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The global financial scandal that has spread from Malaysia to Hollywood

Shashank Bengali, Los Angeles Times on

Published in Business News

What's the Hollywood connection?

Investigators say Riza, who is Najib's stepson, used money from 1MDB to bankroll a production company, Red Granite Pictures. With 12 employees and no track record, the West Hollywood-based Red Granite made its name by picking up troubled films that other studios had soured on.

With funding they said came from undisclosed investors in the Middle East and Asia, Riza and co-founder McFarland announced themselves with a 2011 launch party on the beach in Cannes that featured Kanye West, Jamie Foxx, DiCaprio and other A-list stars.

Among the films they financed were "Dumb and Dumber To," the sequel to the 1994 comedy blockbuster, and the $100-million "The Wolf of Wall Street," directed by Martin Scorsese. It is believed DiCaprio, Scorsese and others involved in the film did not know the source of Red Granite's money.

What is Red Granite's response?

The company, which has not released a movie since 2017, has denied wrongdoing and paid $60 million to settle a civil lawsuit with the U.S. government without admitting guilt. The U.S. returned the money to Malaysia.

 

In February, the Justice Department moved to seize tens of millions more in bank and escrow accounts traced to McFarland. The producer has not been charged and is said to be cooperating with investigators.

Riza was the first person connected to Red Granite to face charges. His New York-based lawyer, Matthew Schwartz, said in a statement e-mailed to the Los Angeles Times that "when the actual evidence comes out, it will be clear that he has done nothing wrong."

Who was behind the scheme?

U.S. and Malaysian authorities allege the mastermind was Low, a Malaysian financier who they said talked his way into Najib's inner circle and roped in an astonishing network of celebrities, bankers and political operatives to help pillage 1MDB.

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