Malaysia drops 1MDB money laundering case against "Wolf of Wall Street" producer

US and Malaysian authorities say about $4.5 billion was looted from 1MDB, co-founded in 2009 by former Malaysia Prime Minister Najib

Malaysian prosecutors on Thursday dropped a $248-million money laundering case against a producer of Hollywood film "The Wolf of Wall Street" and the stepson of former Malaysian prime minister Najib Razak, citing a deal for an undisclosed amount of funds to be paid to the government.

Riza Aziz, the co-founder of Red Granite Productions that was behind the 2013 Oscar-nominated film, was charged with five counts of money laundering last year over allegations that he had received $248 million misappropriated from state fund 1Malaysia Development Berhad (1MDB).

U.S. and Malaysian authorities say about $4.5 billion was looted from 1MDB, co-founded in 2009 by then-premier Najib.

A sessions court judge on Thursday ruled that the charges against Riza would be withdrawn without acquittal, after prosecutors said they had reached a deal which would see the government receiving "a substantial sum running into several million ringgit".

"The sums have direct reference to the subject matter of the charges framed in this case," lead prosecutor Gopal Sri Ram told the court, according to a copy of his statement made available to Reuters.

Gopal said steps would be taken to ensure a full acquittal for Riza upon completion of the deal.

Picture for representation
Traffic passes a 1Malaysia Development Berhad (1MDB) billboard at the Tun Razak Exchange development in Kuala Lumpur Reuters

1MDB money laundering case

Riza's lawyer Hariharan Tara Singh declined to comment, saying he was not at liberty to disclose the terms of the settlement.

The U.S. Department of Justice has said Red Granite financed three films, including "The Wolf of Wall Street", using funds they suspect were stolen from 1MDB.

Red Granite paid the U.S. government $60 million in September 2017 to settle a civil forfeiture claim over the rights to the films.

The United States has returned or assisted Malaysia with recovering around $600 million from the sale of assets allegedly bought with stolen 1MDB funds.

After losing an election to Mahathir Mohamad in 2019, Najib has been slapped with 42 criminal charges tied to losses at now-defunct 1MDB and other state entities. He has pleaded not guilty and has consistently denied wrongdoing.

Najib told Reuters in March, days after Mahathir unexpectedly resigned amid political turmoil, that he now expected an atmosphere more conducive to a fair hearing.

The case has also led to scrutiny of Goldman Sachs, which Malaysia has accused of misleading investors over bond sales totalling $6.5 billion that the bank helped raise for 1MDB. Three units of the bank have pleaded not guilty.