Wolf of Wall Street producer to pay US$60 million in 1MDB case

Wolf of Wall Street producer to pay US$60 million in 1MDB case
PHOTO: Golden Village Pictures

LOS ANGELES - Red Granite Pictures has agreed to pay US$60mil (S$78.9 million) to the US government in order to resolve allegations that it profited from a massive Malaysian corruption scandal.

The company, which produced "The Wolf of Wall Street" among other films, filed a joint stipulation with federal prosecutors on Tuesday (March 6). Under the agreement, Red Granite does not admit to any wrongdoing.

"We are glad to finally put this matter behind us and look forward to refocusing all of our attention back on our film business," the company said in a statement.

Prosecutors filed a civil asset forfeiture action against the company in July 2016, as part of a much broader effort to recoup more than US$1billion allegedly embezzled from 1Malaysia Development Bhd (1MDB), a Malaysian state-run development fund. The Justice Department has accused financier Jho Low of masterminding a scheme to steal US$4.5 billion from the fund.

Riza Aziz, the CEO of Red Granite, is the stepson of Malaysia’s Prime Minister and a close friend of Low’s. Prosecutors alleged that he used more than US$100 million taken from 1MDB to finance "The Wolf of Wall Street", "Dumb and Dumber To" and "Daddy's Home".

The agreement provides that Red Granite will make the forfeiture payment in three instalments: US$30 million within 30 days, US$20 million within the next 180 days, and the final US$10 million within 180 days after that.

While the case has been pending, Paramount Pictures has held Red Granite's profits from "Daddy's Home". Under the agreement, Paramount will transfer that amount to an account controlled by the government. After the first forfeiture payment of US$30 million, the government will release US$3 million of the Paramount funds to Red Granite, to cover its operating expenses for the following 180 days. The balance of the Paramount funds will be released to the company upon full payment of the forfeiture.

Red Granite can apply to receive some of the Paramount funds early, but only if for "ordinary course" transactions. Under the terms of the settlement, Riza is not drawing any salary from Red Granite above what is required to maintain health insurance coverage. That will continue until the US$60 million is paid in full.

Riza has claimed that he never knowingly used stolen funds for his film projects. He was also accused of using stolen funds to buy luxury real estate, including a US$35 million condominium in New York, a US$41.8 million London townhouse, and a $US17.5 million mansion in Beverly Hills. The government is also seeking to seize those properties.

As part of the case, the government has also taken possession of three artworks that Low and an associate gifted to Leonardo DiCaprio, the star of "The Wolf of Wall Street". DiCaprio also agreed to turn over an Oscar that had been awarded to Marlon Brando, and which Red Granite had given him as a gift. DiCaprio was not accused of wrongdoing.

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