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M/Y Equanimity Seized in Assets Investigation

Mar 1st 18

   

Indonesia police seized the 91.5-meter M/Y Equanimity near Bali as part of an ongoing multi-billion dollar asset investigation. She was allegedly purchased with funds siphoned from the Malaysian sovereign wealth fund 1MDB.  

  

The Wall Street Journal reports that the Indonesian police received a request from the FBI on February 21 to search for the boat, along with evidence of money laundering linked to it. The vessel was found a few days later off the coast of Lombok. The FBI personnel remained on the ground in Bali to assist the police. 

  

Local news source Malaysiakini reports that the yacht was first detected entering Indonesian waters last November, passing through Raja Ampat before moving toward Lombok and Bali. It was believed to be sailing towards the republic to evade U.S. authorities investigating the scandal.  

  

Indonesian police claimed that the captain turned off the vessel’s automated identification system (AIS) to avoid detection. “While sailing, Capt. Rolf (no other name provided) had switched off the vessel’s AIS several times, so the vessel was undetectable along Philippine waters and towards the southeast of Singapore,” Indonesian police spokesperson M. Iqbal told Detiknews. “At the time, U.S. authorities had issued a seizure warrant.” 

  

There were 34 crew on board when the boat was seized. Agung Setya, director of economic and special crimes at Indonesia’s criminal investigation bureau, told Metro TV, “We have been inspecting the crew since yesterday and now we are taking action, since we have received approval from the court.” 

  

While Indonesian authorities and the FBI worked together on the money laundering case, it’s unclear how the investigation will proceed. 

  

“We will see how this develops…Whether we can do a joint investigation later or whether we can hand it over later, we are in the process of collecting and investigating,” Setya told Metro TV. 

  

The Department of Justice (DoJ) is seeking to seize approximately $1 billion worth of assets allegedly bought with the misappropriated 1MDB funds by the yacht’s owner, Jho Low. Most of the assets are in the U.S., but the vessel has spent most of her time in Thailand since late 2016, according to the Wall Street Journal. 

  

Other assets include a private jet, a hotel and real estate in New York, and a $107-million interest in EMI Music Publishing. Model and actress Miranda Kerr returned a jewelry set given to her by Low, and actor Leonardo DiCaprio returned an Oscar once owned by actor Marlon Brando along with other items that were funded with the 1MDB money.  

  

The boat is now anchored off Bali and officials are currently looking for Low. 

UPDATE 4/3/18: According to a statement issued by Equanimity (Cayman) Limited, the vessel’s legal owner and claimant, the lawfulness of M/Y Equanimity’s seizure is being challenged in both the U.S. and Indonesia.

Equanimity (Cayman) Limited “believe that the [U.S. Department of Justice] DOJ and the Indonesian authorities have acted outside the bounds of legal rules in their respective nations, and Claimants have filed documents in the courts of both countries to demonstrate this.”

The press release notes that the DOJ put the case on hold last year and did not move forward in an attempt to prove any impropriety. During the court-ordered stay, the DOJ attempted to seize the vessel in Indonesia. The press release maintains that the DOJ had not approached the vessel’s owner, the yacht’s management company, or the vessel’s flag state to seek possession of the vessel. “Although it could have taken any of these courses of action at any time, the DOJ instead opted for a needlessly costly and ill-conceived seizure in Indonesian waters that jeopardizes the value of the vessel,” the statement reads. “The DOJ’s recent filing in California is an attempt to use disputed allegations of historic conduct to paper over its own unlawful conduct in Indonesia.”

The claimant has filed a reply intended to correct “factual misstatements and mischaracterizations.” The report claims that, “Contrary to the assertions made in the Government’s filing, the location of the vessel has never been a secret nor have the Claimants taken steps to jeopardize the vessel’s value.”

According to Equanimity Limited, the course of action proposed by the DOJ will “drastically reduce the vessel’s value and expose the vessel and its crew to dangers at sea.” They maintain that they are willing to have the vessel sold while the case is pending “provided that the sale is conducted under readily-achievable market conditions that will reflect the vessel’s true market value and generate a fair price.”

“The government has not taken any steps to prove its case or entitlement to the vessel, and there have been no findings that any wrongdoing occurred. The Claimants, as owners of the vessel, intend to continue to protect their rights and their property.”

UPDATE: 4/18/2018
An Indonesian court has blocked the U.S. Justice Department’s attempts to take control of M/Y Equanimity, claiming that FBI and local police did not follow the correct procedures when impounding the vessel, making the seizure invalid, the Wall Street Journal reports. The Indonesian court has ordered the vessel returned to its owner.

An Australian ABC affiliate says this means that the crew were required to remain aboard the vessel are now free to leave, although they maintain the captain remains under investigation for “allegedly violating maritime law for turning off the vessel’s transponder while in Indonesian waters.”

But the battle in the U.S. will continue, local online news portal Malaysia Kini reports. The parties involved in the dispute will face a hearing on April 30 at the California Central District Court to learn what comes next in the U.S.

The 91.5-meter vessel was originally impounded in Bali in February as part of an ongoing multi-billion-dollar corruption investigation. The DOJ alleged that the vessel was purchased with proceeds from Malaysia’s 1MDB corruption scandal. Stay tuned for more developments.

 
UPDATE: 5/1/2018

The U.S. Justice Department has filed a formal request for mutual legal assistance (MLA) to Indonesia to help seize M/Y Equanimity, local news source Malaysia Kini reports. This request was made after the Jakarta South District Court decided on April 17 to invalidate the seizure made by the Indonesian police and the U.S. Federal Bureau of Investigation on February 28.

The DOJ’s Office of International Affairs filed the MLA request to the Indonesian Ministry of Law and Human Rights on April 19.

The court hearing for the DOJ’s application for protective custody that was scheduled for April 30 has been postponed to May 14 because several lawyers from Equanimity Limited would be attending other cases; both parties agreed to the postponement.

UPDATE: 5/16/2018
According to Bloomberg, Low Taek Jho was ordered on May 15 to turn over M/Y Equanimity to U.S. authorities, who plan to sell it in the U.S. after sailing it from Indonesia. U.S. District Judge Dale Fischer reportedly said her ruling “doesn’t impede on the sovereignty” of Indonesia. “This is not a matter of the United States government forcibly seizing property within a foreign country without the proper authority from that country’s government,” Judge Fischer said in the Bloomberg report. Now, the trusts that hold Equanimity’s title must turn it over without seizure by the U.S. in Indonesian waters. The trusts also have 30 days to challenge the decision.