Casino Resort

used customer account number XXX8710 to identify TAN.

225. On or about July 15, 2012, LOW withdrew an aggregate cash amount of

$1,150,090 at the Venetian Casino: $500,000 as a withdrawal of deposit, and $650,090

as redemption of casino chips and other gaming instruments. Several individuals

gambled with LOW on this occasion, using his account. These individuals included

AZIZ; Red Granite Pictures co-founder McFarland; a lead actor in “The Wolf of Wall

Street” (“Hollywood Actor 1”); and a former Chief Investment Officer of 1MDB.13

***

226. The use of funds traceable to proceeds of the 2012 1MDB bond sales for

interests unrelated to the business of 1MDB, as described above and in further detail in

Part V below, is not consistent with the intended use of those funds and further

demonstrates that funds transferred from 1MDB to the Aabar-BVI Swiss Account were

unlawfully diverted.

13 LOW, TAN, AZIZ and McFarland gambled together at the Venetian Casino on other occasions, including several times in 2014.


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IV. THE TANORE PHASE: MORE THAN $1.26 BILLION IS


A. EXECUTIVE SUMMARY OF THE TANORE PHASE

227. As set forth in greater detail in the sections that follow, in 2013, more than

$1.26 billion in 1MDB funds that were raised in a third bond offering arranged by

Goldman were misappropriated and fraudulently diverted to bank accounts in

Switzerland and Singapore. In issuing these bonds, 1MDB participated in the

publication and disclosure of an offering circular that again contained material

misrepresentations and omitted material facts necessary to render its representations not

misleading regarding:

How the proceeds of these bond issuances would be used, and

The existence of any related-party transactions connected to the 2013 bond

issuances, including that 1MDB officials and their associates and relatives

would personally benefit from the issuance of these bonds.

228. 1MDB issued an additional $3 billion in Goldman-underwritten bonds in

March 2013. Notwithstanding the fact that the stated purpose of these bonds was to

generate proceeds to invest in a joint venture with Aabar called Abu Dhabi Malaysia

Investment Company (“ADMIC”), more than $1.26 billion in proceeds was diverted to a

bank account held in the name of Tanore Finance Corporation (“Tanore Account”). As

with the Blackstone Account, TAN was the beneficial owner of record for the Tanore

Account. Although the account had no legitimate affiliation with 1MDB or ADMIC,

1MDB OFFICER 3 was an authorized signatory on the Tanore Account.

229. Funds transferred to the Tanore Account were distributed for the benefit of

at least one public official associated with 1MDB. More particularly, very shortly after

the bond offering closed, between approximately March 21, 2013, and March 25, 2013,

$681,000,000 was transferred from the Tanore Account to an account belonging to


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MALAYSIAN OFFICIAL 1. Of this amount, approximately $620 million was returned

to the Tanore Account on or about August 26, 2013.

230. 1MDB funds diverted to the Tanore Account were also used by LOW and

TAN to purchase artwork for their personal benefit and to purchase an interest in the

Park Lane Hotel for the personal benefit of LOW. The disposition of these funds was

not consistent with the intended use of the 2013 bond proceeds nor was it made for the

benefit of 1MDB or ADMIC.

B. IN MARCH 2013, 1MDB ISSUED $3 BILLION IN GOLDMAN-

UNDERWRITTEN BONDS FOR INVESTMENT IN A JOINT

VENTURE WITH AABAR

231. On or about March 12, 2013, 1MDB entered into a 50:50 joint venture with

Aabar known as ADMIC. According to the joint venture agreement (“ADMIC

Agreement”), the formation of ADMIC was “of strategic importance to the government

to government relationship between the Government of the Emirate of Abu Dhabi and

the Government of Malaysia, given the strategic initiatives to be undertaken jointly by

the Parties and the catalytic effect such initiatives are expected to have upon the growth

and development of Malaysia and the Emirate of Abu Dhabi respectively.”14

232. Pursuant to the ADMIC Agreement, ADMIC was to be capitalized by an

investment of $3 billion by 1MDB and $3 billion by Aabar. 1MDB and Aabar, as the

two shareholders of the company, were to adopt an investment plan for ADMIC, to

include a “five (5) year strategic roadmap for the investment policies of the Company,”

as soon as practicable after formation of the company.

14 The Abu Dhabi Malaysia Investment Company (“ADMIC”) is an entity distinct from the Abu Dhabi Malaysia Kuwait Investment Corporation (“ADKMIC”). The former was a purported joint venture between 1MDB and Aabar in which the proceeds of the Project Catalyze bond were supposed to be invested, whereas the latter was an entity owned and controlled by LOW that was used to launder funds, as described in Part II.I above.


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233. The ADMIC Agreement provides that “the Company [i.e., ADMIC] will

open and maintain bank accounts in the name of [ADMIC].” It further provides that

“[a]ll monies of [ADMIC], and all instruments for the payment of money to [ADMIC],

shall be deposited in the bank accounts of [ADMIC].”

234. The joint venture agreement was signed by QUBAISI, as the Chairman of

Aabar, and by the Chairman of 1MDB’s Board of Directors; and it was witnessed by

HUSSEINY, the CEO of Aabar, and by 1MDB OFFICER 2, the CEO of 1MDB. Aabar

appointed QUBAISI as a director of ADMIC and 1MDB appointed its Chief Financial

Officer.

235. At least as early as mid-January 2013, officials at 1MDB enlisted

Goldman’s assistance to finance its capital contribution to the planned joint venture

through privately placed debt securities. 1MDB OFFICER 3 served as a main point of

contact between 1MDB and Goldman on this deal. Within Goldman, this bond

transaction was referred to by the name “Project Catalyze.”

236. In a March 2013 presentation prepared for 1MDB, IPIC, and Aabar in

connection with the deal, Goldman set forth its understanding of 1MDB’s “key

objectives.” Foremost among these were “maintenance of confidentiality during

execution” of the deal and “speed of execution.”

237. 1MDB issued approximately $3 billion in bonds through its third private

placement with Goldman. The closing date for the bond issue was March 19, 2013. The

notes had a 4.4% interest rate and were redeemable in 2023. The offering circular, dated

March 16, 2013, listed the net proceeds of the bond sale, once Goldman’s fees,

commissions, and expenses were deducted, as approximately $2,716,760,000. The

bonds were issued by 1MDB Global Investments Limited (“1MDB Global”), a wholly-

owned subsidiary of 1MDB that was incorporated in the British Virgin Islands on March

8, 2013.

238. The Government of Malaysia provided a “Letter of Support,” dated March

14, 2013, in connection with the Project Catalyze transaction. That Letter of Support


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provided, among other things, that if 1MDB failed to provide adequate capital to ensure

that 1MDB Global was able to service its obligations with respect to the bonds, Malaysia

would then “step-in to inject the necessary capital into the Issuer or make payments to

ensure the Issuer’s obligation in respect of the Debt are fully met.” The Letter of

Support also indicated that, “[t]o the fullest extent permitted by law,” Malaysia would

waive its sovereign immunity and submit itself to the jurisdiction of English courts in

connection with disputes arising out of the letter. The letter is signed by MALAYSIAN

OFFICIAL 1.

239. The offering circular represents that 1MDB Global intended to “either on-

lend all of the net proceeds of this Offering to ADMIC or use the net proceeds of the

offering to fund its investment in ADMIC, which will be a 50:50 joint venture between

the Issuer and Aabar.” The offering circular noted that “ADMIC has yet to adopt a

formal investment plan or establish investment criteria.” It further represented that

“ADMIC does not have any specific investment, merger, stock exchange, asset

acquisition, reorganization, or other business combination under consideration or

contemplation and ADMIC has not, nor has anyone on ADMIC’s behalf, contacted, or

been contacted by, any potential target investment or had any discussions, formal or

otherwise, with respect to such a transaction.” The circular goes on to note that,

“ADMIC does not currently have an investment plan or investment criteria in place. The

Board of Directors intends to adopt an investment plan as soon as is practicable. The

investment plan, and any future investments, will be made with the mutual agreement of

the shareholders of ADMIC,” i.e., Aabar and 1MDB.

240. In a press release issued on April 23, 2013, 1MDB indicated that, “[t]he

proceeds from the US$3 billion capital raised will be utilised for investments in strategic

and important high-impact projects like energy and strategic real estate which are vital to

the long term-economic [sic] growth of both countries.” The press release gave, as an

example of a future investment project, the Tun Razak Exchange (TRX). The Tun


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Razak Exchange is a project to develop a financial center in downtown Kuala Lumpur

that has yet to be completed.

241. In truth, however, as explained below in Paragraphs 243-258, instead of

being used to fund ADMIC, more than $1.26 billion in bond proceeds from the 2013

bond offering were diverted to unrelated overseas shell company accounts, including the

Tanore Account at Falcon Bank in Singapore and an account opened in the name of

Granton Property Holdings Limited at Falcon Bank (“Granton Account”).

242. The offering circular also omitted material facts necessary to makes it

representations regarding the use of the bond proceeds not misleading, in that it failed to

disclose that certain individuals related to 1MDB, including MALAYSIAN OFFICIAL

1, would receive hundreds of millions of dollars from the proceeds of the bond sale

within days of its closing. This fact would have been material to the bond transaction, as

it would have alerted investors to the possibility of conflicts of interest and related-party

transactions. The representation that ADMIC had not determined how all of the bond

proceeds would be used did not encompass using those funds, beginning almost

immediately after the bond issue, for the personal benefit of individuals related to 1MDB

and their associates.

C. FUNDS FROM THE 2013 BOND SALE WERE DIVERTED TO THE

TANORE ACCOUNT

243. Notwithstanding the fact that 1MDB represented in the offering circular and

its press release that the proceeds of the 2013 bond sale would be used to fund ADMIC,

more than $1.26 billion was diverted from the proceeds of the 2013 bond sale through

bank accounts controlled by TAN and held in the name of various entities, including

Tanore Finance Corporation and Granton Property Holdings. This approximately $1.26

billion in funds was neither lent to ADMIC nor used to fund 1MDB’s investment in

ADMIC, as represented in the bond offering circular, but instead was held and used for

the benefit of LOW and his associates, including public officials of 1MDB.


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244. On or about March 19, 2013, a total of $2,721,000,000, representing

proceeds of the bond sale, was transferred from Bank of New York Mellon into the BSI

Lugano account of 1MDB Global in two separate wires of $2,494,250,000 and

$226,750,000. The payments details listed in both SWIFT messages indicate, in relevant

part: “ATTN [SINGAPORE BANKER 1.]” SINGAPORE BANKER 1 is the same

individual whose name appears in Good Star’s corporate records, as noted in Paragraph

45 above. At the time of the wire transfers to 1MDB Global, SINGAPORE BANKER 1

was employed by BSI Bank in Singapore.

245. Between May 21 and 27, 2013, 1MDB Global transferred a total of

$1,590,000,000 from its account at BSI Lugano to accounts belonging to three different

overseas investment funds: Devonshire Capital Growth Fund (“Devonshire”), a fund

located in the British Virgin Islands; Enterprise, a fund located in Curacao; and

Cistenique, another fund located in Curacao (collectively, the “Overseas Investment

Funds”). This money was routed via the clearing company Citco, before being

transferred into the accounts of the Overseas Investment Funds. As described in

Paragraphs 172-176 above, two of these three funds, Cistenique and Enterprise, were

used in 2012 to pass funds traceable to the Project Maximus bond proceeds from Aabar-

BVI to Blackstone.

246. The approximate dates and aggregated amounts of these transfers from

1MDB Global to the three Overseas Investments Funds, via Citco, are set forth below:

Table 9: Wire Transfers from 1MDB Global to Overseas Investment Funds Dates Sending Party Receiving Party Amount3/21/2013 1MDB Global Devonshire $646,464,649

3/21/13 - 3/27/2013 1MDB Global Enterprise $414,756,416

3/21/13 - 3/22/2013 1MDB Global Cistenique $531,090,534

247. Within approximately two days after 1MDB Global began its transfer of

more than $1.5 billion to the Overseas Investment Funds, the Overseas Investment Funds


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collectively transferred a total of $835,000,000 to the Tanore Account. The approximate

dates and amounts of these wires, which passed through a correspondent bank account at

J.P. Morgan Chase in the United States, are summarized below:

Table 10: Wire Transfers from Overseas Investment Funds to Tanore

Date SendingParty

Sending Party Bank

Receiving Party Amount

3/21/2013 Devonshire BSI Bank - Singapore

Tanore $210,000,000

3/22/2013 Enterprise ING Bank - Netherlands

Tanore $250,000,000

3/22/2013 Cistenique ING Bank Netherlands

Tanore $375,000,000

248. TAN opened the Tanore Account on or about November 2, 2012, and he

was originally its sole authorized signatory. Bank records list HUSSEINY as the

“referrer” for the account.

249. On or about March 20, 2013, one day before funds were first credited to the

Tanore Account from the Overseas Investment Funds, 1MDB OFFICER 3 was given

signing authority on the Tanore Account through the execution of a Power of Attorney

form signed by 1MDB OFFICER 3. A copy of the Malaysian passport belonging to

1MDB OFFICER 3 was included in that documentation.

250. Bank statements show that the above-referenced wire transfers from the

Overseas Investment Funds, beginning on or about March 21, 2013, were the first credits

to the Tanore Account.

251. On or about March 21, 2013, Devonshire transferred an additional

$430,000,000 to the Granton Account. Account opening documents for the Granton

Account were signed by TAN. The $430,000,000 wire from Devonshire was processed

through a U.S. correspondent bank account at J.P. Morgan Chase, and bank statements

show that it was the first credit to the Granton Account.


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252. On or about that same day, March 21, 2013, Granton transferred

$430,000,000 – the same amount received from Devonshire – to the Tanore Account.

As set forth above, the Tanore Account and the Granton Account have the same

beneficial owner of record (TAN).

253. Approximately four days later, on or about March 25, 2013, Tanore

transferred $378,000,000 back to the Granton Account.

254. The passage of funds back and forth through accounts held in the name of

different legal entities but having the same stated beneficial owner had no legitimate

commercial purpose but was instead undertaken as a means of layering these

transactions to obscure the nature, source, location, ownership and/or control of the

funds.

255. The transfer of 1MDB funds through the Overseas Investment Funds to the

Tanore and Granton Accounts could not have been accomplished without the

participation or acquiescence of one or more officials at 1MDB.

256. Bank statements for the Tanore Account demonstrate that funds transferred

to the Tanore Account were not thereafter transferred to an account belonging to

ADMIC or used for investment purposes with any apparent legitimate business

connection to ADMIC or 1MDB.

257. Instead, funds from the Tanore Account were sent to an account belonging

to MALAYSIAN OFFICIAL 1, and were also used by TAN and LOW to purchase art.

Funds from the Tanore Account were also used by LOW to acquire a substantial interest

in a luxury hotel in New York City. These uses were inconsistent with the intended

purpose of the bond proceeds as set forth in the offering circular and the April 23, 2013,

1MDB press release.

258. The execution of various SWIFT instructions and other transfer directions,

as well as the preparation of the voluminous documentation that was created in

connection with the diversion of more than $1 billion in funds from 1MDB through the

Overseas Investment Funds to the Tanore Account, would have been difficult to execute


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within such a short period of time, i.e., within days of the bond closing date, without

advance planning. The plan to divert proceeds of the Project Catalyze bond offering to

the Tanore Account pre-dated the March 19, 2013, bond offering.

D. $681 MILLION WAS TRANSFERRED FROM THE TANORE

ACCOUNT TO AN ACCOUNT BELONGING TO MALAYSIAN

OFFICIAL 1

259. Shortly after proceeds of the 2013 bond sale were diverted to the Tanore

Account, $681,000,000 was sent from the Tanore Account to a bank account belonging

to MALAYSIAN OFFICIAL 1.

