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The legacy of the 1MDB scandal on the art world already includes high-profile works by Vincent van Gogh, Jean-Michel Basquiat, Claude Monet, and Andy Warhol purchased by Malaysian financier Jho Low for eye-watering sums at auction. But a new forfeiture complaint filed by the US government Monday alleges that former 1MDB lawyer “Jasmine” Loo Ai Swan purchased the Pablo Picasso pencil drawing Trois femmes nues et buste d’homme (1969) from Christie’s in May 2014 for $1.27 million using misappropriated funds from a bond sale underwritten by Goldman Sachs.
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The 1MDB scandal is the shorthand term for the elaborate, criminal mismanagement of the Malaysian government-run wealth fund 1Malaysia Development Berhad. While the fund’s stated goal was strategic investments and helping alleviate poverty, in 2015, it became the center of an extensive corruption, bribery, and money laundering conspiracy involving officials in several countries. The US Department of Justice found that $4.5 billion in assets were diverted to individuals—including then-Prime Minister Najib Razak, his family, Low, and Loo—to fund lavish lifestyles, purchase art and memorabilia, for political lobbying, and even to finance the production company behind the film Wolf of Wall Street.
The 46-page court document, filed in the US District Court for the Central District of California on August 28, alleges that Loo purchased the Picasso drawing using proceeds from a series of financial transfers from a $3 billion bond sale arranged and underwritten by Goldman Sachs in 2013. If proven, it would confirm another work of art in the 1MDB scandal was purchased through misapropriated funds.
The court document was submitted by Margaret A. Moeser, acting chief of the US Department of Justice’s Money Laundering and Asset Forfeiture Section, international unit chief Mary Butler, as well as trial attorneys Jonathan Baum, Barbara Levy, Joshua Sohn, and Sean Fern.
Normally, the identity of winning bidders is kept secret by auction houses unless the buyer chooses to disclose that information, such as Drake posting a photo of Tupac Shakur’s custom crown ring on Instagram last month.
In this case, the US government’s filing revealed that Loo had successfully bid $1.265 million for Trois femmes nues et buste d’homme on May 14, 2014 and paid Christie’s a final sales price, including buyer’s premium, of $1,377,268.75. The amount was well above the estimate of $700,000 to $900,000.
Loo was arrested last month in Kuala Lumpur, Malaysia, after surrendering to police. A warrant for her arrest had been issued on December 4, 2018 after she failed to appear in court.
Some of the other lavish art purchases from those embezzled assets from 1MDB included Low’s winning bids for Jean-Michel Basquiat’s Dustheads (1982) at Christie’s New York in May 2013 for a record $43.5 million, Picasso’s Tête de Femme from Sotheby’s New York in November 2013 for $39.9 million, and Monet’s Nymphéas (1906) at Sotheby’s London in June 2014 for the equivalent of $53.9 million.
The long list of cases the US government has also filed involving art include van Gough’s La Maison de Arles, the €25.3 million in proceeds from the sale of Nympheas, the Picasso painting Nature Mortes Au Crane de Taureau, Basquiat’s Redman One and Self-Portrait, Warhol’s Round Jackie and Colored Campbell’s Soup Can (Emerald Green), Diane Arbus’s Boy With the Toy Hand Grenade as well as the Monet paintings Saint Georges Majeur and Vétheuil Au Soleil.
The 1MDB case has continued to be irksome for auction houses, who frequently check that potential bidders have the financial liquidity to pay for purchases and the funds have not come from organized crime.
When ARTnews asked Christie’s about the new court filing, a spokesperson said, “We cannot comment on the identity of clients or specific transactions.”