The Justice Department identifies Mr. Najib only as “Malaysian Official 1,” and The New York Times reported that his attorney general found no evidence that money had been misappropriated. 1MDB says it is cooperating in the case, and has not been named as a defendant.
Asset forfeiture dates back over 200 years, first used to seize pirate ships or goods imported without payment of the proper duties. Today, the law authorizes the government to sue for the item sought to be forfeited, known as an “in rem” proceeding, because it was used for a crime or represents the proceeds of illegal conduct.
That means the cases sometimes have odd names, like United States v. 92 Buena Vista Avenue, a Supreme Court decision involving a home in New Jersey that the government sought to seize because its purchase was traceable to the proceeds of drug dealing. Among the items named in the lawsuits are the rights to “Dumb and Dumber To” and “The Wolf of Wall Street,” movies financed with funds from 1MDB; a Bombardier jet; a penthouse in the Time Warner Center in New York City; and an apartment in the fashionable Mayfair section of London.
The Justice Department routinely seeks to seize assets in criminal cases as one part of the indictment. If it wins a conviction, then a defendant is liable to return anything of value derived from the crime. In addition, the government can also seek “substitute assets,” which means it can seize any other money or property that might be available if the proceeds of the crime are not enough to satisfy the full amount of the forfeiture order.
Unlike a criminal prosecution, a civil asset forfeiture case allows the government to seize only assets that it can trace to the underlying crimes. That puts a premium on following the flow of money, and the complaint goes into great detail in describing how cash flowed out of accounts controlled by 1MDB through banks in Switzerland, Singapore and…