Feds seek to seize movie rights, Palantir shares in Malaysia corruption case

Federal prosecutors hope to seize rights to comedy films “Dumb and Dumber To” and “Daddy’s Home,” as well as stock in a high-powered Silicon Valley data-analytics company, alleging they were acquired with money embezzled by Malaysian government officials.

In court filings Thursday, the Department of Justice said the movie rights, several works of art given as gifts to Hollywood star Leonardo DiCaprio and 2.5 million shares of Palantir Technologies — a Palo Alto firm co-founded by tech investor Peter Thiel — are among nearly $1.7 billion in U.S. assets acquired with money pilfered from the 1 Malaysia Development Berhad fund, or 1MDB.

The fund was set up to promote economic development and foreign investment in the Southeast Asian nation, but prosecutors allege that Malaysian government officials and their associates stole more than $4.5 billion from the fund between 2009 and 2015. Much of that was used to acquire luxury goods — including mansions, a yacht and a private jet — and to make investments, including in Hollywood films.

“These cases involve billions of dollars that should have been used to help the people of Malaysia, but instead was used by a small number of individuals to fuel their astonishing greed,” said Sandra Brown, the acting U.S. attorney in Los Angeles.

Last summer, federal officials filed a petition seeking to seize other assets they believe are tied to 1MDB, including several posh L.A. homes, a Beverly Hills hotel and a stake in 2013 film “The Wolf of Wall Street.”

That film, directed by Martin Scorsese and starring DiCaprio, as well as “Daddy’s Home” and “Dumb and Dumber To,” were financed by Red Granite Pictures, a Hollywood firm co-founded by Riza Aziz, stepson of Malaysian Prime Minister Najib Razak. Red Granite was the sole financier of “Wolf,” and co-produced the other films.

“Dumb and Dumber To,” a Universal Pictures sequel released in 2014 and starring Jim Carrey and Jeff Daniels, generated about $170 million in global ticket sales, according to Box Office Mojo. The Will Ferrell and Mark Wahlberg comedy “Daddy’s Home” was released in 2015 by Paramount Pictures and grossed $243 million in ticket sales.

The Justice Department said Thursday that it wants to seize Red Granite’s share of the rights to the two comedies.

Last year, Red Granite officials said they had no knowledge of receiving tainted funds and that “when all the facts come out, it will be clear that Riza Aziz and Red Granite did nothing wrong.”

In a statement Thursday, Red Granite said it is “actively engaged in discussions with the Justice Department aimed at resolving these civil cases and is fully cooperating.”

Among the assets listed in Thursday’s filings are a Picasso painting and other artwork given to DiCaprio by Jho Low — a central figure in the 1MDB investigation and, according to prosecutors, an acquaintance of Red Granite’s Aziz — and one of Low’s associates.

A spokesman for DiCaprio said Thursday that the actor had intended to auction the artwork at a benefit for his charitable foundation. The spokesman said DiCaprio had started the process of turning the artwork over to federal authorities before Thursday’s filing.

DiCaprio also forfeited an Oscar statue — originally won by Marlon Brando — that was given to him by Red Granite, the spokesman said. Prosecutors did not mention the Oscar in Thursday’s filing.

In court filings, prosecutors allege that 1MDB officials used a complex web of transfers between numerous shell companies and bank accounts to conceal the source of funds. For instance, prosecutors say money from 1MDB flowed through a handful of accounts before $2 million of it was used by a Saudi Arabian oil executive to invest in Palantir in March 2010.

Palantir did not respond to requests for comment.

The company, which develops data-analysis software used by the U.S. government, Los Angeles Police Department and other insitutions, was valued at $20 billion in a private financing last year. It’s one of the world’s most highly valued start-ups.

The Justice Department’s investigation into the embezzlement of 1MDB funds is part of a department initiative to crack down of foreign kleptocrats.

[email protected]

Follow me: @jrkoren

Times staff writers David Ng and Paresh Dave contributed to this report.