Police have arrested Khadem Al Qubaisi, believed to be a major player in the alleged multibillion-dollar fraud related to 1MDB.
According to the Wall Street Journal, the arrest was made last week following the Abu Dhabi authorities’ investigation into fraud and corruption, which included Qubaisi’s alleged role in 1Malaysia Development Bhd.
Quoting people familiar with the probe, the WSJ said, however, that no charges had been filed against him. Qubaisi had earlier been restricted from leaving the United Arab Emirates and had his assets in the country frozen.
The WSJ said a lawyer for Qubaisi, 45, declined to comment.
Qubaisi is under investigation by US authorities as well. In civil forfeiture lawsuits filed last month, the US Department of Justice (DoJ) sought to freeze about USD100 million of real estate in the US that he had allegedly bought with money embezzled from 1MDB.
The DoJ had alleged that Qubaisi had received about USD470 million of money siphoned from 1MDB.
It claimed that he had bought properties in the US with that money, including a USD51 million penthouse in New York’s Walker Tower and two mansions in Los Angeles worth a combined USD46 million.
The remainder of those funds, more than USD300 million, haven’t yet been accounted for.
The WSJ said US investigators were now broadening their probe into Qubaisi’s dealings and funds they suspect he took control of through the alleged fraud.
The WSJ said that in following what the DoJ claimed was a USD470 million money trail that stretched from Malaysia to Abu Dhabi to the British Virgin Islands, investigators were now looking for any connection to a company that vaulted to the top of the Las Vegas nightclub scene with two USD100 million venues.
Investigators, it said, were also trying to determine if Qubaisi had used funds originating from 1MDB to help finance the world’s fifth-biggest yacht.
Qubaisi hasn’t commented on the allegations.
The company that runs the Las Vegas nightclubs is called Hakkasan Ltd. Based in London, it is controlled by Sheikh Mansour Bin Zayed Al Nahyan, deputy prime minister of United Arab Emirates and member of the Abu Dhabi royal family.
Investigators sent a subpoena to Neil Moffitt, the company’s chief executive, earlier this year, according to the WSJ.
The report pointed out that there was no allegation of any wrongdoing against Hakkasan or its employees and that the US investigation was focused on Qubaisi’s actions, many of them taking place in offshore jurisdictions.
Qubaisi was chairman of Hakkasan and a member of its board of directors. He resigned from the company on May 9.
He was removed last year from his job at the International Petroleum Investment Company (IPIC), Abu Dhabi’s USD80 billion sovereign-wealth fund.
IPIC too had dealings with 1MDB and is currently involved in a legal tussle over payments it claims 1MDB never made.
Brandon Roos, Hakkasan’s vice-president of legal affairs, said in a letter to the WSJ that it had conducted its own “internal review of funding documentation and we remain fully confident that Hakkasan received capital from a legitimate fund in the Middle East” that wasn’t connected to entities involved in the 1MDB affair.
He said that the Justice Department had confirmed Hakkasan was “not the subject or target of their 1MDB investigation”.
In a separate letter provided by a lawyer for Hakkasan to the WSJ, the lawyer said Hakkasan’s absence from the government’s civil suits was “clear evidence that Hakkasan, in the judgment of the Department of Justice, has not been the beneficiary of or a conduit for the laundering of monies illicitly obtained by Qubaisi and his confederates”.
Founded as a high-end Cantonese restaurant in London in 2001, Hakkasan expanded into nightclubs and now has venues in the Middle East, India, China and the US, said the report. Sheikh Mansour’s investment company in Abu Dhabi, Tasameem Real Estate LLC, bought it in 2008 and in 2013, the company began to expand in Las Vegas, especially in nightclubs.
The US government’s inquiries are related to financing the company received during or after 2012, when part of the alleged 1MDB fraud involving Qubaisi took place, the WSJ said, quoting people familiar with the probe.
US investigators are also probing the financing of a mega yacht controlled by Sheikh Mansour called the Topaz, which at 482 feet is the world’s fifth largest.
The WSJ said representatives of Sheikh Mansour didn’t respond to a request for comment.