RIZA Aziz and his business partner used US$4.2 million (RM17 million) in 1Malaysia Development Bhd funds to buy shares in a Kentucky-based company, reports Malaysiakini.

The shares are among three assets linked to the troubled state investor that the US Department of Justice seeks to recover in its latest civil forfeiture suits filed on Friday.

Riza, the stepson of former prime minister Najib Razak, and Joey McFarland bought a 43.37% stake in the facilities management firm, dubbed “Company 1”, in June 2013, though it is unclear why they did so, according to suit documents.

An unnamed executive, dubbed “Company 1 Executive 2”, is allegedly friends with McFarland.

The US$4.2 million was directly transferred from Red Granite Investment Holdings, a company wholly owned by Riza, to an executive, dubbed “Company 1 Executive 1”, said DoJ.

The funds were part of the US$50 million loaned by Telina Holdings to Red Granite Capital, another Riza-owned firm, to finance Hollywood blockbuster The Wolf of Wall Street.

DoJ said the film was used as collateral for the loan.

The British Virgin Islands-registered Telina is owned by former International Petroleum Investment Company managing director Khadem Abdulla al-Qubaisi, who is alleged to be among the beneficiaries of the 1MDB scandal.

However, it remains unclear how the funds from Telina are tied to the state investor.

DoJ said plans for the Kentucky firm buy-in started in November 2012, and in January 2015, 18 months after the buy-in, McFarland got a distribution for US$3.5 million from “Company 1”.

He then transferred US$1.5 million to Riza’s personal accounts.

Last month, “Company 1” spent US$28.1 million to buy back the shares from Red Granite Investment and McFarland through its affiliate, New FM Acquisition Company.

The funds were placed in an escrow account held by law firm Squire Patton Boggs, acting as agent.

The fresh suits filed by DoJ bring to US$1.7 billion the value of 1MDB-linked assets now subject to forfeiture. – February 24, 2019.