In the 1990s, Jordan Belfort's "pump and dump" scam earned him millions of dollars and 22 months in jail after being convicted of securities fraud. His extravagant rise and fall was depicted in The Wolf of Wall Street, featuring Leonardo DiCaprio in the title role.
Now Belfort has filed a US$300 million lawsuit against Riza Aziz, the stepson of former Malaysian prime minister Najib Razak. Riza's production company Red Granite Pictures purchased the rights to Belfort's memoirs and its sequel, allegedly using money siphoned from 1MDB, the state fund at the centre of wide-ranging corruption allegations.
In his suit, filed in Los Angeles on Thursday, the former stockbroker claims the scandal engulfing 1MDB has curtailed his ability to profit further from the rights to his story, Variety reported. The suit claims Belfort believed Riza when he claimed the funding for came from wealthy private investors and Goldman Sachs.
"Belfort was completely blindsided to learn, after the fact, of the source of funding for Red Granite and the film based on his book/ story, as defendants concealed these criminal acts and funding sources from him, " the suit states. "Had he known he certainly never would have sold the rights."
The US Department of Justice (DoJ) alleges US$4.5 billion was siphoned from 1MDB between 2009 and 2014 and laundered in multiple jurisdictions including Singapore, the US and Switzerland.
Both Malaysia and the US have concluded 1MDB funds were used to buy luxurious jewels, a super yacht, a private jet " and to fund The Wolf of Wall Street. The DoJ in 2016 filed a civil forfeiture suit to recoup some of the film's proceeds. Red Granite in March 2018 agreed to pay US$60 million to settle the action.
Red Granite's lawyer, Matthew Schwartz of Boies Schiller Flexner, said Belfort's suit had no merit.
"Jordan Belfort's lawsuit is nothing more than a desperate and supremely ironic attempt to get out from under an agreement that for the first time in his life made him rich and famous through lawful and legitimate means," Schwartz said in a statement.
Najib, who served as Malaysia's finance minister before becoming prime minister, founded and chaired 1MDB. He was arrested two months after his defeat in the 2018 Malaysian election and faces a series of criminal trials after being charged with 42 counts of criminal breach of trust, money laundering and abuse of power.
In one of his trials, Najib stands accused of diverting US$700 million from SRC International " a former subsidiary of 1MDB " into his personal bank accounts. In a separate trial Najib faces 21 charges of money laundering and four charges of abuse of power, relating to suspicious transactions worth more than US$480 million at 1MDB.
Malaysian authorities have seized cash and luxury goods worth up to US$273 million from properties linked to Najib, but he claims the funds were donated to him by Saudi Arabia's royal family and that the items were mostly gifts to his wife and daughter.
Riza's mother, Rosmah Mansor, married Najib in 1987. She also faces charges relating to the 1MDB scandal.
In 2018, police confiscated 284 boxes of designer handbags, many stuffed with cash, as well as 2,200 rings, 1,400 necklaces, 14 tiaras, 423 watches and 234 pairs of designer sunglasses. Her reputation for exorbitant spending on luxury items prompted comparisons with the Imelda Marcos, the wife of the late Philippine dictator, and made her a reviled figure in Malaysia, where many are grappling with the rising cost of living and a sluggish economy.
Financier Low Taek Jho, also known as Jho Low, is accused of masterminding the fraud. Although he has also denied any wrongdoing, he remains a fugitive and his whereabouts are unknown.
The various 1MDB trials have heard that Low referred to Najib as "Optimus Prime" in some correspondences; Low allegedly referred to himself as 'FL' in some chats, apparently a shorthand for the Cantonese expression "Fei Lou", or Fat Boy.
He reached a billion-dollar settlement with the US government and had his Cypriot passport revoked, all while remaining in hiding.
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