260. On or about March 21, 2013, Tanore transferred $620,000,000 into an

account at AmBank in Malaysia, whose beneficiary was listed as “AMPRIVATE

BANKING-MR.” On or about March 25, 2013, an additional $61,000,000 was wired

from the Tanore Account to the same account at AmBank, for a total of $681,000,000.

261. This account belonged to MALAYSIAN OFFICIAL 1 and is the same

account that in 2011 received $20 million from the PETROSAUDI CO-FOUNDER that

was traceable to the Good Star Account, as set forth in Section II.G. It is also the same

account that in 2012 received at least $30 million from the Blackstone Account that was

traceable to the Aabar-BVI Swiss Account and the 2012 bond proceeds, as set forth in

Section III.E.3.

262. On or about August 26, 2013, $620,010,715 was wired from a different

account at AmBank to the Tanore Account. This AmBank account also belonged to

MALAYSIAN OFFICIAL 1, and the transfer represented funds from the $681 million

payments that were being returned to Tanore.

263. The Attorney General of Malaysia publicly stated that he conducted an

inquiry into the $681 million in payments. In a press release issued on January 26, 2016,

the Malaysian Attorney General confirmed that, “the sum of USD681 million (RM2.08

billion) [was] transferred into the personal account of [MALAYSIAN OFFICIAL 1]


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between 22.03.2013 and 10.04.2013,” and that, “in August 2013, a sum of USD620

million (RM2.03 billion) was returned by [MALAYSIAN OFFICIAL 1]. . . .” The

Malaysian Attorney General ultimately characterized the payment of $681 million as a

“personal donation to [MALAYSIAN OFFICIAL 1] from the Saudi royal family which

was given to him without any consideration.”

264. Bank records associated with the Tanore Account show that TAN was the

beneficial owner of the Tanore Account, from which the $681,000,000 payments to the

account of MALAYSIAN OFFICIAL 1 were made, and that 1MDB OFFICER 3 was

added as an authorized signor on the Tanore Account roughly one day before the first

wire of $620,000,000 was sent from the Tanore Account to the account of

MALAYSIAN OFFICIAL 1.

E. FROM APPROXIMATELY MAY THROUGH SEPTEMBER 2013,

THE TANORE ACCOUNT WAS USED TO PURCHASE ART FOR

THE PERSONAL BENEFIT OF TAN AND LOW

265. Notwithstanding the fact that 1MDB represented in the offering circular that

the proceeds of the 2013 bond sale would be used for ADMIC, funds from the 2013

bond sale that were diverted through the Tanore Account were used to purchase tens of

millions of dollars in artwork in the United States. This artwork was acquired for the

personal benefit of LOW, TAN and their associates, not for the benefit of 1MDB or

ADMIC.

1. From Approximately May Through September 2013, Tanore

Purchased Approximately $137 Million in Art

266. In early May 2013, TAN opened an account at Christie’s Auction House

(“Christie’s”) in the name of Tanore Finance Corporation. Christie’s is a major art

auction house with a salesroom in New York. The Christie’s account opened for Tanore

was assigned account number XXX7644. In connection with the opening of this

account, TAN submitted a letter to Christie’s from Falcon Bank in Zurich, which was


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dated May 8, 2013 and was signed by the Director and Managing Director of the Bank.

That letter represented that TAN was the beneficial owner of the Tanore Account.

267. On or about May 10, 2013, TAN designated McFarland, co-founder of Red

Granite Pictures, as an agent authorized to bid on behalf of Tanore. McFarland

corresponded with Christie’s about Tanore’s bidding account using his Red Granite

Pictures email account.

268. At auctions held in New York on or about May 13, 2013, and May 15,

2013, Tanore purchased five works of art for a collective total price of $58,348,750.

Specifically, invoices show that at an “11th Hour” Charity Sale on May 13, 2013, Tanore

purchased an unnamed work by Mark Ryden for $714,000 (“Ryden work”) and an

unnamed work by Ed Ruscha for $367,500 (“Ruscha work”). At a Post-War &

Contemporary Evening Sale on May 15, 2013, Tanore purchased Dustheads, by Jean-

Michel Basquiat (“Dustheads”) for $48,843,750; Untitled – Standing Mobile, Alexander

Calder (“Calder Standing Mobile”) for $5,387,750; and Tic Tac Toe, by Alexander

Calder (“Tic Tac Toe”) for $3,035,750.

269. On or about June 4, 2013, $58,348,750 was wire transferred from the

Tanore Account at Falcon Bank to an account at J.P. Morgan Chase in the United States

maintained by Christie’s.

270. On or about June 28, 2013, Tanore purchased two works of art in a private

sale arranged by Christie’s: Concetto spaziale, Attese, by Lucio Fontana (“the Fontana

piece”); and Untitled (Yellow and Blue) by Mark Rothko (“the Rothko piece”). The

invoice set forth three alternative payment amounts, depending on when payment was

made, including: payment of $7,950,000 by July 5, 2013, and payment of the remaining

$71,550,000 by October 3, 2013, for a total purchase price of $79,500,000.

271. On or about July 3, 2013, $7,950,000 was wired from the Tanore Account

to an account at J.P. Morgan Chase in the United States maintained by Christie’s. On or

about September 9, 2013, Tanore wired an additional $71,550,000 to Christie’s account


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at J.P. Morgan Chase. The remittance instructions for both wires contain references to

Tanore’s account number and “INVOICE DATE: 28JUN13.”

272. A Senior Vice President at Christie’s (“Christie’s VP”) who served as a

client representative for Tanore and LOW viewed Tanore and LOW as interchangeable,

and the Christie’s VP believed that LOW was making purchases for his corporate

collection. The Christie’s VP also indicated that McFarland and LOW attended art

auctions in New York together and that at those auctions, McFarland would bid for

Tanore.

273. TAN and LOW took deliberate steps to avoid the appearance of an

association between LOW and Tanore in written documentation. For example, on

November 1, 2013, LOW was copied on an email exchange between TAN and Christie’s

employees about art that Tanore had recently purchased. That same day, LOW

responded: “Please deal with Eric directly re his works. Don’t need to cc me for

confidentiality reasons unless Eric expressly says to do so.”

274. On October 1, 2013, TAN requested that Christie’s reserve a specific

skybox, with seating for twelve guests, at upcoming auctions on November 5 and 12. In

connection with this request for a skybox, a Christie’s employee sent an email to a

colleague stating in relevant part, “It better look like Ceasar Palace [sic] in there . . .The

box is almost more important for the client than the art.”

275. Tanore successfully bid on additional artwork at a November 5, 2013,

Impressionist and Modern Art Evening Sale, including a work by Vincent Van Gogh

entitled La maison de Vincent a Arles (“VAN GOGH ARTWORK”) for $5,485,000.

But Tanore had difficulty making payments for the purchased works due to concerns

raised by the compliance department at Falcon Bank, where Tanore maintained its

account. In a November 21, 2013, email to Christie’s, TAN explained in pertinent part:

I had been on the phone with Falcon Bank (for Tanore Finance Corp) on


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Thursday to resolve this matter as the compliance department has some

questions that required my response about the amount of Art purchases

made recently.

Nothing of concern, but just that I have to provide answers re when I started

being interested in art, intentions for the artworks and going forward the

expected outflows from purchase of Artworks or inflows from sale of

Artworks (if any).

276. In an internal email dated December 9, 2013, with the subject line

“Tanore,” the Christie’s VP directed another Christie’s employee to “send an email” to

Tanore about its continued failure to make payment for the art purchased on November 5

and to “please CC Jho even though he does not like it.”

277. By email dated December 10, 2013, TAN advised two Christie’s employees

that he “spoke to Mr Low and he has agreed to buy the items that I recently auction at

xties n [sic] private sales since he can pay immediately.” On or about December 13,

2013, a Christie’s employee sent TAN an email requesting that he “execute the attached

documents confirming that your obligations will be assumed by Mr. Low.” Among the

attachments to that email were letter agreements voiding certain purchases that Tanore

had made at the November 5 sale, including the VAN GOGH ARTWORK, and letter

agreements for the assignment to LOW of Tanore’s interest in and payment obligations

for those purchases. TAN responded in an email dated December 13, 2013: “Please do

not have Mr Low in any document. I prefer just me null and void. Thank you.”

278. In an email dated December 13, 2013, a Christie’s employee transmitted

several documents to LOW, including copies of the unsigned assignment agreements

described above. LOW responded the same day: “Please remove any reference to

Tanore in the agmt.”


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279. As noted in Paragraph 435-447 below, LOW ultimately purchased the VAN

GOGH ARTWORK for which Tanore was unable to make payment, and he did so using

money traceable to diverted 1MDB funds.

2. Tanore, Through TAN, Gifted Artwork It Purchased from Christie’s

to McFarland and LOW

280. TAN gifted several pieces of artwork purchased with funds from the Tanore

Account to McFarland and LOW, shortly after he acquired them. These “gifts” are

consistent with his having acting as a nominee to purchase art on behalf of others, using

diverted 1MDB funds.

281. On or about August 15, 2013, TAN responded to an email chain between

McFarland and several Christie’s employees on which he was copied: “Please do not

copy me anymore as the Painting has been officially gifted to joey in geneva free port so

it is his.” The subject line of the email was “Re: Mark Ryden work from 11th Hour.”

Based on context, the email indicates that TAN was advising Christie’s that he had gifted

the Mark Ryden work to Joey McFarland.

282. On or about September 26, 2013, a Christie’s employee advised TAN that,

“Ed Ruscha’s studio has reached out to me and asked if we can please let them know

who purchased his work in the 11th Hour auction.” TAN responded, copying

McFarland: “pls talk to joey, it is now owned by him.” McFarland responded further: “I

am [the] owner.”

283. TAN also purported to gift several pieces of artwork to LOW, including

works purchased with funds from the Tanore Account. These “gifts” of art purchased by

Tanore were memorialized in several “gift letters.” While the body of each letter was

identical, each letter referenced a different work or works being gifted, including:

Dustheads; the Rothko work; the Fontana Piece; and Tic Tac Toe.

284. Each of these gift letters was: (a) dated October 2, 2013, (b) addressed to

LOW from TAN and Tanore, and (c) contained the subject line: “RE: GIFT OF ART-

WORK(S) AS STATED BELOW IN CONSIDERATION OF YOUR FRIENDSHIP,


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YOUR CHARITABLE CONTRIBUTION TO THE WORLD, AND PASSION IN

PROMOTING THE UNDERSTANDING AND APPRECIATION OF ART-WORKS.”

285. Each letter included representations from TAN that he is the “sole 100%

beneficial owner of TANORE FINANCE CORP,” and that he is “the legal and

beneficial owner of all the art-work(s) mentioned in this gift letter.”

286. The body of each letter also states:

I wish to gift you ALL of the art-work(s) mentioned in this gift letter in

consideration of the followings [sic]:

• all the generosity, support and trust that you have shared with me over the

course of our friendship, especially during the difficult periods of my life;

and

• your continuous generosity in providing charitable contributions to

advance the well-being and development of our global communities; and

• your passion in promoting the understanding and appreciation of art-

works.

287. Each gift letter closes by stating:

All the art-work(s) gifted to you should not in any event be construed as an

act of corruption since this is against the Company and/or my principles and

I personally do not encourage such practices in any manner whatsoever.

The gift(s) is/are merely a token of appreciation and I am hoping that the

gift(s) to you would encourage you to continue with your good work

globally.

288. LOW also procured an additional letter from TAN, dated April 8, 2014,

confirming the content of the prior October 2, 2012, “Gift Letters.” This letter indicated

that it was prepared in support of LOW’s request for financing from Sotheby’s Financial

Services, for which LOW used certain artwork as collateral (as described further in

Paragraph 445 below). In this April 8, 2014 letter:


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a. TAN identified himself as “Tanore’s 100% shareholder and 100%

beneficial owner” and indicated that Tanore had been liquidated by him.

b. TAN indicated that he “remained the sole legal and beneficial

owner(s) of” the artwork listed in the Gift Letters, “until immediately prior to each

Transfer” to LOW.

c. The letter goes on to indicate, “To the best of my knowledge, as of

the date of this Letter, [LOW] is the sole and absolute owner of the Property, and there

is no other person or entity (including Tanore or myself) that has or can claim any

interest, direct or indirect, in the Property.”

d. The letter is signed by TAN. LOW also signed the letter as having

“[a]cknowledged and [a]greed.”

289. Individuals engaged in money laundering or who otherwise wish to conceal

the true nature of financial transactions will sometimes acquire assets through a nominee,

who thereafter “gifts” the assets to the true intended purchaser.

290. Based on these facts, including LOW’s presence at auctions where Tanore

bid on art and the fact that TAN subsequently gave more than $100 million in art to

LOW for no consideration, Plaintiff alleges that TAN acted as a nominee for LOW when

purchasing art from the Tanore Account to obscure the fact that LOW was acquiring art

with funds from Tanore.

V. THE SUBJECT ASSETS WERE INVOLVED IN AND/OR TRACEABLE

TO THE PROCEEDS OF THE FOREGOING CRIMINAL CONDUCT

291. As set forth below, numerous assets, including the DEFENDANT ASSET,

represent property derived from proceeds traceable to the foregoing criminal conduct, as

well as property involved in money laundering in violation of 18 U.S.C. §§ 1956 and

1957.


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A. LOW PURCHASED THE L’ERMITAGE PROPERTY USING 1MDB

FUNDS FROM GOOD STAR MOVED THROUGH THE

SHEARMAN IOLA ACCOUNT

292. Funds traceable to the $700 million wire transfer from 1MDB to the Good

Star Account were used to acquire the L’ERMITAGE PROPERTY, a luxury hotel in

Beverly Hills, California, in 2010.

293. On January 15, 2010, just months after the $700 million wire transfer from

1MDB to the Good Star Account, a signed grant deed was filed with the Los Angeles

Recorder’s Office (“LA Recorder’s Office”) transferring ownership of L’ERMITAGE

PROPERTY to Wynton Real Estate (Beverly Hills) LLC (“Wynton”). Shearman

represented Wynton in the transaction. The purchase and sale agreement stated that in

addition to the hotel and a fee simple ownership in the land, Wynton acquired

L’ERMITAGE’s business assets, including but not limited to (i) all right, title and

interest in and to all transferable consents, authorizations, variances, waivers, licenses,

permits and approvals from any governmental or quasi-governmental agency, and (ii) all

right, title and interest and to all names related solely to the ownership and operation of

L’ERMITAGE and all related goodwill and domain names (“L’ERMITAGE BUSINESS

ASSETS”).

294. The final settlement statement for the purchase of the L’ERMITAGE

PROPETY shows that Wynton purchased the L’ERMITAGE PROPERTY for

$44,800,000.

295. The website of the L’ERMITAGE PROPERTY states that the

L’ERMITAGE PROPERTY is managed by the Viceroy Hotel Group.

296. Real estate closing documents show that Chicago Title Insurance Company

(“Chicago Title”) was the escrow agent used for the purchase of the L’ERMITAGE

PROPERTY. Taek Szen Low, LOW’s brother, signed the transaction documents on

behalf of Wynton.


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297. According to a document entitled “LOW FAMILY HISTORY AND

BACKGROUND, ORIGINS OF JYNWEL CAPITAL,” which was distributed to

various companies by LOW and his brother, LOW was a member of the Viceroy

Group’s Board and had participated in several major transactions, including “[t]he

acquisition of a 50% stake in [Viceroy].”

298. Likewise, an April 7, 2015, email LOW sent to a Las Vegas casino included

an attachment stating:

[LOW is] proud to be involved in . . . L’Ermitage Beverly Hills and Viceroy

Hotel Group, . . . which have appreciated in value under Mr. Low’s

stewardship . . . .

