(Bloomberg) -- Swiss prosecutors have asked the U.S. Department of Justice for help in gathering information in their probe into corruption at the Malaysian development fund known as 1MDB, as more Swiss banks were named by U.S prosecutors for their involvement in the scheme.
The Office of the Attorney General has filed requests for legal assistance with U.S. authorities and other countries, a spokesman for the office said late Wednesday, without naming them. The Swiss Federal Office of Justice earlier on Wednesday confirmed that it had received a similar request from the U.S. on May 24 and that the Swiss Attorney General was processing it. No further details of what accounts or banks were in the request was given.
U.S. prosecutors sought permission in a California court filing Wednesday to seize more than $1 billion in real estate, art and other luxury goods bought with money diverted from 1MDB into accounts held by shell companies at various banks in Switzerland. It’s the latest development in a crackdown by prosecutors in the U.S., Switzerland and Singapore to uncover how more than $3.5 billion in assets were diverted from the economic development fund.
BSI SA, one of the Swiss banks named in the Justice Department’s 136-page complaint, had already been linked to the alleged corruption at the fund. BSI had its Singapore license revoked over the issue and Swiss prosecutors in May opened criminal proceedings against the bank and two former senior executives. BSI “ignored clear warning signals” about the risk of the transactions in its pursuit of profit, the head of Swiss financial regulator Finma said in May after he seized 95 million Swiss francs ($96 million) from the bank.
The U.S. complaint sheds more light on the extent of BSI’s involvement with the fund. Over the course of several months, about $1.367 billion that 1MDB raised from bond issues in 2012, or more than 40 percent of the total raised, was transferred to an account belonging to a shell company held at BSI in Switzerland, the complaint alleges.
To see a timeline of the 1MDB controversy, click here
In May 2012, some $907.5 million raised in a bond sale was transferred from an account held at the Bank of New York Mellon to an account in the name of 1MDB Energy at Swiss-based Falcon Private Bank Ltd, according to the complaint. A day later, $577 million was wired from Falcon to an account held in the name of a shell company called Aabar-BVI, the complaint reads.
Other banks in Switzerland named as conduits for transactions in the complaint include RBS Coutts and Rothschild Bank AG. The Luxembourg arm of Banque Privee Edmond de Rothschild was also cited in the complaint. Spokesmen for Falcon, BSI and RBS Coutts declined to comment. No one from either Rothschild bank was immediately available to comment.
The U.S. asset seizures are the largest action ever by the Justice Department’s Kleptocracy Asset Initiative, which was established in 2010 to crack down on the use of U.S. banks for international money laundering.
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