The scandal engulfing Aabar Investments just keeps getting stranger and stranger.
The U.S. Justice Department has charged that some of the funds allegedly stolen from the Malaysian sovereign wealth fund 1MDB ended up funding The Wolf of Wall Street, a hit movie starring Leonardo DiCaprio as corrupt Wall Street stock broker Jordan Belfort.
According to the Financial Times, the Swiss are probing Khadem al-Qubaisi, the former head of Abu Dhabi’s International Petroleum Investment Company (IPIC) sovereign wealth fund, and his colleague Mohamed Badawy al-Husseiny, who headed up IPIC subsidiary Aabar.
Al-Qubaisi and al-Husseiny are accused of setting up a fake look-alike Aabar account in the British Virgin Islands, into which $1.37 billion — money that was intended to go to the real Aabar in Abu Dhabi as payment for guaranteeing two Malaysian bonds worth $3.5 billion — was deposited in 2012.
From the fake Aabar account, hundreds of millions are alleged to have swiftly flowed into accounts held by al-Qubaisi and al-Husseiny, alongside Red Granite co-founder Riza Aziz. From the $238 million Aziz is alleged to have received, lavish properties in New York, Beverly Hills and London were purchased, while at least $68 million went into his start-up production company and The Wolf of Wall Street. The three properties, and the film, are now listed as among the assets the Justice Department is looking to seize as part of a $1 billion forfeiture complaint.
For his part in the deal, al-Qubaisi is alleged to have received more than $472 million. And like his fellow beneficiary Aziz, he wasn’t shy about taking advantage of his new wealth, in 2014 purchasing a penthouse in the Walker Tower for $51 million, then the most expensive property in downtown Manhattan. The penthouse is now facing seizure by the Justice Department.
Aabar has invested $390 million into Virgin Galactic and owns 37.6 percent of Richard Branson’s space tourism company. There are no allegations of wrong doing by Virgin Galactic or the Virgin Group.
In July, the Justice Department filed civil forfeiture complaints seeking to recover more than $1 billion in assets obtained with the proceeds of funds allegedly stolen by Al-Qubaisi and al-Husseiny. The assets include the DiCaprio film, a Bombardier jet, and real estate properties in Beverly Hills, New York and London. [Read The Wolf of Wall Street complaint]
Last year, Al-Qubaisi and al-Husseiny were removed from their jobs as head of IPIC and Aabar, respectively. Al-Qubaisi was arrested in Abu Dhabi earlier this month; al-Husseiny has had his assets frozen and been ordered not to leave the country.
Abu Dhabi officials have said that the British Virgin Islands company they are accused of establishing was never part of Aabar or its parent company, IPIC.
In June, Abu Dhabi announced it would merge IPIC with another government-owned investment company named Mubadala Development Company PJSC. Officials said the merger was necessary because of lower oil prices and slower economic growth.