In another attachment to this same email, LOW confirmed that Jynwel Capital, a

company of which he served as the chief executive officer, owned 100 percent of the

L’ERMITAGE PROPERTY. Jynwel Capital, according to this document, manages the

assets and funds of LOW’s family and “is not licensed to, and does not manage third

party funds.

299. The settlement statement for the sale of the L’ERMITAGE PROPERTY as

well as Shearman IOLA Account records show that, on or about December 21, 2009, a

$10,000,000 deposit was made for the purchase of the L’ERMITAGE PROPERTY and

that the amount due from the seller at closing, on or about January 15, 2010, was

$36,700,000.

300. J.P. Morgan correspondent bank records and Shearman IOLA Account

records show that the Shearman IOLA Account was used to purchase the L’ERMITAGE

PROPERTY. Below is a summary of the credits into and debits from the Shearman

IOLA Account related to the purchase of the L’ERMITAGE PROPERTY:


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Table 11: Transfers Through the Shearman IOLA Account Related to the

the L’ERMITAGE PROPERTY

Date

Credits into Shearman

IOLA Account

Debits from Shearman

IOLA Account


10/21/09GoodStar

Account $148,000,000

12/21/09 $10,000,000 Chicago Title EscrowAccount

1/14/10 $36,700,000 Chicago Title EscrowAccount

301. Shearman internal records show that Shearman segregated its funds into

different internal account numbers and client and matter numbers. Internal Shearman

records show that each of the transactions set forth above were linked to internal

Shearman accounts held for client 36853 (The Wynton Group) and matter 4 (Park

Laurel).

302. On January 14, 2010, $36,700,000, representing the balance of the purchase

price for the L’ERMITAGE PROPERTY, was wired from the Shearman IOLA Account

to an account at Bank of America maintained by Chicago Title.

303. J.P. Morgan correspondent bank records and Shearman IOLA Account

records show that on or about January 20, 2010, approximately $117 million was wired

from the Good Star Account to the Shearman IOLA Account. The notations on the wire

transfer state in part: “C. STAKE V.H. (USD 15M) D. VICEROY ST. M.H(USD

10M).” On or about March 3, 2010, $35,059,875 in additional funds was wired from the

Good Star Account to the Shearman IOLA Account. The notations on the wire transfer

state in part: “INC VICEROY HOTEL GR (USD 7M).”


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304. Delaware Secretary of State records show that Wynton changed its name

to LBH Real Estate (Beverly Hills) LLC on November 4, 2013. In a document filed

with the State of California in connection with this name change, Li Lin Seet signed as

the LBH Real Estate (Beverly Hills) LLC’s manager. Li Lin Seet was an associate of

LOW; he was also an employee of LOW’s company Jynwel Capital.

305. On or about March 27, 2015, a grant deed transferring ownership of the

L’ERMITAGE PROPERTY from Wynton to LBH Real Estate (Beverly Hills) LLC was

signed. This grant deed was filed with the LA Recorder’s Office, on or about June 26,

2015. Title to the L’ERMITAGE PROPERTY remains in the name of LBH Real Estate

(Beverly Hills) LLC.

B. HILLCREST PROPERTY 1 WAS PURCHASED USING 1MDB

FUNDS MOVED THROUGH SHEARMAN IOLA ACCOUNT, AND

AZIZ THEREAFTER PURPORTEDLY PURCHASED THE

PROPERTY FROM LOW WITH 1MDB FUNDS PASSED

THROUGH THE AABAR-BVI ACCOUNT

306. As set forth below, funds traceable to the $700 million wire transfer from

1MDB to the Good Star Account were used in 2010 to purchase HILLCREST

PROPERTY 1 in Beverly Hills, California, and funds traceable to the Aabar-BVI Phase

bond sales were thereafter used to transfer the property from one legal entity to another

legal entity controlled by AZIZ.

307. A grant deed transferring ownership of HILLCREST PROPERTY 1 was

signed on May 17, 2010, and filed with the LA Recorder’s Office on September 30,

2010. Real estate closing documents show that HILLCREST PROPERTY 1 was

purchased by 912 North Hillcrest (BH) LLC for $17,500,000.

308. The original contract purchasers of HILLCREST PROPERTY 1 were RGA

Group, for whom the authorized signer was AZIZ, and 912 North Hillcrest Road (BH)

LLC, for whom the authorized signer was an attorney with Shearman. The amended


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escrow instructions state that RGA Group assigned all of its rights under the purchase

contract for HILLCREST PROPERTY 1 to 912 North Hillcrest Road (BH) LLC.

309. On or about July 27, 2010, a California realtor (“California Realtor”) sent

an email to AZIZ’s Gmail account with the subject line “Hilcrest – Important!” The

email read in relevant part:

Hi Riza – We have received calls from the Seller’s lawyer questioning our

ability to close on schedule. . . Per escrow, we need the remaining

$16,985,342.48 in escrow by Friday . . . and the name of the LLC you will

be taking title under.

310. On or about July 28, 2010, AZIZ responded to the California Realtor by

email: “Spoke to Jho and he will follow-up with you with respect to all that is necessary.

Sincerely, Riza.”

311. On or about July 28, 2010, the California Realtor’s executive assistant, sent

an email to LOW, copying AZIZ. The email read in relevant part:

Good morning Jho -- . . . escrow received and released to the buyer Riza’s

original deposit of $525,000. Riza said he sent another $525,000 on Friday

to replace the original deposit . . . In addition, escrow still needs to know the

name of the LLC Riza wants to take title under – this is extremely urgent as

escrow need [sic] to prepare the Grant Deed.

312. LOW responded to that email on or about July 28, 2010. His email read in

relevant part: “Can u set-up a conf call, so we can all call in jointly with our lawyers

from shearman so we can get up to speed and figure out a solution asap?”

313. The final buyer’s statement for the sale of HILLCREST PROPERTY 1

shows that three deposits in the amount of $525,000 were made for the purchase of


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HILLCREST PROPERTY 1 and that the total balance due to escrow at closing was

$15,917,189.63.

314. The second and third deposits of $525,000 were made to the HILLCREST

PROPERTY 1 escrow account from the Shearman IOLA Account on or about July 28,

2010, and September 2, 2010. In addition, the remaining balance of $15,917,189.63 was

paid to the HILLCREST escrow account from the Shearman IOLA Account on or about

September 28, 2010.

315. Below is a summary of the credits into and debits from the Shearman IOLA

Account related to the purchase of HILLCREST PROPERTY 1 (“HILLCREST

ESCROW”):

Table 12: Transfers Through Shearman IOLA Account Related to HILLCREST PROPERTY 1

Date Approximate Amount of Wire Transfers into Shearman IOLA Account

Debits from ShearmanIOLA Account



$8,600,000

7/28/2010 $525,000 HILLCRESTEscrow Account


$2,800,000


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316.

he

not

ati

on

on

the

$6

54,

00

0 wire from the Good Star Account was “ACQUISITION OF ASSETS/PROPERTY

PAYMENT FO REXTENSION.” The notation on the September 3, 2010, wire of

$8,646,000 from Good Star to the Shearman IOLA Account was “ACQUISITION OF

ASSETS/PROPERTY PARTBALANCE PAYMENT.” The notation on the September

28, 2010 wire of $17,999,985 from Good Star to the Shearman IOLA Account was

“ACQUISITION OF ASSETS /PROPERTY (FULL BALANCE PAYMENT +

RENOVATION).”

317. 912 North Hillcrest Road (BH) LLC, which was the entity used to take title

to HILLCREST PROPERTY 1, was owned by Great Delight Limited (“Great Delight”),

an entity incorporated in the Seychelles. On or about July 10, 2012, Great Delight sold

its interest in “912 North Hillcrest Road (BH) LLC” to Kreger Trading Inc. (“Kreger

Trading”) for approximately $12,000,000. AZIZ signed a purchase and sale agreement

on behalf of Kreger Trading in connection with this transaction. Li Lin Seet, an

associate of LOW, signed on behalf of Great Delight.

318. AZIZ declared himself to be the owner of Kreger Trading in his 2012 U.S.

tax return, a copy of which was obtained from AZIZ’s accounting firm.


$654,000

9/2/2010 $525,000 HILLCRESTEscrow Account


$8,646,000


$17,999,985

9/28/2010 $15,917,190 HILLCREST Escrow Account


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319. AZIZ used funds that had been moved through the Aabar-BVI account to

acquire the entity 912 North Hillcrest Road (BH) LLC, and thereby to acquire the

property at HILLCREST PROPERTY 1.

320. As noted above in paragraph 206, records from Citibank and Red Granite

Pictures show that on or about June 20, 2012, $58,500,000 was wire transferred from the

Red Granite Capital Account to the Shearman IOLA Account in the United States that

held funds on behalf of AZIZ. On or about July 10, 2012, approximately $12,000,000

was transferred from the same IOLA Account to an attorney trust account held by

Sullivan & Cromwell LLP (“Sullivan & Cromwell”) for the purchase of the entity 912

North Hillcrest Road (BH). Sullivan & Cromwell served as counsel to Great Delight in

connection with the transfer of ownership over 912 North Hillcrest Road (BH) LLC.

Internal Shearman records show that each of these transactions set forth above were

linked to internal Shearman accounts held for client 37965 (Riza Aziz).

321. On or about August 13, 2013, Sullivan & Cromwell wire transferred

$10,786,706 to a bank account at BSI Bank in Singapore held by ADKMIC, with

payment details that contained reference to “GREAT DELIGHT LTD.” As noted above,

ADKMIC is an entity owned by LOW. On or about the same day, $10,500,000 was

transferred from the ADKMIC BSI Account to LOW’s personal account at BSI Bank in

Singapore, indicating that it was “PAYMENT TO SHAREHOLDER LTJ.” This

transfer of funds represented a payment from AZIZ to LOW for the purported sale of

HILLCREST PROPERTY 1, through the transfer of ownership over 912 North Hillcrest

Road (BH) LLC.

322. The transfer of HILLCREST PROPERTY 1 was effectuated in 2012

through the sale of a holding company (i.e., 912 North Hillcrest Road (BH) LLC) rather

than the direct sale of the property itself as a means to obscure the ownership, source,

and control of the assets.


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C. LOW PURCHASED THE PARK LAUREL CONDOMINIUM USING

1MDB FUNDS MOVED THROUGH A SHEARMAN IOLA

ACCOUNT

323. Funds traceable to the $700 million wire transfer from 1MDB to the Good

Star Account were used in 2010 to acquire the PARK LAUREL CONDOMINIUM in

New York, New York. The purchase contract for the Park Laurel Condominium listed

the ultimate purchaser as Park Laurel (NYC) Ltd., a BVI corporation,15 the final date of

sale as February 5, 2010, and the final sales price as $23,980,000. Thereafter, in 2012,

an entity controlled by AZIZ acquired the PARK LAUREL CONDOMINIUM from

Park Laurel (NYC) Ltd. for approximately $35,500,000 by using funds traceable to

proceeds of the 2012 bond sales that were misappropriated through the Aabar-BVI Swiss

Account.

324. A real property transfer report filed with the New York City Department of

Finance Office of the City Register (“NYC Register’s Office”) states that a contract for

the sale of the PARK LAUREL CONDOMINIUM was signed on or about October 27,

2009 – less than 30 days after the $700 million wire transfer from 1MDB to the Good

Star Account. The transfer report is signed by an individual affiliated with Ivory

Industrial Investments Ltd. on behalf of the buyer, Park Laurel (NYC) Ltd. The buyer’s

attorney is identified as the same attorney from Shearman who handled the purchase of

HILLCREST PROPERTY 1. The buyer’s real estate agent represented that LOW was

the purchaser.

325. LOW purchased the PARK LAUREL CONDOMINIUM using funds

traceable to the $700 million wire transfer from 1MDB to Good Star. J.P. Morgan

correspondent bank records and Shearman IOLA Account records show that on or about

15 The original contract purchaser of the PARK LAUREL CONDOMINIUM was Assured Alliance Investment Corporation, which, on December 4, 2009, assigned its rights under the contract to Ivory Industrial Investments Ltd., which was identified in Park Laurel (NYC) Ltd. documents as the predecessor name for Park Laurel (NYC) Ltd.


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October 21, 2009, $148,000,000 was wired from the Good Star Account to a Shearman

IOLA Account. On or about February 5, 2010 – the same day as the final sale date listed

in the property transfer records – four bank checks totaling $22,179,049.82 were written

on the Shearman IOLA Account for the purchase of the PARK LAUREL

CONDOMINIUM. Records related to the Shearman IOLA Account included the

notation “Funds From Park Laurel Escrow” with regards to these four checks. Internal

Shearman records show that each of these transactions were linked to internal Shearman

accounts held for client 36853 (The Wynton Group) and matter number 4 (Park Laurel).

The final settlement statement for this purchase demonstrates that checks totaling

$21,626,661.58 were used in the purchase of the PARK LAUREL CONDOMINIUM.

326. On or about July 6, 2012, a contract for the sale of the PARK LAUREL

CONDOMINIUM was executed between Park Laurel (NYC) Ltd. as the seller, and Park

Laurel Acquisition LLC, as the buyer. Shearman represented the buyer, Park Laurel

Acquisition LLC, and Sullivan & Cromwell represented the seller, Park Laurel (NYC)

Ltd., in connection with this transaction. The sales contract was signed by AZIZ on

behalf of the buyer, Park Laurel Acquisition LLC.

327. In a letter dated September 28, 2012, AZIZ requested that the

Condominium Board for the PARK LAUREL CONDOMINIUM waive its first right of

refusal to the transfer of title from Park Laurel (NYC) Ltd. to Park Laurel Acquisition

LLC. In that letter, AZIZ represented that he was the sole director of an entity called

Sorcem Investments Inc. (“Sorcem”) and that Sorcem was the sole member of Park

Laurel Acquisition LLC. AZIZ also represented that upon transfer of title, “the Unit

shall be occupied by Riza Aziz . . . as if Riza was the individual owner of the Unit.”

328. AZIZ claimed ownership of Sorcem in his 2012 U.S. tax return. In those

returns, Sorcem is listed as having the same Los Angeles address that is listed as AZIZ’s

address.

329. Title to the PARK LAUREL CONDOMINIUM was transferred from Park

Laurel (NYC) Ltd. to Park Laurel Acquisition LLC for a purchase price of $33,500,000,


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by deed recorded on or about November 28, 2012. AZIZ signed the relevant

transactional documents on behalf of Park Laurel Acquisition LLC.

330. On or about November 16, 2012, $33,800,000 was transferred from

AZIZ’s Red Granite Capital Account at BSI Bank in Singapore to the Shearman IOLA

Account in the United States. Thereafter, $34,406,188 was wired from the Shearman

IOLA Account to a Sullivan & Cromwell attorney trust account at Citibank on or about

November 19, 2012, the date of the closing for the purchase of the PARK LAUREL

CONDOMONIUM. That same day, $1,049,126 was wired from the Shearman IOLA

Account to Chicago Title Insurance Company for closing costs. According to the

contract of sale, Chicago Title Insurance Company was the escrow agent for the PARK

LAUREL CONDOMINIUM sale. Shearman records indicate that the client on whose

behalf the funds were transferred into and out of the Shearman IOLA Account was

AZIZ.

331. Citibank records show that on or about November 20, 2013, the day after

the closing, $34,406,188 was transferred from the Sullivan & Cromwell attorney trust

account to an account at Rothschild Bank AG held in the name of “Park Laurel NYC

Ltd.,” the seller of the property. This wire transfer represented payment to LOW for the

sale of the PARK LAUREL CONDOMONIUM.

