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Sarah Hofmann, CFE

ACFE Public Information Officer

On Wednesday March 7, Red Granite Pictures, a Los Angeles-based movie production company, agreed to pay $60 million to settle a lawsuit brought by the U.S. Department of Justice (DOJ). The suit alleged that the production studio took money associated with the 1MDB scandal — a multibillion-dollar corruption and money laundering case that centers around Malaysia. While fraud comes in all shapes and sizes, it may still seem unusual for the company that produced a handful of big-name movies to be tied to accused embezzlement in a Malaysian development fund.

So how are Red Granite Pictures and 1MDB connected? In 2010, Riza Aziz, stepson of Malaysian Prime Minister Najib Razak, helped start Red Granite Pictures. In 2013, Red Granite produced and released the blockbuster “The Wolf of Wall Street,” starring Leonardo DiCaprio and directed by Martin Scorsese. DiCaprio won a Golden Globe the same year for Best Actor – Motion Picture Musical or Comedy and thanked Aziz and financier Jho Low in his acceptance speech.

Low, who is central to the 1MDB investigation and friends with Aziz, made a name for himself by hobnobbing with Hollywood A-listers and rich socialites. Low threw extravagant parties on his $250 million superyacht and spent millions on diamonds for his reported girlfriend at the time, former Victoria’s Secret model, Miranda Kerr.

Low rang in 2013 with a multimillion-dollar bash for guests that started in Sydney and ended in Las Vegas — with Low providing plane travel between the destinations and thousands in casino chips for gambling. Among the guests were DiCaprio, actor and performer Jamie Foxx, “Gossip Girl” actor Chace Crawford, “Glee” actor Matthew Morrison, “Arrow” actor Colton Haynes and DJ Samantha Ronson, famous at the time for being the former girlfriend of actress Lindsay Lohan.

Trouble began to arise for the high-flying Low and Aziz when exposés and investigative reports on 1MDB caught the attention of authorities in Switzerland, Singapore and the U.S. In 2016, the U.S. DOJ sued Red Granite Pictures on allegations that the capital Aziz used to start the company had come from the 1MDB fund.

This $60 million settlement is only the latest action by the DOJ. They have seized priceless artwork, real estate and Low’s yacht in connection with the 1MDB scandal. Red Granite Pictures has denied any wrongdoing, but with many layers of international corruption to dig through, it’s a safe bet that this story is far from over.

Hear from the investigative reporter, Clare Rewcastle Brown, who exposed the 1MDB corruption at the 29th Annual ACFE Global Fraud Conference in Las Vegas, June 17-22, 2018.