Why the US is targeting 1MDB-related graft


(FMT) – The road ahead for the Department of Justice’s efforts to recover money it says was stolen from 1MDB is littered with legal obstacles and it may be years before any money is returned to Malaysia.

One major reason the US goes after officials in foreign countries – including Malaysia – suspected of being involved in money laundering is that it impacts the stability of US markets.

According to Global Financial Integrity, about USD1 trillion in illicit funds flow out of developing countries annually. This does not affect just the country where it happens but also the major world markets.

Another reason is that corruption on a massive scale could affect the national interests of nations such as the US.

That is why the US Department of Justice (DoJ) has taken such a keen interest in the affairs of 1Malaysia Development Bhd, according to a report in the Financial Times.

The report quoted Kendall Day, who heads the DoJ’s asset forfeiture and money laundering section as saying the US financial market was attractive for corrupt cash because it was stable and liquid.

“But hot money can really distort our markets and create risks for our financial institutions.”

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