D. LOW PURCHASED THE BOMBADIER JET USING 1MDB FUNDS

PASSED THROUGH SHEARMAN IOLA ACCOUNT

332. In 2010, LOW used funds traceable to the $700 million wire transfer from

1MDB to the Good Star Account to acquire the BOMBARDIER JET, a Bombardier

Global 5000 aircraft bearing manufacturer serial number 9265 and registration number

N689WM, with two Rolls Royce engines bearing manufacturer’s serial numbers 12487

and 12488, for approximately $35,371,335.

333. An aircraft bill of sale dated March 31, 2010, was executed transferring title

and ownership of the BOMBARDIER JET from J.T. Aviation Corp. to Wells Fargo


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Bank Northwest in its capacity as “owner trustee” of a trust created by Wynton Aviation

(Global 5000) Ltd. (hereinafter, “Wynton Aviation”). Wynton Aviation was

incorporated in the British Virgin Islands on or about December 30, 2009.

334. On or about December 31, 2009, J.T. Aviation Corp. and Wynton Aviation

executed a purchase agreement to sell the BOMBARDIER JET to Wynton Aviation less

than three months after the $700 million wire transfer was executed.

335. At the time of the purchase, the BOMBARDIER JET bore FAA

Registration Number N501JT and its beneficial owner was J.T. Aviation Corp.’s

president.

336. Wells Fargo records indicate that Wynton Aviation is a holding company

owned by LOW. According to these records, LOW is this entity’s sole beneficial owner,

controlling party, and legal owner.

337. Escrow and transactional documents relating to the sale of the

BOMBARDIER JET show that Crowe and Dunleavy (“Crowe”), a law firm in

Oklahoma, served as the escrow agent for the purchase of the BOMBARDIER JET.

338. As noted in paragraph 105 above, on or about October 21, 2009, the

Shearman IOLA Account received a wire from the Good Star Account for $148,000,000.

Internal Shearman records show that this transfer was linked to an internal Shearman

account held for client 36853 (The Wynton Group) and matter 4 (Park Laurel). On or

about January 26, 2010, the Shearman IOLA Account received a wire from the Good

Star Account for $117,000,000. Internal Shearman records show that this transfer was

linked to an internal Shearman account held for client 36853 (The Wynton Group) and

matter 8 (General).

339. On or about December 31, 2009, the same day the purchase agreement for

the sale of the BOMBARDIER JET was executed, a wire for approximately $7 million

was sent from the Shearman IOLA Account to an escrow account maintained by Crowe

at Bank of Oklahoma in the name of Crowe and Dunlevy Aircraft Escrow I (“Crowe

Aircraft Escrow Account”). Internal Shearman records show that the $7,000,000


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transfer was linked to an internal Shearman account held for client 36853 (The Wynton

Group) and matter 4 (Park Laurel).

340. On or about March 26, 2010, Wynton Aviation and Wells Fargo Bank

Northwest, N.A. (“Wells Fargo”) entered into a trust agreement whereby Wells Fargo

agreed to serve as the “Owner Trustee” over a trust settled by Wynton Aviation for the

purpose of “ensur[ing] the eligibility of [the BOMBARDIER JET] for United States

registration with the Federal Aviation Administration.”

341. On or about March 29, 2010, a wire for $28,376,000 was sent from the

Shearman IOLA Account to the Crowe Aircraft Escrow Account at Bank of Oklahoma.

Internal Shearman records show that the $28.376 million transfer was linked to an

internal Shearman account held for client 36853 (The Wynton Group) and matter 8

(General).

342. On or about March 31, 2010, a wire for $35,371,375 was sent from the

Crowe Aircraft Escrow Account to an account at Citibank in the name of the seller.

343. On or about April 2, 2010, the FAA issued a Certificate of Registration and

Assignment of Special Registration Numbers Form to Wells Fargo, indicating that the

BOMBARDIER JET’s new FAA Registration Number and tail number would be

N689WM.

E. LOW PURCHASED THE TIME WARNER PENTHOUSE AND

TIME WARNER STORAGE UNIT USING 1MDB FUNDS PASSED

THROUGH THE ADKMIC BSI ACCOUNT

344. As set forth below, funds traceable to the approximately $1 billion diverted

from 1MDB to the Good Star Account were used to purchase the TIME WARNER

PENTHOUSE and TIME WARNER STORAGE UNIT, in New York, New York.

345. Contracts for the sale of the TIME WARNER PENTHOUSE and TIME

WARNER STORAGE UNIT were signed on or about March 22, 2011. A transfer report

filed with the City of New York listed the ultimate purchaser as 80 Columbus Circle


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(NYC) LLC,16 the final date of sale as July 6, 2011, and the final sales price as

$30,550,000. Shearman represented 80 Columbus Circle (NYC) LLC in the purchase of

the TIME WARNER PENTHOUSE and TIME WARNER STORAGE UNIT. The sales

contract and amendments thereto show that Harvey & Hackett was the escrow agent for

the purchase of the TIME WARNER PENTHOUSE and TIME WARNER STORAGE

UNIT. As set forth below, the TIME WARNER PENTHOUSE and TIME WARNER

STORAGE UNIT were purchased with funds traceable to the $700 million wire transfer

and $330 million wire transfers from 1MDB to Good Star.

346. On or about June 28, 2011, $55,000,000 was wire transferred from the

Good Star Account to the ADKMIC BSI Account. On or about the same day, the

following transactions occurred: (i) approximately $54,750,000 was wire transferred

from the ADKMIC BSI Account to an account at BSI Bank held in the name of Low

Hock Peng, a/k/a Larry Low, who is LOW’s father, (the “LHP Account”) and (ii)

approximately $30,000,000 was wire transferred from the LHP Account to an account in

the name of Selune Ltd. at Rothschild Bank AG in Switzerland. LOW represented to

BSI Bank in Singapore that he was the beneficial owner of Selune Ltd.

347. Internal Shearman records show that approximately eight days later, on or

about July 5, 2011, a wire for $27,000,000 was sent from another account at Rothschild

Bank AG in the name of 1/80 Columbus Circle (NYC) to the Shearman IOLA Account.

Plaintiff alleges that these funds originated from Selune’s account at Rothschild Bank

AG and were transferred to the 1/80 Columbus Circle account using an intra-bank

transfer. Internal Shearman records show that this $27,000,000 wire transfer was linked

to an internal Shearman account held for client 37103 (TJL/RT MISCELLANEOUS

16 The original purchaser of the TIME WARNER PENTHOUSE AND TIME WARNER STORAGE UNIT was Sabola Limited, a Seychelles company. A document entitled “Assignment and Assumption of Contract of Sale – Condominium Unit and Purchase Agreement for Personalty” states that Sabola Limited assigned its interest under the sales contract to 80 Columbus Circle (NYC) LLC. The assignment agreement is signed on behalf of Sabola Limited by Li Lin Seet.


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INVESTMENT MATTERS) and matter 6, which was associated with the address of the

TIME WARNER PENTHOUSE.

348. Six bank checks totaling $27,247,677.74 were written on the Shearman

IOLA Account and directed to various parties involved in the purchase of the TIME

WARNER PENTHOUSE and TIME WARNER STORAGE UNIT. Internal Shearman

records show that these checks were linked to an internal Shearman account held for the

same client and matter associated with the incoming wire of $27,000,000 discussed

above. Specifically:

a. A check for $534,625 and a second check for $687,375, both dated

July 5, 2011, were written on the Shearman IOLA Account to Prudential Douglas

Elliman. The final settlement statement shows that $534,625 and $687,375 were

separate line items that were owed to the realtors as a broker’s fee.

b. A check for $17,750 dated July 5, 2011 was written on the Shearman

IOLA Account to New York State Sales Tax. The final settlement statement shows that

$17,750 was owed as “NY Sales Tax.”

c. A check for $15,778,071.79 dated July 5, 2011 was written on the

Shearman IOLA Account to J.P. Morgan Chase. The final settlement statement shows

that $15,778,071.79 was owed to J.P. Morgan Chase, N.A. to pay off a mortgage loan

owed by the former owner of the TIME WARNER PENTHOUSE and TIME WARNER

STORAGE UNIT.

d. A check for $9,829,634.89, dated July 5, 2011, and a second check

for $103.20, dated July 11, 2011, was written on the Shearman IOLA Account to the

former owner of the TIME WARNER PENTHOUSE and TIME WARNER STORAGE

UNIT. Real estate closing documents show that the former owner signed as the seller of

all of the personalty, namely, the furniture, furnishings, and non-fixture items, sold

during the transaction.

e. A check for $400,221.06, dated July 5, 2011, was written on the

Shearman IOLA Account to Chicago Title Insurance Company. The final settlement


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statement shows that $400,221.06 is the sum of all title charges involved in the purchase.

Chicago Title Insurance Company was the title agent on this purchase.

349. A Notice to the Board of Intention to Sell or Lease Condominium Unit was

completed in connection with the TIME WARNER PENTHOUSE and TIME WARNER

STORAGE UNIT. The signed notices for both the TIME WARNER PENTHOUSE and

TIME WARNER STORAGE UNIT identified Low Hock Peng, also known as Larry

Low, LOW’s father, as the occupant of the units. However, an unsigned version of this

notice dated May 15, 2011, identifies that LOW is the “ultimate beneficial owner of each

Sabola Limited and 80 Columbus Circle (NYC) LLC.”

350. According to a realtor involved in the sale of the TIME WARNER

PENTHOUSE and TIME WARNER STORAGE UNIT, LOW was the intended

occupant of the apartment, and Larry Low never even viewed the apartment before the

purchase.

F. LOW PURCHASED THE ORIOLE MANSION USING 1MDB

FUNDS FUNNELED THROUGH THE ADKMIC BSI ACCOUNT

351. The ORIOLE MANSION, located in Beverly Hills, California, was

purchased with funds traceable to the $700 million wire transfer and the $330 million

wire transfers from 1MDB to Good Star.

352. A grant deed transferring ownership of ORIOLE MANSION to Oriole

Drive (LA) LLC, a Delaware corporation, was signed on November 20, 2012, and filed

with the County of Los Angeles on November 30, 2012. Real estate closing documents

show that the purchase price for ORIOLE MANSION was $38,980,000. A Notice of

Completion filed with the LA Recorder’s Office on July 29, 2013, states that

construction of a gym, audio visual upgrade, and miscellaneous work was completed on

ORIOLE MANSION on July 12, 2013.


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353. An attorney at DLA Piper (“DLA Piper”), a U.S.-based law firm, signed the

Notice of Completion on behalf of Oriole Drive (LA) LLC. DLA Piper represented the

buyer in this sale.

354. J.P. Morgan Chase bank records show that on or about November 2, 2012 –

eighteen days prior to the signing of the grant deed transferring ownership of the

ORIOLE MANSION – approximately $153 million was wire transferred from the Good

Star Swiss Account to the ADKMIC BSI Account.

355. Approximately three days later, on or about November 5, 2012,

approximately $153 million was transferred from the ADKMIC BSI Account to the LHP

Account. Two days later, on or about November 7, 2012, approximately $150 million

was transferred from the LHP Singapore Bank Account to an account in LOW’s name at

BSI Bank (“LOW BSI Account”).

356. Citibank records show that on or about November 7, 2012, approximately

$110 million was wired from the LOW BSI Account to an account in the name of Selune

Ltd. at Rothschild Bank AG in Switzerland. As set forth above in paragraph 346, LOW

is the beneficial owner of Selune Ltd.

357. Bank of America records show that on or about November 29, 2012,

$37,882,800 was wired from an account at Rothschild Bank AG in the name of 1/Oriole

Drive (LA) LLC, to an account at Bank of America in the name of Chicago Title.

Records from Bank of America contain a reference notice of: “[XXX]0583-994-

X5TITLE OFFICER[].” The wire instructions for the sale of ORIOLE MANSION

required that $37,859,200 be sent to a Bank of America account in the name of Chicago

Title Company with a reference for “[XXX]0584-994-X59 Title Officer[].” The escrow

agent involved in the purchase of ORIOLE MANSION stated in an email, dated

November 29, 2012 at 11:22 p.m., that the title company had received the wire sufficient

for closing. Records from the escrow agent demonstrate that $1,849 was later credited

back to Oriole Drive (LA) LLC.


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G. LOW PURCHASED GREENE CONDOMINIUM USING 1MDB

FUNDS FUNNELED THROUGH THE ADKMIC BSI ACCOUNT

358. The GREENE CONDOMINIUM, located in New York, New York, was

purchased with funds traceable to the $700 million wire transfer and $330 million wire

transfers from 1MDB to Good Star.

359. A real property transfer report was filed regarding the sale of GREENE

CONDOMINIUM on or about March 5, 2014. The transfer report states that a contract

for the purchase of the GREENE CONDOMINIUM by 118 Greene Street (NYC) LLC, a

New York legal entity, was signed on or about February 5, 2014, that the final date of

sale was February 27, 2014, and that the final purchase price was $13,800,000.

360. On or about November 2, 2012, approximately $153 million was wire

transferred from the Good Star Account to the ADKMIC BSI Account. On or about

November 5, 2012, $153 million was transferred from the ADKMIC BSI Account to the

LHP Account. Two days later, on or about November 7, 2012, approximately $150

million was transferred from the LHP Account to the LOW BSI Account. That same

day, approximately $110 million was wired from the LOW BSI Account to an account in

the name of Selune, Ltd. which, as set forth above, belongs to LOW. This transaction

left approximately $40 million in the LOW BSI Account.

361. Citibank records show that on or about February 5, 2014, $13,800,000 was

wired from the LOW BSI Account to an account at Citibank in the name of DLA Piper.

On or about February 12, 2014, a wire in the amount of $13,721,286 was sent from DLA

Piper to Chicago Title. The payment details for that wire included the address for the

GREENE CONDOMINIUM.

362. According to a realtor familiar with this property, LOW claimed that he was

the owner of this property.


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H. LOW ACQUIRED AN INTEREST IN EMI MUSIC PUBLISHING

USING 1MDB FUNDS DIVERTED THROUGH THE GOOD STAR

ACCOUNT

363. LOW laundered at least approximately $106,666,667 in misappropriated

funds traceable to the Good Star Account to acquire a substantial interest in EMI Music

Publishing Group North America Holdings Inc. (“EMI”), a music publishing company.

Specifically, LOW used these funds to acquire an interest in an entity called Nile

Acquisition Holding Company Ltd. (“EMI Partner A”), a Cayman Islands entity that

partnered with Nile Acquisition LLC (“EMI Partner B”), a Delaware entity, to form DH

Publishing L.P. (the “EMI Partnership”), EMI’s parent company.

364. On or about October 5, 2011, the EMI Partnership, a Cayman Islands

limited partnership, was formed by a consortium of entities consisting of EMI Partner A

and EMI Partner B with the express purpose of acquiring EMI Group Global Limited’s

music publishing business. EMI Partner A is comprised of several investors, including

(i) Mubadala Development Company (“Mubadala”), a sovereign wealth entity owned by

the Government of Abu Dhabi, and (ii) JCL Media (EMI Publishing) Ltd. (also known

as JW Nile (BVI) Ltd.) (“LOW EMI Partner”), a subsidiary of Jynwel Capital Ltd.,

LOW’s financial services firm based in Hong Kong. The LOW EMI Partner was formed

in the British Virgin Islands on or about November 7, 2011. EMI Partner B is owned

jointly by Sony Music Holdings, a New York corporation, and the Estate of Michael

Jackson.

365. On or about November 11, 2011, the EMI Partnership, through BW

Publishing Ltd., an indirect, wholly-owned subsidiary of the EMI Partnership, entered

into a sale and purchase agreement with EMI Group Global Limited, a United Kingdom

company, to acquire EMI.

366. Simultaneously with this acquisition, the EMI Partnership entered into an

Administration Agreement with Sony/ATV Music Publishing LLC (“Sony/ATV”).


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Under the Administration Agreement, Sony/ATV agreed to manage EMI’s day to day

operations, including management and exploitation of EMI’s music catalog, in exchange

for an administration fee.

