Standard Chartered Faces Lawsuit Related to Decade-Old 1MDB Scandal
Standard Chartered is reportedly facing a lawsuit in Singapore filed by liquidators who are trying to recover money from Malaysia’s sovereign wealth fund, 1Malaysia Development Berhad (1MDB).
[contact-form-7]The lawsuit alleges that Standard Chartered enabled fraud to be committed against 1MDB more than 10 years ago, Reuters reported Tuesday (July 1).
Standard Chartered said in the report that it rejected the claims.
The lawsuit is part of a larger effort by financial services firm Kroll to recover $4.5 billion that was stolen from 1MDB between 2009 and 2014, according to the report.
Kroll alleges in the lawsuit that Standard Chartered permitted more than 100 intrabank transfers during that time that helped conceal the movement of the stolen money, all while overlooking “obvious red flags,” the report said.
“According to this lawsuit, the transfers demonstrate serious breaches and control failings which ultimately enabled the theft of public funds by people operating at the highest levels of the Malaysian government during that period,” the liquidators said, per the report.
Standard Chartered told Reuters that it had not yet received the legal filing but that it rejected the claims.
“Any claims by these companies are without merit and Standard Chartered will vigorously defend any lawsuit commenced by the liquidators,” the firm said, according to the report.
It was reported in 2016 that the U.S. Department of Justice filed lawsuits related to a multibillion-dollar, decades-long, international money-laundering scandal involving 1MDB, with the DOJ alleging that law firms holding money in their pooled accounts had authorized transfers used to pay for luxury real estate in the United States, jewelry, and yacht and jet rentals.
The DOJ alleged that from 2009 through 2015, more than $3.5 billion in funds belonging to 1MDB were misappropriated by high-level officials of 1MDB and associates.
The Wall Street Journal (WSJ) reported Tuesday that the 1MDB scandal led to the political downfall of a former Malaysian prime minister and the conviction of some Goldman Sachs bankers.
In December 2016, the Monetary Authority of Singapore said it discovered lapses in Standard Chartered’s anti-money laundering procedures and fined the bank 5.2 million Singapore dollars (about $3.5 million at the time), according to the WSJ report.
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