The Department of Justice moves to seize $100 million worth of prime LA real estate

The big news around town this week is the DoJ has, at long last and as anticipated, filed presumptive documents to seize assets purchased with stolen cash in the never-ending 1MDB saga. Fresh off their $33.5 million (rumored price) sale in Malibu, they’re ready for bigger and better things.

If you’re like Yolanda, poring over the 100+ page lawsuit feels just like an alcoholic downing their first beer on Election Day. We loved it. We read the whole thing twice and we’re gearing up for round three after we finish this post.

If you don’t feel like diving in, we’ll give y’all a quick summary. The file details the complex ways that the sanity-defying sums of money (we’re talking billions in cash) were siphoned from Malaysia’s government development fund and laundered around the world. Much of the dough wound up here in the US, for better or worse.

Yolanda wonders what sort of implications this seizure may hold for US-Malaysian relations. Although Malaysian Prime Minister Najib Razak is not actually named in the lawsuit, the file repeatedly references a “Malaysian Official 1” who many media sources believe is Mr. Najib.

Among the people the file does name as 1MDB money launderers are Riza Aziz (stepson of Mr. Najib), Jho Low (best friend of Mr. Aziz and long-rumored to be the 1MDB heist manager), and Khadem Al-Qubaisi (an Emirati businessman and party boy).

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L to R: Khadem Al-Qubaisi, Jho Low, Riza Aziz (Photo: NYT)

You may recall that Yolanda wrote about this case several months ago under the title “Is the FBI about to seize Jho Low’s $39 million house?”. Now it looks like it’s really gonna happen.

The 1MDB money laundering investigation, which is being conducted separately by at least six different nations around the globe, is widely believed to be one of the biggest — if not the biggest — money laundering cases of all time, at least in terms of the dollar amounts involved. For its part alone, the US DoJ is seeking to recover more than $1 billion worth of real estate, art, and movie rights.

That’s right, the suit specifically calls out The Wolf of Wall Street as being financed with stolen money. How ironic is that? So now the boys at the DoJ are requesting “all rights, title, profits, related to” the film. Perhaps they will take the original copy and lock it up in some underground government vault. Or perhaps the FBI will carefully review the tape for 1MDB clues. Perhaps the part when Margot Robbie shows Leo DiCaprio her hoo-ha? We joke! Sorry.

Yolanda has neither the time nor the inclination to run through all the lottery-winner-style spending outlined in the lawsuit on here, but we do want to briefly draw your attention to the four uber-pricey LA residential properties that the feds have their eyes on: three in Beverly Hills, one in the Bird Streets.

Together, if we go by the original purchase prices, more than $100,000,000 in stolen cash was used to acquire just these four pieces of land alone. Let’s have a quick look-see, shall we?

 

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912 N. Hillcrest Road, Beverly Hills. — “Weirdo Pyramido”

In September 2010, according to the lawsuit, Malaysia Prime Minister Najib Razak’s stepson Riza Aziz paid $17,500,000 (with assistance from his buddy Jho Low) for the oddball “Pyramid House” in super-prime lower Trousdale Estates. The house was designed/built by infamous spec-mansion builder Mohamed Hadid. As per property records, the site was purchased through an entity calling itself “912 North Hillcrest Road (BH) LLC”.

Sited on .73 acres, the property is actually made up of three separate parcels. Two are in Beverly Hills while the third tiny sliver of a parcel is actually in the city of Los Angeles (right next door). At the time of the sale, the house had 11,573 square feet of garish living space with 5 bedrooms, 10 bathrooms, a 120-foot pool, a smallish garden, and a large (holy?) pyramid underneath a skylight.

Though he’s owned the place for six years now, Mr. Aziz has not had much time to enjoy it. It’s our understanding that the property has been under major construction for (at least) the past four years. Keep in mind, kids, that the house was basically all-new when Mr. Aziz bought it from Mr. Hadid. At present, Yolanda happens to know the property is still nowhere near completion — the house is an empty shell and the driveway and grounds are still all ripped up. We also happen to be of the opinion that the DoJ may have a tough time getting another $17.5 million for a property in this condition, well-located as it may be.