367. EMI is the world’s third largest music publishing company by revenue.

EMI owns or possesses the rights to publish approximately 2.3 million musical

compositions, both historic and recent, from a variety of genres and a variety of

musicians, including a number of Grammy-winning artists.

368. In connection with its vast music catalog, EMI generates revenue from

several sources including, among others: (i) royalties and fees earned when its songs are

performed publicly; (ii) royalties from paid-streaming services; (iii) royalties and fees

earned in exchange for the right to use songs for physical recordings or digital

downloads; (iv) royalties and fees paid for use of music in timed synchronization with

visual images; and (v) royalties and fees paid for use of a song in stage productions, and

rental of orchestra scores.

1. LOW’s Acquisition of an Interest in EMI PARTNER A

369. EMI Partner A was formed on or about September 29, 2011, in the Cayman

Islands. Initially, EMI Partner A’s sole shareholder was Fifty Sixth Investment

Company Ltd., an entity based in Abu Dhabi. In June 2012, Fifty Sixth Investment

Company Ltd. transferred its sole share in EMI Partner A to Mubadala.

370. On or about June 29, 2012, several entities agreed to subscribe for ordinary

shares in EMI Partner A pursuant to an Investment Agreement Relating to Nile

Acquisition Holding Company Limited (the “EMI Investment Agreement”). These

entities included: (i) Nile Cayman Holding Ltd. (“the “Mubadala Subsidiary”), an entity

owned by Mubadala; (ii) Pub West LLC, a Delaware company; (iii) GSO Capital

Opportunities Fund II (Luxembourg) S.a.r.l.; (iv) Blackstone/GSO Capital Solutions

Offshore Funding (Luxembourg) S.a.r.l.; (v) GSO SJ Partners LP; and (vi) the LOW

EMI Partner.

371. An internal EMI document described the LOW EMI Partner as follows:


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[LOW EMI Partner] is a private equity investment holding company advised by

Jynwel Capital Limited, an investment and advisory firm whose chief executive

officer is [LOW]. [LOW] is a member of [EMI’s] advisory board and served as

[EMI’s] Non-executive Chairman-Asia. Jynwel Capital Limited has advised

[EMI] that [LOW EMI Partner] is owned by trusts for the benefit of the Low

family.

372. Pursuant to the EMI Investment Agreement, several investors agreed to

subscribe for shares in EMI Partner A. Specifically:

a. The Mubadala Subsidiary agreed to acquire approximately 66.2

percent of EMI Partner A’s capital, consisting of 6,620.068965 ordinary shares, for

$320,000,000.

b. The LOW EMI Partner agreed to acquire approximately 22.06

percent of EMI Partner A’s capital, consisting of 2,206.89656 ordinary shares, for

$106,666,667. Li Lin Seet executed the EMI Investment Agreement on behalf of the

LOW EMI Partner in his capacity as its “director.”

c. GSO Capital Opportunities Fund II (Luxembourg) S.a.r.l. agreed to

acquire approximately 5.69 percent of EMI Partner A’s capital, consisting of 569.36719

ordinary shares, for $27,519,414.

d. Blackstone/GSO Capital Solutions Onshore Funding (Luxembourg)

S.a.r.l. agreed to acquire approximately 3.22 percent of EMI Partner A’s capital,

consisting of 322.68240 ordinary shares, for $15,596,316.17

e. Pub West LLC agreed to acquire approximately 1.37 percent of EMI

Partner A’s capital, consisting of 137.93104 ordinary shares, for $6,666,667.

17 Blackstone/GSO Capital Solutions Onshore Funding (Luxembourg) S.a.r.l. is an affiliate of the private investment firm Blackstone Group, an entity discussed previously in Paragraph 171.c. It is unrelated to the BVI shell corporation referred to herein as Blackstone.


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f. Blackstone/GSO Capital Solutions Offshore Funding (Luxembourg)

S.a.r.l. agreed to acquire approximately 1.2 percent of EMI Partner A’s capital,

consisting of 120.15875 ordinary shares, for $5,807,673.

g. GSO SJ Partners LP agreed to acquire approximately 0.22 percent of

EMI Partner A’s capital, consisting of 22.27442 ordinary shares, for $1,076,597.

373. Furthermore, under the EMI Investment Agreement, the LOW EMI Partner

was authorized to play a role in the management and operations of EMI through its

ownership stake in EMI Partner A. Specifically, for instance, the EMI Investment

Agreement provides that the LOW EMI Partner may participate in selecting two of EMI

Partner A’s nine directors.

374. Additionally, under the EMI Investment Agreement, the single largest

individual shareholder within the LOW EMI Partner (the “LOW EMI Principal

Shareholder”) is permitted to play a role in selecting key EMI officials, including EMI

Partner A’s chief executive officer, EMI Partner A’s general counsel, EMI Partner A’s

chief financial officer as well as the EMI Partnership’s officers. According to internal

records from Bank of New York Mellon, where the LOW EMI Partner opened a bank

account, the LOW EMI Partner is a wholly-owned subsidiary of Jynwel Capital Ltd.,

whose sole shareholder is LOW.

375. Additionally, the LOW EMI Principal Shareholder is permitted in his sole

discretion to select the EMI Partnership’s Non-Executive Chairman – Asia. This official

is responsible for “observational oversight of the business operations of the Partnership

in Asia excluding Japan.” EMI’s Non-Executive Chairman – Asia is also invited to

attend “ceremonial events relating to [EMI] and any other related music industry public

events that may be relevant to [EMI], in each case, to which all members of the board of

[the EMI Partnership] are invited.”

376. According to a document entitled “LOW FAMILY HISTORY AND

BACKGROUND, ORIGINS OF JYNWEL CAPITAL,” which was distributed to

various companies by LOW as recently as February 2015, LOW serves as the “Non-


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executive Chairman, Asia, for EMI Music Publishing, [and is] also serving as a member

of [EMI’s] advisory board.” According to this same document, LOW led recent

transactions and advised the Low family investment trusts including one relating to a

“USD2.2 billion acquisition of EMI Music Publishing Group by Sony, Mubadala,

Blackstone Group’s GSO Capital Partners and David Geffen.”

377. The proceeds of the share purchases described in Paragraph 372 above were

used by EMI Partner A to, among other things, make capital contributions to the EMI

Partnership. Each partner’s respective partnership interest in the EMI Partnership is

calculated based upon its percentage of ownership of the partnership’s Class A Units.

According to the Fourth Amended and Restated Exempted Limited Partnership

Agreement of D.H. Publishing L.P., dated March 7, 2014, EMI Partner A made a capital

contribution of $483,333,396 to the EMI Partnership in exchange for 60.166 percent of

the EMI Partnership’s Class A Units. Likewise, EMI Partner B made a capital

contribution of $320,000,038 to the partnership in exchange for 39.834 percent of the

EMI Partnership’s Class A Units.

2. Transfer of Proceeds Through the United States

378. As noted in Section II.I above, on or about June 8, 2012, approximately

$120,000,000 in funds were wired from the Good Star Account to the ADKMIC BSI

Account via a correspondent bank account in the United States at J.P. Morgan.

379. On or about June 11, 2012, a wire of approximately $120,000,000 was sent

from the ADKMIC BSI Account to the LHP Account. That same day, (i) a wire for

$118,000,000 was transmitted from the LHP Account to LOW’s personal account at BSI

Bank; (ii) a wire for $115 million was sent from LOW’s personal account at BSI Bank to

an account in the name of Jynwel Capital at BSI Bank (“Jynwel Account A”); (iii) a wire

for $115 million was sent from Jynwel Account A to another account also maintained in

the name of Jynwel Capital (“Jynwel Accont B”) at BSI Bank; and (iv) a wire for $110

million was sent from Jynwel Account B to an account in the name of the LOW EMI

Partner at BSI Bank (“LOW EMI Account”).


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380. On or about June 13, 2012, an escrow account was opened by LOW EMI

Partner with Bank of New York Mellon (the “EMI Escrow Account”) in the United

States. The account opening documents were signed by Li Lin Seet, who identified

himself as LOW EMI Partner’s director. The opening records also confirm that LOW is

the “100[%] (ultimate)” owner of the LOW EMI Partner and that Jynwel Capital Ltd. is

the “100% direct” owner.

381. On June 26, 2012, a wire for $320,000,000 was sent from Mubadala

Treasury Holding Co. LLC’s account at First Gulf Bank in Abu Dhabi to the EMI

Escrow Account. A notation on the wire instructions indicated that the funds were

intended to be sent to “NILE ACQUISITION HOLDING LTD ESCROW ACCOUNT.”

As noted above at Paragraph 363, “NILE ACQUISTION HOLDING LTD” is the name

of EMI Partner A. Furthermore, as noted above at Paragraph 372, pursuant to the EMI

Investment Agreement, Mubadala agreed to acquire its interest in EMI Partner A for

$320,000,000.

382. That same day, a wire for $106,666,667 was sent from the LOW EMI

Account to the EMI Escrow Account. A notation on this wire also read “NILE

ACQUISITION HOLDING LTD ESCROW ACCOUNT.” As noted above at Paragraph

372, pursuant to the EMI Investment Agreement, the LOW EMI Partner agreed to

acquire its interest in EMI Partner A for $106,666,667.

383. Upon information and belief, the funds transferred by LOW into the EMI

Escrow Account were used to acquire the LOW EMI Partner’s interest in EMI Partner A

and were transmitted in a manner intended to conceal the origin, source, and ownership

of criminal proceeds, based on the following facts and circumstances, among others:

a. Funds were moved through multiple accounts owned by different

entities on or about the same day in an unnecessarily complex manner with no apparent

business purpose.


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b. For instance, there is no apparent commercial reason that LOW

would layer his transaction by funneling the exact same amount of money through six

different bank accounts at the same financial institution on or about the same day.

c. Individuals engaged in money laundering and other unlawful conduct

often pass money through intermediary accounts to conceal the true source of the funds.

d. In materials that LOW submitted to entities with whom he sought to

do business, including materials described below in Paragraphs 432-434, LOW

represented that family resources were a significant source of his wealth. By funneling

money through his father’s account for a brief period of time, LOW created the

appearance that funds in his personal account, which were used to acquire an interest in

EMI Partner A, came from his father rather than from Good Star or ADKMIC.

384. Upon information and belief, at the time LOW transferred misappropriated

funds from his LOW EMI Partner account in Singapore to the EMI Escrow Account, he

knew those funds constituted misappropriated funds and intended to deprive 1MDB of

ownership of those funds.

I. TENS OF MILLIONS OF DOLLARS IN FUNDS DIVERTED FROM

1MDB WERE USED TO FUND RED GRANITE PICTURES AND TO

PRODUCE THE MOTION PICTURE “WOLF OF WALL STREET”

1. LOW Distributed Millions in 1MDB Funds from Good Star to Red

Granite Pictures to Fund “The Wolf of Wall Street”

385. As set forth below, funds from the Good Star Account were transferred into

and through various bank accounts at City National Bank in Los Angeles associated with

Red Granite Pictures, and that money was ultimately used to fund the production of “The

Wolf of Wall Street,” a motion picture produced by Red Granite Pictures and released in

the United States on December 25, 2013. These funds are directly traceable to the $700

million wire transfer and $330 million wire transfers unlawfully diverted from 1MDB to

the Good Star Account.


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386. As set forth above in Sections II.D and II.F, approximately $1.03 billion

was diverted from 1MDB to the Good Star Account between approximately September

30, 2009 and October 25, 2011.

387. Bank account records from City National Bank and correspondent bank

records from J.P. Morgan Chase show that two wires totaling $10,173,104 were sent

from the Good Star Account to a bank account at City National Bank in Los Angeles that

was designated as the “Operating Account” for Red Granite Pictures (“RGP Operating

Account”). AZIZ is a signatory on this account.

388. More specifically, first, on or about April 12, 2011, a wire for $1,173,104

was sent from Good Star to the RGP Operating Account. The notation on this wire read:

“INVESTOR ADVANCES OF USD 1 173 104 OUT OF USD 5 000 000 to RED

GRANITE (MOVIES).” Second, on or about September 10, 2012, a wire for

approximately $9,000,000 was sent from Good Star to the RGP Operating Account. The

notation on this wire read: “ADVANCES FOR WOLF OF WALL STREET MOVIE

FOR ACHL.”

389. On or about September 11, 2012, one day after this second wire transfer,

approximately $9,015,191 was transferred from the RGP Operating Account to another

City National Bank account held in the name of Red Granite Pictures (“RGP Pictures

Account”). On or about September 12, 2012, the same amount – $9,015,191 – was

transferred from the RGP Pictures Account to yet another account at City National Bank

held in the name of TWOWS LLC (“TWOWS Account #1”).

390. “TWOWS” is an acronym for “The Wolf of Wall Street,” and TWOWS

LLC was a special purpose vehicle (“SPV”) created by Red Granite Pictures to produce

“The Wolf of Wall Street.” Delaware state records show that TWOWS LLC was formed

on or about April 16, 2012, and California state records show that AZIZ is one of the

entity’s managers. It is common in the film industry to create an SPV, such as a limited

liability corporation, for the purpose of producing a film. It is also common to open a


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separate bank account or accounts in the name of that SPV and to use the funds in that

account to finance the film’s production.

391. City National Bank records show that the TWOWS Account #1 was used to

pay expenses associated with the production of “The Wolf of Wall Street.” In or around

April 2013, the TWOWS Account #1 was closed and the balance of the funds transferred

to another account at City National Bank also held in the name of TWOWS LLC

(hereinafter, “TWOWS Account #2”). The TWOWS Account #2 was also used to pay

expenses associated with the production of “The Wolf of Wall Street.” Collectively,

these two accounts are referred to herein as the “TWOWS Accounts.”

392. The TWOWS Accounts, in which funds traceable to the Good Star Account

were deposited, were used to pay for production expenses including, but not limited to,

the following: (i) between April 2013 and February 2014, 17 payments totaling

approximately $3.9 million were made to Sikelia Productions, Inc., a production

company belonging to the film’s director; (ii) between May 2012 and April 2014, at least

$48 million was paid to a company that specializes in managing payroll and production

expenses for the film industry; (iii) between July 2012 and May 2014, at least $4.1

million was paid to various visual effects companies; (iv) between May 2012 and April

2014, approximately $2.5 million was paid to the Screen Actors Guild; and (v)

approximately $80,000 was paid to a yacht charter company.

393. LOW, who distributed more than $10 million to Red Granite Pictures from

the Good Star Account, received a “special thanks” full-screen credit in the closing

credits of “The Wolf of Wall Street.”

394. In his acceptance speech upon winning a Golden Globe for his role in “The

Wolf of Wall Street,” Hollywood Actor 1 thanked “the entire production team,” singling

out in particular “Joey, Riz, and Jho,” whom he characterized as “collaborators” on the

film. Upon information and belief, this reference was to Joey McFarland, a co-founder

of Red Granite Pictures, AZIZ, and LOW.


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395. During at least part of the time during which the above-referenced transfers

were made, LOW maintained a Red Granite email account with the domain name

@redgranitepictures.com. This email account was deleted in or around April 2012.

2. Tens of Millions in 1MDB Funds Funneled Through the Aabar-BVI

Account Were Used to Fund Red Granite Pictures and “The Wolf of

Wall Street”

396. Red Granite Pictures, and its production of “The Wolf of Wall Street” in

particular, were also funded with money traceable to the proceeds of the 2012 bond sales

that were diverted through the Aabar-BVI Swiss Account.

397. As set forth in Paragraph 203 above, between June 18, 2012, and November

14, 2012, $238,000,000 in funds traceable to the diverted proceeds of the 2012 1MDB

bond sales was transferred from Aabar-BVI to AZIZ’s Red Granite Capital Account at

BSI Bank in Singapore.

