Malaysia investment fund 1MDB sues Amicorp Group for alleged fraud – JURIST

Malaysia’s state investment fund 1 Malaysia Development Berhad (1MDB) filed on Monday a lawsuit against corporate services provider Amicorp Group and its Chief Executive Officer (CEO), Toine Knipping, for allegedly facilitating the money laundering of over $7 billion in misappropriated funds, local media reported.

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In its claim, 1MDB accused Amicorp Group of “fraudulently aiding and abetting breach of fiduciary duty and conspiracy to commit unlawful acts.” According to local media, a spokesperson of 1MDB asserted they had evidence that suggested Amicorp Group was fully aware of its involvement in money laundering operations to divert funds that were destined for Malaysian citizens and that it designed a complex network of entities in various countries to conceal the origin and destination of the money.

The Malaysian fund explained that Amicorp played a key role in fraudulent transactions from 2009 to 2014, resulting in the theft of funds from 1MDB. The fund accused Amicorp of creating a global network of shell companies and committing fraudulent financial transactions to funnel the stolen money and conceal its origin. It also claimed that Amicorp created a false paper trail to disguise the source of the stolen funds by providing access to the global financial system through one of its Barbados-registered subsidiaries. In its claim, 1MDB sought damages exceeding 1$ billion for the losses it suffered due to the unlawful actions of the corporate services provider. However, Amicorp denied the Malaysian fund’s accusations and pledged to defend itself in court against the $1 billion claim.

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Money laundering refers to the process through which criminal entities transform funds or assets derived from criminal activity into funds of an apparently legal source, which is prohibited by Article 4(A) of Malaysia’s Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA). Money laundering allows the disguise of illegally gained financial assets so they can be reintroduced into the legitimate financial system without detecting the illegal activity that produced them. This practice hides a wide range of serious underlying criminal offences, such as terrorism and arms trafficking, which is why it poses a serious threat to the integrity of national financial systems.

The legal claim filed by 1MDB against Amicorp Group is part of ongoing global efforts to recover stolen assets linked to a multibillion-dollar fraud scandal. The 1MDB fraud case dates back to 2018 when investigations revealed that the state-owned investment fund had been misappropriated over several years by foreign entities and government officials, including Malaysia’s former Prime Minister Najib Razak. The US Department of Justice has reached a settlement agreement with the plotter of the fraud scheme, which allowed for the recovery of $700 million.

Furthermore, Najib Razak was sentenced to 12 years in prison and fined 210 million ringgit (USD 49.9) for charges related to corruption, embezzlement and money laundering through 1MDB. However, both his prison sentence and fine were reduced to six years and 50 million ringgit, respectively, by Malaysia’s pardons board.