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Following another recent turning point in a now rapidly expanding international investigation, it has now been proven that at least $10 million of the funds used to finance Las Vegas nightclub Hakkasan were unlawfully transferred from Malaysian government entity 1Malaysia Development Berhad (1MDB). Over the past year the 1MDB scandal has unfolded into global conspiracy of unprecedented magnitude, linking numerous politicians, bankers, venture capitalists and entertainers around the world to roughly $3.5 billion in misappropriated funds.

The many faces of Khadem Al-Qubaisi

The many faces of Khadem Al-Qubaisi.

Hakkasan launched in 2013 as the result of a partnership between British nightlife entrepreneur Neil Moffitt and Abu Dhabi sovereign wealth fund manager Khadem Al-Qubaisi. The Hakkasan Group emerged as a major player in the burgeoning Las Vegas club scene practically overnight. Electronic music sensations like Calvin Harris and Tiësto hold residencies at the lavish destination, and last year the company moved to dominate the market by opening the extravagant Omnia Nightclub.

Hakkasan and DiCaprio Might be Going Down Together

Al-Qubaisi was arrested by United Arab Emirates officials last week. Around the same time, Malaysian investigative journalism website Sawarak Report uncovered a document explaining how capital siphoned from 1MDB could have been used to fund Hakkasan. By itself the document didn’t constitute definitive evidence that such a series of exchanges took place, but it helped investigators build a model that they could test against any evidence that might come into play.

vasco tasameem name change

The document established that the company Vasco Trust - which received money transfers determined to have been laundered from 1MDB - had changed its name to Tasameem Strategic Fund. Among other things, such a swap would have allowed it to more innocuously move said money to the Hakkasan Group’s parent company, Tasameem Real Estate LLC, which is owned by Al-Qubaisi.

However, a statement from Vasco Trust’s Edmond De Rothschild bank account turned over to the FBI and presented in a follow-up article reflects that the company transferred $10 million dollars to Tasameem in October of 2012 - before the name change had even taken place.

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Vasco Trust and Tasameem 10 million transfer

In May of the same year, Al-Qubaisi’s company, Aabar Investments PJS BVI, helped Malaysian tycoon Jho Low divert $577 million from 1MDB into his own company, Blackstone Asia Real Estate Partners. A matter of days beforehand, 1MDB had received $1.7 billion raised by Goldman Sachs to be put towards initiatives meant to nurture Malaysia’s struggling economy. Blackstone then transferred $158 million into the Vasco account, meaning that by extension the $10 million Vasco moved into Tasameem had been acquired by fraudulent means.

Blackstone Asia Vasco 158 million transfer

While the record of the transfer is enough to establish that the nightclub wasn’t built entirely on legitimate capital (despite what Hakkasan’s lawyers told the Wall Street Journal), $10 million might not be enough to result in the nightclub discontinuing business operations - particularly if its management is able to leverage enough company assets to cover it. If they aren't, however, it wouldn’t be the first time that U.S. officials seized a Las Vegas club.

A source told the New York Post that next month U.S. investigators will question an undisclosed party in Europe who they expect will illuminate the broader scope of Al-Qubaisi’s illegal business dealings. If the recent development is any indicator then an as-yet-unaccounted-for $372 million that disappeared from the Vasco account could very well have formed the financial backbone of Hakkasan. It’s possible that the nightclub might even be able to avoid seizure in the event that such suspicions are confirmed, though, as Moffitt and Al-Qubaisi appear to have positioned themselves to have backing from both sides of the political spectrum.

Until then, Moffitt has been subpoenaed and is cooperating with the investigation, and despite his ties to Al-Qubaisi he has not been directly implicated by any of the evidence presently available. On the other hand, the list of Jho Low’s alleged co-conspirators in the 1MDB scandal does include Malaysian Prime Minister Najib Razak and Red Granite Productions Chairman Riza Aziz, among others. 

The investigation continues as the focus has shifted to Goldman Sachs bankers who help make the entire operation possible. Najib Razak, the prime minster's step son and Hollywood producer, has also been charged by the Malaysian government.

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