398. Between on or about June 20, 2012 – roughly two days after Aabar-BVI

sent its first wire to Red Granite Capital – and November 20, 2012, eleven wires totaling

$64,000,000 were sent from AZIZ’s Red Granite Capital Account in Singapore to the

RGP Operating Account in the United States.

399. Shortly after each of these eleven wires, Red Granite Capital transferred

funds from its Operating Account to the RGP Pictures Account. Between on or about

June 26, 2012 and November 20, 2012, a total of $54,797,321 was transferred from the

RGP Operating Account to the RGP Pictures Account.

400. In a series of nine transfers between approximately June 27, 2012, and

November 23, 2012, $52,004,162 of this $54,797,321 was then transferred from the RGP

Pictures Account to the TWOWS Account #1, which, as noted above, belonged to the

SPV responsible for producing “The Wolf of Wall Street.”

401. The movement of funds from the Red Granite Capital Account in Singapore

through various accounts associated with Red Granite Pictures to the TWOWS Account

#1 occurred in very close succession. For example, in one series of transfers all


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occurring on or about August 10, 2012: (i) $3,000,000 was sent from the Red Granite

Capital Account to the RGP Operating Account; (ii) $2,831,754 was sent from the Red

Granite Operating Account to the RGP Pictures Account; and (iii) $2,831,754 was sent

from the RGP Pictures Account to the TWOWS #1 Account.

J. LOW ACQUIRED AN INTEREST IN “SYMPHONY CP (PARK

LANE) LLC” AND THE PARK LANE HOTEL USING 1MDB

FUNDS DIVERTED THROUGH THE TANORE ACCOUNT

402. LOW laundered more than $200 million in misappropriated funds traceable

to the 2013 bond sale into an account in the United States belonging to the law firm DLA

Piper. LOW and his brother Low Taek Szen (“Szen”) used those funds to acquire an

interest in an entity called “Symphony CP (Park Lane) LLC” (hereinafter, “the Park

Lane Partnership” or “the Partnership”), a limited liability partnership between the New

York real estate development company Witkoff Group and an investment entity

controlled by LOW. On or about November 25, 2013, the Park Lane Partnership,

through wholly-owned subsidiaries, acquired 36 Central Park South, New York, New

York, 10019, also known as the Park Lane Hotel, for approximately $654,316,305.

1. Transfer of Proceeds into the United States

403. On or about March 21 and 22, 2013, $835,000,000 in funds raised by

1MDB through its March 19, 2013 bond issue was transferred to the Tanore Account at

Falcon Bank in Singapore, after being routed through one of three Overseas Investment

Funds.

404. On or about March 25, 2013, a wire of approximately $378,000,000 was

sent from the Tanore Account to the Granton Account at Falcon Bank in Singapore.

405. On or about the same day the Granton Account received $378,000,000 from

Tanore (that is, March 25, 2013), Granton wired $378,000,000 to an account at RBS

Coutts in Switzerland held in the name of Dragon Market Limited (“Dragon Market”).


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LOW is the beneficial owner of this account. In early November 2013, two additional

wires were sent from the Granton Account to the RBS Coutts account belonging to

Dragon Market (“Dragon Market Account”). All three wires were processed through a

U.S. correspondent bank account at J.P. Morgan Chase. The approximate dates and

amounts of these wires, totaling $518,500,000, are summarized below:

Table 13: Relevant Wire Transfers from Granton to Dragon Dynasty


3/25/2013 Granton Dragon Market $378,000,000



406. Between on or about April 25, 2013, and November 8, 2013, four wires

totaling $476,300,000 were sent from the Dragon Market Account at RBS Coutts to an

account at BSI Bank in Singapore held in the name of Dragon Dynasty Limited

(“Dragon Dynasty”). These four wires were processed through a U.S. correspondent

bank account at J.P. Morgan Chase. The approximate dates and amounts of these wires

are summarized below:

Table 14: Relevant Wire Transfers from Dragon Market to Dragon Dynasty

Date Sending Party Receiving Party Amount4/25/2013 Dragon Market Dragon Dynasty $98,000,000

7/5/2013 Dragon Market Dragon Dynasty $120,000,000



407. Account opening documents for the BSI Bank account maintained by

Dragon Dynasty (“Dragon Dynasty Account”) list LOW as the authorized signatory on

the account. Those documents also list Dragon Market as the director of Dragon

Dynasty.


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408. On or about November 12, 2013, $248,500,000 was wired from the Dragon

Dynasty Account to the LHP Account. On or about the same day that LOW’s father

received $248,500,000 from Dragon Dynasty, $235,500,000 was wired from the LHP

Account to the LOW BSI Account. The wire details for that transfer read: “Gift from

Low Hock Peng to Low Taek Jho.”

409. On or about November 12, 2013, $12,500,000 was wired from the LHP

Account to an account at BSI Bank in Singapore belonging to Szen.

410. On or about November 12, 2013, LOW transferred $205,900,000 from his

account at BSI to an IOLA account at Citibank New York maintained by DLA Piper

(“DLA Piper IOLA Account”). The payment details on the wire read: “LOW TAEK

JHO SETTLEM ENT OF TRUSTS.”

411. On or about November 12, 2013, Szen transferred $12,185,189.32 from his

account at BSI Bank to the same DLA Piper IOLA Account. The payment details on the

wire read: “LOW TAEK SZEN SETTLE MENT OF TRUSTS.”

412. In total, LOW and his brother Szen collectively transferred $218,085,189 to

the same DLA Piper IOLA Account on or about November 12, 2013.

413. Upon information and belief, the funds transferred by LOW and Szen into

the DLA Piper IOLA Account in the United States were moved in a manner intended to

conceal the origin, source, and ownership of criminal proceeds, based on the following

facts and circumstances, among others:

a. Funds were moved through multiple accounts owned by different

entities on or about the same day in an unnecessarily complex manner with no apparent

business purpose.

b. For example, there is no apparent commercial reason that LOW

would transfer funds from Dragon Market, an account he controlled, to Dragon

Dynasty, another account he controlled, and then to an account belonging to his father,

only to have a substantially similar amount of funds transferred from his father’s

account to LOW’s personal account on or about the same day.


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c. Individuals engaged in money laundering and other unlawful conduct

often pass money through intermediary accounts to conceal the true source of the funds.

d. In materials that LOW submitted to entities with whom he sought to

do business, including materials described in Paragraphs 432-434 below, LOW

represented that his family was a significant source of his wealth. By passing money

through his father’s account for a brief period of time, LOW created the appearance that

funds in his personal account, which were used to acquire an interest in the Park Lane

Partnership, came from his father rather than from Dragon Market, Granton, and

Tanore.

414. Upon information and belief, at the time LOW transferred misappropriated

funds (i) from his Dragon Market Account to his Dragon Dynasty Account using a

correspondent bank account at J.P. Morgan in the United States, and (ii) from his

personal account in Singapore to the DLA Piper IOLA Account in the United States, he

knew those funds constituted misappropriated funds and intended to deprive 1MDB of

ownership of those funds.

2. LOW’s Interest in Symphony CP (Park Lane) LLC and the Park Lane

Hotel

415. LOW entered into a limited liability partnership with an affiliate of the

Witkoff Group LLC (“Witkoff Group”), a New York-based real estate investment and

management company, to operate an entity called “Symphony CP (Park Lane) LLC”

(hereinafter, “Park Lane Partnership” or “Partnership”). LOW used funds traceable to

diverted 1MDB funds to invest in the Park Lane Partnership. The formation of the Park

Lane Partnership entailed the creation of numerous legal entities, including many with

similar names. LOW’s investment interest in the Park Lane Partnership was held

through two entities: Symphony CP Investments LLC and Symphony CP Investments

Holdings LLC (collectively, “LOW Investment Entities” or “the Investor”).

416. The Park Lane Partnership was formed as a Delaware limited liability

company with the filing of a Certification of Formation on July 15, 2012, and with the


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execution of an Operating Agreement dated July 16, 2013. As originally constituted, the

Park Lane Partnership represented a partnership between an affiliate of the Witkoff

Group and an entity called Symphony CP Investments LLC, which was designated as the

“Investor.” As of October 25, 2013, LOW, Szen, and Li Lin Seet were designated as the

authorized signatories on behalf of Symphony CP Investments LLC (“LOW Investment

Entity I”).

417. Transactional documents describe the Park Lane Partnership as follows:

Symphony CP (Park Lane), LLC (“Partnership”) is a partnership formed for the

purpose of developing a world class residential condominium tower and the

possibility of developing a 6-star boutique hotel property . . . on the parcels located

at 36 Central Park South (Park Lane Hotel) and 21 West 58th Street . . . . The

Parcels are currently occupied by a 607-room hotel and a 66-unit residential rental

building, respectively.

418. An Amended Operating Agreement for the Partnership was executed on or

about November 25, 2013. Pursuant to that agreement, the Partnership consisted of: (1)

WG Partners 36 CPS LLC, an affiliate of the Witkoff Group (hereinafter, collectively

referred to as “Witkoff”), and (2) Symphony CP Investments Holdings LLC. As the

“Investor,” Symphony CP Investments Holdings LLC was to contribute 85% of the

capital, and Witkoff was to contribute 15%. A then-partner at DLA Piper signed the

Amended Operating Agreement on behalf of Symphony CP Investments Holdings LLC.

419. Symphony CP Investments Holdings LLC (“LOW Investment Entity II”),

the “Investor” in the Partnership, is a Delaware limited liability company having the

same address as DLA Piper in Chicago. According to its operating agreement, also

dated November 25, 2013, it has a single member: Symphony CP Investments LLC, i.e.,

LOW Investment Entity I.

420. LOW and Szen dealt with Witkoff in connection with the Park Lane

Partnership through and on behalf of Jynwel Capital, a Hong Kong based entity founded

by LOW and Szen.


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421. On or about November 20, 2013, a Managing Director of Witkoff (“Witkoff

Managing Director”) sent an email addressed to the “Jynwel Team.” Included on that

email were LOW and Szen; other employees of Jynwel Capital and Witkoff; and lawyers

from DLA Piper and U.S.-based law firm Akin Gump Strauss Hauer & Feld LLP. The

email attached a Capital Call Notice from the Park Lane Partnership, calling for a capital

contribution of $214,776,720.27 for the closing of the Park Lane acquisition, of which

$202,206,876.48 represented the share to be contributed by the “Investor.” The email

directed payment to an account at J.P. Morgan Chase maintained by Commonwealth

Land and Title Insurance Company, the escrow agent used in connection with the

acquisition of the Park Lane Hotel.

422. Bank records obtained from Citibank show that on or about November 25,

2013, DLA Piper transferred $202,206,876.48 from a DLA Piper IOLA Account at

Citibank to a bank account at J.P. Morgan Chase maintained by Commonwealth Land

Title Insurance Company. These funds were sent from the same account into which

LOW transferred approximately $205,900,000 on or about November 12, 2013.

423. Documents pertaining to the formation of the Park Lane Partnership,

including electronic communications, reveal that the Partnership was structured to permit

the possibility that Mubadala Development Company PJSC (“Mubadala”) would join

Jynwel as an investor in the LOW Investment Entities after the initial capitalization of

the Partnership. Mubadala is an investment vehicle wholly-owned by the Government of

Abu Dhabi. An organizational chart prepared by LOW’s counsel after the initial

capitalization appears to indicate that Mubadala did subsequently acquire some indirect

interest in Symphony CP Investments LLC, and thus in the Park Lane Partnership,

through various holding companies. That same organizational chart also shows than an

entity called “Virtue Trustees (Switzerland) AG” holds an interest in Symphony CP

Investments LLC and the Partnership through various holding companies.


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424. In a May 2016 letter, the directors of Virtue Trustees (Switzerland) AG

represented that “Symphony CP Investments LLC is owned by Virtue Trustees

(Switzerland) AG as Trustee of a trust for the benefit of the Low family.”

425. The Investor’s total contribution to the Partnership to date has been

approximately $380 million.

426. As recently as February 2016, LOW paid a capital call on behalf of the

“Investor” in the amount of approximately $2,956,162.03. Specifically, on or about

February 10, 2016, LOW transferred $3,206,162.03 from an account held in his name at

Amicorp Bank and Trust in Hong Kong to the M&T Bank account held by Symphony

CP Investments LLC, one of the LOW Investment Entities. On or about February 11,

2016, Symphony CP Investments LLC sent $2,956,162.03 through an intrabank transfer

to the M&T Bank account held by the Park Lane Partnership.

427. LOW and the “Investor” failed to make the most recent capital call dated

May 5, 2016. On May 20, 2016, Witkoff notified the “Investor” that it was in default.

3. The Park Lane Partnership’s Acquisition of the Park Lane Hotel

428. On or about July 16, 2013, the Park Lane Partnership entered into a

Purchase and Sale Agreement with the Leona M. and Harry B. Helmsley Charitable

Trust and the Park Lane Hotel, Inc., for the purchase of 36 Central Park South, then

known as the Helmsley Park Lane Hotel, for $660,000,000. The Park Lane Partnership

assigned its interests in that purchase agreement to a wholly-owned subsidiary,

“Symphony CP (Park Lane) Owner LLC.”

429. Real property transfer documents from the New York City Department of

Finance, Office of the City Register, indicate that, “Symphony CP (Park Lane) Owner

LLC” acquired 36 Central Park South on November 25, 2013, for $654,316,305. The

deed was recorded on December 5, 2013. The Park Lane Partnership secured a

mortgage on the property from Wells Fargo Bank for a maximum principle amount of

$291,700,000, with an initial loan of $266,700,000. The mortgage in the amount of

$266,700,000 was recorded on December 5, 2013.


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430. “Symphony CP (Park Lane) Owner LLC,” the entity used to acquire the

Park Lane Hotel, is wholly-owned, through multiple subsidiaries, by the Park Lane

Partnership.

4. Low Acquired an Interest in the Park Lane Hotel for His Personal

Benefit Rather Than That of 1MDB

431. LOW, Szen, and Jynwel Capital did not invest in the Park Lane Partnership

for the benefit of 1MDB or ADMIC. Neither 1MDB nor ADMIC holds any interest in

the Park Lane Partnership, and there is no indication that any proceeds of the investment

in the Partnership have been returned to 1MDB or ADMIC. Rather, LOW and Szen

invested in the Partnership, through Jynwel, solely on behalf of themselves and their

family, and LOW falsely claimed to be investing personal family funds, not 1MDB

funds.

432. On October 16, 2013, a Principal at Witkoff who worked on the Partnership

deal sent an email to LOW and Szen stating in relevant part:

We are getting down to the end with the lender, they are asking for specifics

on where the money on your side of the deal is coming from given it is

international money . . ., can you please provide specifics to me so I can

forward it to the lender.

LOW responded the same day: “Low Family Capital built from our Grandparents, down

to the third generation now.” In reply, the Witkoff Principal wrote: “Ok, thanks Jho, just

didn’t know if there were any other minority investors on your side, I will let the bank

know.” LOW confirmed in response, in relevant part: “Just all the family.”

433. In an email dated October 17, 2013, the Witkoff Managing Director advised

individuals at Wells Fargo, where the Park Lane Partnership was at the time seeking a

mortgage, that “Jynwel serves as the advisory team to the Investor (Jho and Szen Low).

Their capital derives from a family trust which Jho and Szen control.”

434. Promotional material about Jynwel Capital, which LOW relied on to

demonstrate the purported nature and source of his wealth to other entities with which he


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sought to do business, characterized Jynwel’s investment in the Park Lane Hotel as one

of its “key investments.” Another background document relied on by LOW to show the

origins of his wealth indicated that Jynwel “provides services to the Low Family

Investment Trusts” and “does not manage third party funds.” This same material claims

that LOW is a “third generation steward” of family wealth.