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For the last few years, Mr. Aziz has been staying in a penthouse suite at the ultra-swank L’Ermitage Hotel in Beverly Hills (owned by Jho Low, natch) or one of those other pricey hotel/condo developments — Yolanda can’t recall which one off the top of her overworked head.

 

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1423 Oriole Drive, Los Angeles (Bird Streets) — “Priciest house in the Hollywood Hills”

In November 2012, our boy Jho Low himself forked out a stunning $38,980,000 in stolen loot — through “Oriole Drive LA LLC” for  the “Montalban House” in the Bird Streets. Or what remains of the Montalban House, at least. As you can see, the property underwent a major facelift and expansion a few years ago. The renovation was drawn up by McClean Design and funded by Irish developer Dean McKillen and local guy Nile Niami.

Not only was this fully double the previous record price paid for a house in the Hollywood Hills, it was also the biggest sale in 2012 for all of LA County.

While there aren’t too many details of the property publicly available, we do know it may have as much as 18,000 square feet of living space under roof. There are two pools — one in the “front yard” and one out back over the massive teak (?) deck. There’s also a glass-walled garage, a guard house and a guest house. For more info on the property, reference Yolanda’s original post here.

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The house is one of just three residences perched on what is known as the “Crown of the Bird Streets” a name given to a pie-shaped promontory that provides extraordinary views in every direction and is widely believed to be the best slice of real estate in the hills. It’s a trophy property for sure, although Yolanda thinks it looks like a giant wart on the hillside. Just our blunt opinion, kiddies.

 

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1201 Laurel Way, Beverly Hills — “Everyone’s favorite illegal mega-mansion”

Built over a period of 5+ years by a local developer named Richard Papalian and designed by Palumbo Design Group, this project attracted some controversy and a lawsuit for the techniques employed by Mr. Papalion when constructing the place, including demolishing 90% of the original structure on the site when he was only allowed up to 50% and building 23 feet high instead of the allowed 14 feet.

Sited on a .83-acre lot, the 11,000-square-foot glass-walled extravaganza has low, wide views across the LA basin and to the ocean beyond. The property is entered through tall driveway gates that actually pass under the house and lead to a motor court and a multi-car glass-walled garage beyond. The main residence itself sports 6 bedrooms and 9.5 bathrooms, in addition to guest quarters.

Outside, there’s a large marble-paved terrace with a barbecue area, an infinity pool and infinity spa, and — oddly — a thin, moat-like channel that surrounds nearly the entirety the house. Holy crap. What a nightmare that must be to clean, though it’s certainly an impressive statement. Bet Mr. Al-Qubaisi’s pool boy gets a good workout, at least.

Khadem Al-Qubaisi paid $31,000,000 for the property in February 2014 using “Laurel Beverly Holdings LLC”, an entity managed by Hakkasan’s former CEO (and professional front guy, apparently) Neil Moffitt.

Not only did Yolanda hear that Mr. Al-Qubaisi never moved into this house, but we’re told he “tore apart and remodeled the residence” after purchasing. Again, we can’t fathom why a brand-new ultra-chic never-lived-in mega-mansion would need a major remodel, but that’s what happened. These guys know how to piss away the money.

In October 2015, when the 1MDB shit was ready to hit the fan, Mr. Al-Qubaisi flipped the house back onto the market with an ask of $42,000,000. Oddly, the property is listed with many of the exact same photos that were used to market the place back when it originally sold in 2014.

Anyway, he price tumbled to $38,000,000 a few months later and as of May (2016) the house has — according to the MLS — been in escrow with an unknown buyer at an unknown price. We’re not sure if the seizure of assets will cause the sale to be cancelled or if the DoJ will just snatch the money once the transaction closes. Guess we’ll have to wait and see, hmm?

 

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1169 N. Hillcrest Road, Beverly Hills — “I’m bald! Call me Little Mount Baldy.”