K. LOW PURCHASED THE VAN GOGH ARTWORK USING 1MDB

FUNDS FUNNELED THROUGH THE DRAGON MARKET

ACCOUNT, DRAGON DYNASTY ACCOUNT, AND ADKMIC BSI

ACCOUNT

435. LOW used funds traceable to the Tanore Phase in 2013 to acquire the VAN

GOGH ARTWORK, a 76 x 54 cm pen and ink drawing by Vincent Van Gogh entitled

La maison de Vincent a Arles.

436. As noted in Paragraphs 277-278 above, Tanore successfully bid on the

VAN GOGH ARTWORK at a November 5, 2013, Christie’s auction, for a purchase

price of $5,485,000. After Tanore was unable to make payments for the artwork, TAN

informed Christie’s that LOW would be purchasing the artwork instead. Christie’s

issued LOW an invoice for $5,485,000 on December 20, 2013.

437. LOW purchased the VAN GOGH ARTWORK using funds diverted from

the 2013 bond sale. As noted above in Paragraphs 404-405, on or about March 25, 2013,

a wire of $378,000,000 was sent from the Tanore Account to the Granton Account at

Falcon Bank in Singapore. On or about that same day, a wire of $378,000,000 was sent

from the Granton Account to the Dragon Market Account. As noted above in Paragraph

408 and Table 13, on November 5 and 6, 2013, two additional wires totaling

$140,500,000 were sent from the Granton Account to the Dragon Market Account. In

total $518,500,000 was transferred from the Granton Account to the Dragon Market

Account between March 25, 2013 and November 6, 2013.


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438. As noted above in Paragraph 406, between April 25, 2013 and November 8,

2013, four wires totaling $476,300,000 were sent from the Dragon Market Account to

the Dragon Dynasty Account. This included a wire in the amount of $9,800,000 on or

about September 10, 2013. Three days later, on or about September 13, 2013, a wire of

$9,300,000 was sent from the Dragon Dynasty Account to the ADKMIC BSI Account.

That same day, $9,300,000 was sent from the ADKMIC BSI Account to LOW’s

personal account at BSI Bank in Singapore.

439. As noted in Paragraph 408 above, LOW also received funds into his

personal account at BSI Bank in Singapore indirectly from the Dragon Dynasty Account

via his father’s account. On or about November 12, 2013, $248,500,000 was wired from

the Dragon Dynasty Account to the LHP Account, which, on the same day, transferred

$235,500,000 to LOW’s personal bank account at BSI Bank in Singapore.

440. On or about December 20, 2013, a wire of $7,288,667 was sent from the

LOW BSI Account to Christie’s bank account at J.P. Morgan Chase in the United States.

A second wire of $5,120,000 was sent on or about January 22, 2014, to the same

Christie’s account. The payment details for that wire read: “NOTES: NOV 2013

AUCTIONS: VAN GOGH (2ND PAYMENT USD1,583,333.00) AND BASQUIAT

(2ND PAYMENT USD3,533,333.33.) A third wire of $5,117,000 was sent from the

LOW BSI Account to Christie’s on or about February 5, 2014, with the payment details:

“NOTES: FINAL PAYMENT FOR AUCTION 2013 (VAN GOGH AND

BASQUIAT.)18

441. A Christie’s invoice for the VAN GOGH ARTWORK, marked “PAID,”

reflects that LOW paid $5,485,000 for the VAN GOGH ARTWORK.

442. On March 13, 2014, LOW sent an email to an employee at SNS Fine Art

(the “SNS Employee”), an art dealer, inquiring: “Do you know of any banks, financiers

18 On February 4, 2014, the LOW BSI Account received a wire transfer of $334,102,534 from the LHP Account.


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who take art as security for raise bank loans for investments/acquisitions of more

artwork?” Later that same day, LOW explained further in another email to the SNS

Employee which read in relevant part, “Just looking to borrow based on asset value. . .

Abt usd 330m, so looking for 50%. Only would like facility for 6 months to a year, so I

free up cash . . . Can you let me know who can do it? And the top 2 or 3 that would be v

aggressive.”

443. That same day, the SNS Employee responded to LOW, stating in relevant

part, “I think those sort of numbers would scare off Sotheby’s . . .” and suggested that

LOW consider other financial institutions. LOW responded in an email, “Yes pls. Prefer

the boutique banks that can move fast vs the large ones like JPM.” In another email

dated March 13, 2014, LOW explained to the SNS Employee what types of lenders he

would be looking to utilize. Specifically, LOW requested that the SNS Employee look

for “Quick, fast and aggressive and ones you know v well. Out of Europe or usa or

middle east not asia. Have abt usd350m and looking for line of 50% so I can buy more.”

444. In discussing the issue of using artworks as collateral to obtain funding

from a creditor, LOW sent another email to the SNS Employee on March 14, 2014,

explaining that the lender “can take all the art no problems. All in Geneva free port.

Speed is the most important and one with a fairly quick and relaxed kyc process.

Thanks!”

445. In April 2014, LOW used several pieces of art, including the VAN GOGH

ARTWORK, to secure a loan from Sotheby’s Financial Services, Inc. (“Sotheby’s

Financial”), a Sotheby’s affiliate. The loan, with a principal amount of $107 million,

was obtained by Triple Eight Ltd., a Cayman Island entity wholly-owned by LOW.

LOW secured the loan by pledging to Sotheby’s, as collateral, all right and title to 17

pieces of art, which the April 14, 2014 Loan Agreement estimated to be worth between

$191.6 and $258.3 million. The list of art used as collateral to secure the loan included

the VAN GOGH ARTWORK, as well as several works originally purchased by Tanore


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in May and June 2012 and “gifted” to LOW in October 2013, as described in Section

IV.E above.

446. Disbursement records show that Sotheby’s Financial disbursed

$105,188,721.95 to an account at Caledonia Bank Ltd. in the Cayman Islands held in the

name of Triple Eight Ltd. on or about April 10, 2014.

447. After disbursing the loan amount to LOW, Sotheby’s sold some of the

paintings that LOW had pledged as collateral for the loan at LOW’s direction. By May

2016, Sotheby’s had recovered sufficient funds from the proceeds of the sale of certain

pledged art, including the painting Dustheads discussed in Paragraph 268, to cover the

outstanding balance of the loan. Upon repayment of the loan, Sotheby’s released its

security interest in the artwork. As of June 7, 2016, Sotheby’s still had the VAN GOGH

ARTWORK in its possession.

L. LOW PURCHASED THE SAINT GEORGES PAINTING USING

1MDB FUNDS FUNNELED THROUGH THE DRAGON MARKET

AND DRAGON DYNASTY ACCOUNTS

448. LOW used funds traceable to the Tanore Phase in 2013 to acquire the

SAINT GEORGES PAINTING, a 25½ x 36¼ inch (65 x 92 cm) oil on canvas painting

entitled “Saint-Georges Majeur.” The painting was signed and dated “Claude Monet

1908” in the lower left-hand corner of the painting.

449. LOW purchased the SAINT GEORGES PAINTING from SNS Fine Arts

(“SNS”), an art dealer, for a purchase price of $35,000,000 on December 18, 2013.

450. SNS issued LOW an invoice for the SAINT GEORGES PAINTING, stating

that LOW owed SNS an initial down payment of $5,000,000 on or before December 25,

2013. The remaining $30,000,000 was due on or before January 31, 2014.

451. On December 20, 2013, LOW sent an email to the SNS Employee asking,

“Wld you be kind enough to send me an image of this artwork so I can show my family?

Thank you.”


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452. On December 22, 2013, the SNS Employee sent an email to LOW stating in

pertinent part, “Dear Jho, Congratulations on acquiring Monet’s stunning “Saint-Georges

Majeur’ . . . which, as you know, once belonged to the Art Institute of Chicago and is

also on the cover of Phillipe Piguet’s book, ‘Monet et Venise.’”

453. LOW paid for the VAN GOGH ARTWORK using funds diverted from the

2013 bond sale. As noted in Paragraphs 404-405 above: (i) a wire in the amount of

$378,000,000 was sent from the Tanore Account to the Granton Account on March 25,

2013; and (ii) three wires totaling $518,500,000 were sent from the Granton Account to

the Dragon Market Account between March 25, 2013 and November 6, 2013.






That same day, $9,300,000 was sent from the ADKMIC BSI Account to the LOW BSI

Account.





$235,500,000 to the LOW BSI Account.

456. On December 23, 2013, a $5,000,000 wire was sent from the LOW BSI

Account to SNS Fine Arts’ account at J.P. Morgan Chase in connection with the

purchase of the SAINT GEORGES PAINTING.

457. On December 23, 2013, the SNS Employee sent an email to LOW

confirming that SNS received the $5 million payment. The subject line of the email

read, “Re: Fw: Swift advice on USD 5 mio value 23.12.2013.” The email stated in

pertinent part, “Dear Jho— I just received notification that the $5M are pending in our


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account. Congratulations, it’s a marvelous painting. I would love to send you a copy of

the Monet in Venice book, should I send it to the address of your invoice in HK?”

458. On February 5, 2014, a wire for $30,000,000 was sent from the LOW BSI

Account to SNS Fine Arts’ account at J.P. Morgan Chase.

459. On January 28, 2014, the SNS employee sent an email to LOW. The email

read in relevant part, “Dear Jho, . . . We are currently preparing the crate and shipment

for Claude Monet’s stunning Venice view ‘Saint-Georges Majeur’. Could you kindly

confirm the name, address and contact information of where you would like us to

arrange to send it please.” The following day, LOW responded to the SNS employee

and informed him that he would like to have the painting placed in LOW’s storage in

“Geneva Free Port,” in Switzerland.

460. The SAINT GEORGES PAINTING was one of the pieces of art that LOW

used as collateral to secure the loan from Sotheby’s Financial to Triple Eight in April

2014, as referenced in Paragraph 445. After the balance of that loan was paid through

the sale of other pledged artwork, as set forth in Paragraph 447, Sotheby’s released its

security interest in the SAINT GEORGES PAINTING. As of June 7, 2016, Sotheby’s

still had the SAINT GEORGES PAINTING in its possession.

M. LOW PURCHASED THE NYMPHEAS PAINTING USING 1MDB

FUNDS FUNNELED THROUGH THE DRAGON MARKET AND

DRAGON DYNASTY ACCOUNTS

461. LOW used funds traceable to the Tanore Phase in 2013 to acquire the

NYMPHEAS PAINTING, a 130 x 200 cm oil on canvas painting entitled “Nympheas

avec Reflets de Hautes Herbes.” The painting was stamped “Claude Monet” in the lower

right-hand corner of the painting.

462. LOW purchased the NYMPHEAS PAINTING on June 23, 2014, from

Sotheby’s for a purchase price of £33,829,500 British Pounds (“GBP”) (equivalent to

approximately $57.5 million).


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463. As noted in Paragraphs 404-405 above: (i) a wire in the amount of

$378,000,000 was sent from the Tanore Account to the Granton Account on March 25,

2013; and (ii) three wires totaling $518,500,000 were sent from the Granton Account to

the Dragon Market Account between March 25, 2013 and November 6, 2013.






That same day, $9,300,000 was sent from the ADKMIC BSI Account to the LOW BSI

Account.





$235,500,000 to the LOW BSI Account.

466. On July 31, 2014, a wire for £3,183,997 GBP (equivalent to approximately

$5.4 million) was sent from the LOW BSI Account to an account maintained by

Sotheby’s as an initial payment for the NYMPHEAS PAINTING.

467. On October 21, 2014, another wire for $65,000,000 was sent from the

Dragon Market Account to the Dragon Dynasty Account. This wire was processed

through a U.S. correspondent bank account at J.P. Morgan Chase.19

468. Two days later, on October 23, 2014, a wire for $65,000,000 was sent from

the Dragon Dynasty Account to the LOW BSI Account. That same day, a wire for

£28,500,000 GBP (equivalent to approximately $45.7 million) was wired from the LOW

19 On October 16, 2014, a wire for $72,510,000 was sent from an account in the name of TKIL Capital Partners Ltd. at AmiCorp Bank in Barbados to the Dragon Market Account.


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BSI Account to Sotheby’s in the United Kingdom to acquire the NYMPHEAS

PAINTING.

469. On or about March 17, 2015, LOW, Triple Eight, and Sotheby’s Financial

executed an amendment to the April 2014 loan agreement discussed in Paragraph 445

(“Loan Amendment”). Among other things, the Loan Amendment extended the maturity

date of the loan, released certain pledged artwork, and added additional artwork as

collateral to secure the original loan. The NYMPHEAS PAINTING was among the

works of art that LOW added as collateral in that Loan Amendment. Pursuant to the

Loan Amendment, LOW was required to surrender possession of the NYMPHEAS

PAINTING to Sotheby’s. After the balance of the loan was paid through the sale of

other pledged artwork, as set forth in Paragraph 447, Sotheby’s released its security

interest in the NYMPHEAS PAINTING. As of June 7, 2016, Sotheby’s still had the

NYMPHEAS PAINTING in its possession.

N. QUBAISI ACQUIRED THE WALKER TOWER PENTHOUSE

USING FUNDS DIVERTED THROUGH THE AABAR-BVI SWISS

ACCOUNT

470. Funds traceable to the proceeds of the 2012 bond sales, which were diverted

from 1MDB and/or IPIC, were used by QUBAISI to acquire a penthouse condominium

unit in the Walker Tower in New York, New York. The property was purchased by an

entity called 212 West 18th Street LLC on January 21, 2014 for approximately

$50,912,500. Greenberg Traurig, LLP, a U.S.-based law firm, represented 212 West

18th Street LLC in connection with the purchase.

471. As noted in Paragraphs 143-154 above, beginning on or about May 22,

2012, the Aabar-BVI Swiss Account received approximately $1.367 billion in funds

traceable to the 2012 bond sales. And, as set forth in Section III.D above, between May

and November 2012, Aabar-BVI, of which QUBAISI was a purported director, sent five

wires totaling approximately $637,000,000 from its account at BSI Lugano in


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Switzerland to the Blackstone Account at Standard Chartered in Singapore. On or about

October 24, 2012, Aabar-BVI also caused an additional $366,000,000 to be sent to

Blackstone via intermediaries.

472. As described in Paragraph 181 above, between on or about May 29, 2012,

and November 30, 2012, four wires totaling $472,750,000 were sent from the Blackstone

Account to the Vasco Account.

473. On or about February 20, 2013, $20,750,000 was wired from the Good Star

Account to the Vasco Account.

474. On October 28, 2013, a wire of $15,000,000 was sent from the Vasco

Account to an account at Citibank in the United States maintained by Greenberg Traurig.

The payment details on the wire read: “WALKER TOWER, PH1 CLIENT/MATTER

NO: 148376/010100 ATTORNEY NAME:” followed by the name of the attorney at

Greenberg Traurig who represented the buyer in the transaction.

475. On January 21, 2014, another wire of $36,596,281 was sent from the Vasco

Account to the same Citibank account maintained by Greenberg Traurig. The payment

details on the wire indicated, in relevant part: “WALKER TOWER ON BEHALF AL

QUBAISI FAMILY TRUST FOR LOAN TO AL QUBAISI212 WEST 18 STREET

LLC”; the payment details also included the name of the attorney at Greenberg Traurig

who represented the buyer in the transaction.

476. On October 30, 2013, QUBAISI entered into a Purchase Agreement with

“SMJ 210 West 18 LLC,” a Delaware limited liability company, for the purchase of

THE WALKER TOWER PENTHOUSE for the price of $50,000,000. The agreement is

signed by QUBAISI as the purchaser.

477. On January 21, 2014, QUBAISI assigned his interest in the Purchase

Agreement to “212 West 18th Street LLC f/k/a Al Qubaisi 212 West 18th Street LLC.”

QUBAISI signed on behalf of himself as the assignor, and also on behalf of “Al Qubaisi

212 West 18th Street LLC” as the assignee. Neil Moffitt (“Moffitt”) signed as the

Manager of “Al Qubaisi 212 West 18th Street LLC.”


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478. The property was purchased by “212 West 18th Street LLC” by deed dated

January 21, 2014, for a purchase price of $50,912,500. Moffitt signed as the Manager of

“212 West 18th Street LLC.” Moffitt manages or managed several properties on behalf

of QUBAISI.

479. On March 9, 2015, $158,664.71 was transferred from the Vasco Account to

an account at J.P. Morgan Chase maintained by Moffitt. Payment details on the wire

read: “WALKER TOWER COMPLETE EXPENSES . . . TOTAL TO 2.20.2015.”

O. QUBAISI ACQUIRED THE LAUREL BEVERLY HILLS MANSION

USING FUNDS DIVERTED THROUGH THE AABAR-BVI SWISS

ACCOUNT

480. As described below, QUBAISI used funds from the Vasco Account, which

are traceable to the proceeds of the 2012 bond sales, to purchase THE LAUREL

BEVERLY HILLS MANSION in Beverly Hills, California. The property was

purchased for $31,000,000 on or about February 5, 2014, by Laurel Beverly Hills

Holdings LLC, a Delaware limited liability company. The property is currently on the

market and is listed for $38,000,000.

481. On or about January 10, 2014, QUBAISI transferred $930,000 from an

account at Falcon Bank in Switzerland held in his name to an account at Chase

Manhattan Bank belonging to Escrow of the West. The Buyer’s Final Settlement

Statement for the property acquisition, dated February 5, 2014, characterizes this transfer

as a deposit for the purchase of the LAUREL BEVERLY HILLS MANSION “from

Khadem Al-Qubaisi FBO Neil Moffitt.”

482. On or about January 30, 2014, $31,050,387.75 was wired from the Vasco

Account to an account at City National Bank in New York held in the name Escrow of

the West. The wire notations indicate: “7 M. FOR EQUITY TO AL QUBAISI

WALKER TOWER TRUST AND 24 M. FOR LOAN CONTRIB. FROM AL QUBAISI

TO LAUREL BEVERLY HOLDING LLC.”


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483. Escrow of the West recorded a deposit of $31,050,387.75 for the purchase

of the LAUREL BEVERLY HILLS MANSION from Vasco Investments “FBO Laurel

Beverly” on the Buyer’s Final Settlement Statement for the property acquisition.

484. LAUREL BEVERLY HILLS MANSION was purchased by Laurel Beverly

Hills Holdings LLC by deed dated January 14, 2014, which was recorded in the land

records on February 5, 2014. The purchase price was $31,000,000. Neil Moffitt was an

authorized signor for Laurel Beverly Hills Holdings LLC.

P. QUBAISI ACQUIRED HILLCREST PROPERTY 2 USING FUNDS

DIVERTED THROUGH THE AABAR-BVI SWISS ACCOUNT

485. QUBAISI used funds traceable to the proceeds of the 2012 bond sales to

purchase HILLCREST PROPERTY 2 in Beverly Hills, California. The property was

purchased on or about March 24, 2014 by 1169 Hillcrest LLC, a Nevada limited liability

company, for $15,000,000.

486. On or about March 21, 2014, $14,749,071.51 was wired from the Vasco

Account to an account at First American Trust, F.F.B. in the United States, held in the

name of First American Title Company. The payment details on the wire contain the

address for HILLCREST PROPERTY 2.

487. First American Title Company is the title company used in connection with

the acquisition of HILLCREST PROPERTY 2. First American Title Company recorded

the receipt of a deposit in the amount of $14,749,071.51 from Vasco Investments on

March 21, 2014 for the purchase of HILLCREST PROPERTY 2.

488. Land records maintained by the LA Recorder’s Office show that a Nevada

limited liability company called 1169 Hillcrest LLC purchased the property by deed

dated March 20, 2014, which was recorded in the land records on March 24, 2014.

489. According to the final closing statement for the transaction, dated March 24,

2014, 1169 Hillcrest LLC acquired the property for the purchase price of $15,000,000.

This included a deposit of $14,749,071.51 from First American Title Company.


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490. The Operating Agreement for 1169 Hillcrest LLC, dated March 20, 2014,

lists Neil Moffitt as the manager and sole member of the entity.

491. On or about January 8, 2016, a wire of $490,522.79 was sent from the

Vasco Account to an account at J.P. Morgan Chase in the United States held in the name

of 1169 Hillcrest LLC. The wire details read: “OUTSTANDING INVOICES FOR

WALKER TOWER (USD 26.194,81) AND BEVERLY LAUREL (USD 463.327,98)

PERIOD FROM SEPTEMBER TO DECEMBER.”

Q. AZIZ ACQUIRED THE QENTAS TOWNHOUSE & PARKING

SPACE 2 USING FUNDS DIVERTED THROUG THE AABAR-BWI

SWISS ACCOUNT

492. Funds traceable to proceeds of the 2012 bond sales were used by AZIZ to

purchase the QENTAS TOWNHOUSE, Belgravia, London, United Kingdom – together

with a leasehold for PARKING SPACE 2. The property was purchased by Qentas

Holdings Limited on or about July 12, 2012, for £23,250,000. In accounting records for

AZIZ, the amount he paid for the QENTAS TOWNHOUSE is recorded as equivalent to

$41,799,886.

493. As noted in Paragraphs 203 and 206 above, on or about June 18, 2012,

Aabar-BVI transferred $133,000,000 in funds traceable to the proceeds of the 2012

Project Magnolia bond sale to AZIZ’s Red Granite Capital Account at BSI Bank in

Singapore. On or about June 20, 2012—approximately two days later—AZIZ

transferred $58,500,000 from his Red Granite Capital Account to the Shearman IOLA

Account at Citibank.

494. One day later, on June 21, 2012, the Shearman IOLA Account wired

$43,000,000 from the same Shearman IOLA Account funds held on behalf of AZIZ to

an account maintained by Shearman & Sterling’s London office.

495. A purchase agreement for the QENTAS TOWNHOUSE was signed on July

2, 2012. An entity called “Lygon Place (London) Limited,” is listed as the seller; Qentas


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Holdings Limited (“Quentas”), a British Virgin Islands entity, is listed as the purchaser;

and Shearman & Sterling’s London office is listed as the purchaser’s counsel. The

purchase price was £23,250,000.

496. Qentas acquired the QENTAS TOWNHOUSE from “Lygon Place

(London) Limited” by deed dated July 27, 2012, for £23,250,000. AZIZ signed the deed

on behalf of Qentas, and the Red Granite Business Manager signed as a witness.

497. Qentas also acquired leasehold rights to PARKING SPACE 2 as part of the

transaction. Closing documents indicate that a lease agreement was originally entered on

August 9, 2010 between O & H Properties Developments Limited and “Lygon Place

(London) Limited,” the entity that sold the property to Qentas. The lease agreement

granted “Lygon Place (London) Limited” a 999 year lease, beginning on January 1,

2009, to Parking Space 2 for rent of “a peppercorn per annum.” “Lygon Place (London)

Limited” conveyed this leasehold interest to Qentas by the same deed that transferred

title to the QENTAS TOWNHOUSE.

498. AZIZ claimed beneficial ownership of Qentas in his 2012 tax return. That

tax return lists a Los Angeles address for Qentas.

FOREIGN LAW BASES FOR FORFEITURE

499. Misappropriating public funds by a public official is a criminal offense

under Malaysian law, as enumerated by the Penal Code of Malaysia, including but not

limited to sections 403 (dishonest misappropriation of property), 405 (criminal breach of

trust), 409 (criminal breach of trust by public servant or agent), 166 (Public servant

disobeying a direction of the law, with intent to cause injury to any person (including a

company)), 415 (cheating), 418 (cheating with knowledge that wrongful loss may be

thereby caused to a person whose interest the offender is bound to protect), and 420

(cheating and dishonestly inducing delivery of property); and the Malaysian Anti-


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Corruption Act 2009, including sections 16, 17, and 23. Copies of these laws are set

forth in Attachment A.

500. Bank fraud is a criminal offense under Malaysian law, as enumerated by the

Penal Code of Malaysia, including but not limited to section 415 (cheating), 418

(cheating with knowledge that wrongful loss may be thereby caused to a person whose

interest the offender is bound to protect), and 420 (cheating and dishonestly inducing

delivery of property).

501. Misappropriating public funds by a public official is a criminal offense

under U.A.E. law, as enumerated in Federal Law No. (3) of 1987 on Issuance of the

Penal Code, including but not limited to Articles 224, 225, 227, 228, 229, and 399.

Copies of these laws, translated into English, are set forth in Attachment A.

FIRST CLAIM FOR RELIEF

(18 U.S.C. § 981(a)(1)(C))

502. Paragraphs 1 through 501 above are incorporated by reference as if fully set

forth herein.

503. The Defendant Asset is property that constitutes, and is derived from,

proceeds traceable to one or more violations of: (i) a foreign offense involving the

misappropriation of public funds by or for the benefit of a public official (18 U.S.C.

§ 1956(c)(7)(B)(iv)); (ii) fraud by or against a foreign bank (18 U.S.C.

§ 1956(c)(7)(B)(iii)); (iii) wire fraud (18 U.S.C. § 1343); and/or (iv) international

transportation or receipt of stolen or fraudulently obtained property (18 U.S.C. § 2314),

and receipt of stolen money (18 U.S.C. § 2315), each of which is a specified unlawful

activity under 18 U.S.C. §§ 1956(c)(7)(A), 1956(c)(7)(B)(iv) and 1956(c)(7)(D), and a

conspiracy to commit such offenses.

504. The Defendant Asset is therefore subject to forfeiture to the United States

pursuant to 18 U.S.C. § 981(a)(1)(C).


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SECOND CLAIM FOR RELIEF

(18 U.S.C. § 981(a)(1)(A))


forth herein.

506. The Defendant Asset was involved in, and is traceable to property involved

in, one or more transactions or attempted transactions in violation of section 18 U.S.C.

§ 1957 and a conspiracy to commit such offenses in violation of section 18 U.S.C.

§ 1956(h). Specifically, the Defendant Asset was involved in and is traceable to

property involved in one or more financial transactions, attempted transactions, and a

conspiracy to conduct or attempt to conduct such transactions in criminally derived

property of a value greater than $10,000 that was derived from specified unlawful

activities, that is: (i) a foreign offense involving the misappropriation of public funds by

or for the benefit of a public official (18 U.S.C. § 1956(c)(7)(B)(iv)); (ii) fraud by or

against a foreign bank (18 U.S.C. § 1956(c)(7)(B)(iii)); (iii) wire fraud (18 U.S.C.

§ 1343); and/or (iv) international transportation or receipt of stolen or fraudulently

obtained property (18 U.S.C. § 2314), and receipt of stolen money (18 U.S.C. § 2315).

507. The Defendant Asset is therefore subject to forfeiture pursuant to 18 U.S.C.

§ 981(a)(1)(A).

THIRD CLAIM FOR RELIEF

(18 U.S.C. § 981(a)(1)(A))


forth herein.


in, one or more transactions, or attempted transactions in violation of section 18 U.S.C.

§ 1956(a)(1)(B)(i) and a conspiracy to commit such offenses in violation of section 18

U.S.C. § 1956(h). Specifically, the Defendant Asset was involved in and is traceable to

property involved in one or more financial transactions, attempted transactions, and a


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conspiracy to conduct or attempt to conduct such transactions involving the proceeds of

specified unlawful activity, that is: (i) a foreign offense involving the misappropriation

of public funds by or for the benefit of a public official (18 U.S.C. § 1956(c)(7)(B)(iv));

(ii) fraud by or against a foreign bank (18 U.S.C. § 1956(c)(7)(B)(iii)); (iii) wire fraud

(18 U.S.C. § 1343); and/or (iv) international transportation or receipt of stolen or

fraudulently obtained property (18 U.S.C. § 2314), and receipt of stolen money (18

U.S.C. § 2315), and were designed in whole or in part to conceal or disguise the nature,

the location, the source, the ownership or the control of the proceeds of the specified

unlawful activities in violation of 18 U.S.C. § 1956(a)(1)(B)(i).


§ 981(a)(1)(A).

FOURTH CLAIM FOR RELIEF

(18 U.S.C. § 981(a)(1)(A))


forth herein.


in, one or more transactions or attempted transactions in violation of section 18 U.S.C.

§ 1956(a)(2)(B) and a conspiracy to commit such offenses in violation of section 18

U.S.C. § 1956(h). Specifically, the Defendant Asset was involved in and are traceable to

funds that were and were attempted to be, transported, transmitted, or transferred, and a

conspiracy to transport, transmit, or transfer, to a place in the United States from or

through a place outside the United States, with the knowledge that the funds involved in

the transportation, transmission, or transfer represented the proceeds of some form of

unlawful activity and knowledge that such transportation, transmission, or transfer was

designed in whole or in part to conceal or disguise the nature, the location, the source,

the ownership, or the control of the proceeds of specified unlawful activities, that is: (i) a

foreign offense involving the misappropriation of public funds by or for the benefit of a

public official (18 U.S.C. § 1956(c)(7)(B)(iv)); (ii) fraud by or against a foreign bank (18


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U.S.C. § 1956(c)(7)(B)(iii)); (iii) wire fraud (18 U.S.C. § 1343); and/or (iv) international

transportation or receipt of stolen or fraudulently obtained property (18 U.S.C. § 2314),

and receipt of stolen money (18 U.S.C. § 2315).


§ 981(a)(1)(A).

WHEREFORE, plaintiff United States of America prays that:

(a) due process issue to enforce the forfeiture of the Defendant Asset;

(b) due notice be given to all interested parties to appear and show cause why

forfeiture should not be decreed;

(c) this Court decree forfeiture of the Defendant Asset to the United States of

America for disposition according to law; and

(d) for such other and further relief as this Court may deem just and proper,

together with the costs and disbursements of this action.

Dated: July 20, 2016 Respectfully submitted,

M. KENDALL DAY Chief, AFMLS

EILEEN M. DECKER United States Attorney

/s/John J. Kucera JOHN J. KUCERA CHRISTEN A. SPROULE Assistant United States Attorneys

WOO S. LEE Deputy Chief, AFMLS KYLE R. FREENY Trial Attorney, AFMLS

Attorneys for Plaintiff UNITED STATES OF AMERICA


12. Link utili

Le ultime Relazioni d’esercizio di BSIhttps://www.bsibank.com/Download.html#tab-02

Il Department of Justice su BSI (30.03.2015)https://www.justice.gov/opa/pr/bsi-sa-lugano-switzerland-first-bank-reach-resolution-under-justice-department-s-swiss-bank

Il Department of Justice su 1MDB (20.07.2016)https://www.justice.gov/opa/pr/united-states-seeks-recover-more-1-billion-obtained-corruption-involving-malaysian-sovereign

Comunicato MPC – BSI per 1MDB (24.05.2016)https://www.admin.ch/gov/it/pagina-iniziale/documentazione/comunicati-stampa.msg-id-61830.html

Il Sarawak Reporthttp://www.sarawakreport.org/

La Fondazione Bruno Manserhttp://www.bmf.ch/fr/homepage/

https://www.bsibank.com/Download.html#tab-02

https://www.justice.gov/opa/pr/bsi-sa-lugano-switzerland-first-bank-reach-resolution-under-justice-d

https://www.justice.gov/opa/pr/united-states-seeks-recover-more-1-billion-obtained-corruption-involv

https://www.admin.ch/gov/it/pagina-iniziale/documentazione/comunicati-stampa.msg-id-61830.html

http://www.sarawakreport.org/

http://www.bmf.ch/fr/homepage/

BSI FUORI ROTTA Documenti supplementari

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