In March 2014, just one month after purchasing his mansion on Laurel Way, Mr. Al-Qubaisi dropped $15,000,000 more of 1MDB cash — through “1169 Hillcrest LLC” — on a vacant 1-acre parcel in a very posh pocket near the top of Beverly Hills’ Trousdale Estates neighborhood. He had some fancy renderings done up by Palumbo Design — the same outfit who designed his Bev Hills mansion — and then flipped the still-vacant spread onto the market in January (2016) with a billionaires-only $35,000,000 pricetag. The ask unexpectedly and briefly ballooned to $39,900,000 in May, only to drop back down to its current $33,900,000.

While it may seem audacious for Mr. Al-Qubaisi to think he can more than double his original (stolen) cash investment without doing a damn thing to the land, keep in mind that the parcel is one of only 10 properties in the highly-desirably “upper cul-de-sac” area of Hillcrest Road. Directly next door, hedge fund mogul David Kabiller recently dropped more than $50,000,000 for a vacant two-parcel compound. Then there’s Nile Niami who is building a spec-mansion nearby that he will list for a whopping $90,000,000. Next door to that is the mega-mansion that Bruce Makowsky unloaded to Swedish video game billionaire Markus Persson for a record-breaking $70,000,000 back in 2014. At the end of the cul-de-sac is a massive mansion owned by Lebanese-Nigerian billionaire Gilbert Chagoury that is currently on the market for $135,000,000. As a teardown. Has Trousdale Estates gone bat-poop crazy, or what?!

 

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Altogether, for these four properties alone, our merry band of billionaire bandits dropped a stupefying $102,480,000. And trust Yolanda when she says this barely scratches the surface on the amount of cash spent by these fools.

Though most of the (allegedly) guilty properties refused to comment on the DoJ’s allegations, Red Granite (the film studio that produced “Wolf of Wall Street” and is headed by Riza Aziz) released a statement affirming they are “confident that when the facts come out, it will be clear that Riza Aziz and Red Granite did nothing wrong.”

Uh-huh. Suuuuure. Plz, hunny.

Earlier this week, in a press conference delivered with the asset-seizure lawsuit, Leslie R. Caldwell of the Department of Justice specifically attacked the use of shell companies (like the ones used to purchase all four of these aforementioned properties). “This case is a perfect example of how shell companies can be used by criminals and kleptocrats and other people to steal money, hide money, launder money and make it very difficult for law enforcement to find out who controls that money,”

Yolanda does not disagree with Ms. Caldwell about her shell company description. But we do pray that the DoJ doesn’t come down too hard on their use. Most expensive houses in LA are purchased through shell companies — if those go away and all we’re left with is boring ol’ names, what’s your gurl gonna discuss up in here? Snooze.

6 Replies to “The Department of Justice moves to seize $100 million worth of prime LA real estate”

  1. Rabbi Hedda LaCasa says: Reply

    Enthralling investigation Ms. Y! Ironically, The Wolf of Wall Street was not distributed in Malaysia, due to morality concerns related to the content of the film.

  2. House 1: teardown. Need some mouthwash for the eyes after looking at that. Eyewash?
    House 2: Top end construction work and materials, but it comes off looking way too corporate
    House 3: see House 2
    House 4 would make a nice burial ground for these three stooges.

  3. Nile is kind of dumb to tell everyone he thought he’d sell the house for $40m but now is asking $90m. The spec bubble has popped— most of these crazy sales have been done with illegal money. The Chinese hunted for deals for the most part and their abilities to purchase seem to have waned as well. Russians seem to go for more traditional homes and local US citizens seem to avoid over paying that crazily as well. He’s going to probably get less than the Minecraft mansion… but that still a huge profit.

  4. House #1– isn’t a tear down but needs a cosmetic reno.

    House #2– is gorgeous up close, but yes, from a far is a blight on the hillside.

    House #3– I assume the sale will go through and the funds will be seized. I have been in it both before and after the original sale– nothing has changed. It was just a rumor that it was gutted and or renovated.

    Property 4– Will sell for half of what it’s asking if it doesn’t get seized and disappear for years.

  5. Even more of a statement than the “moat” around 1201 Laurel Way is the tiny strip of grass between the moat and the back wall of the garage. Some poor gardener has to keep that trimmed and probably has to do it all by hand while standing in the moat.

  6. How long before 1423 goes to auction you believe, any update on the status? Your blog is awesome by the way!

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