Boies Schiller Steps in for Film Company Named in Money Laundering Case

Money Laundering Case
Money Laundering Case

Boies Schiller & Flexner has joined the cast of “The Wolf of Wall Street”—the lawsuit.

On Monday partner Matthew Schwartz asked the court to permit his appearance on behalf of Red Granite Pictures Inc., which owns the rights to the 2013 movie. Red Granite was co-founded by Riza Aziz, the Malaysian prime minister’s stepson, who is accused of being at the center of a massive money laundering scheme.

On July 20 the U.S. Department of Justice filed a civil asset forfeiture case in Los Angeles federal district court seeking the proceeds of the film, claiming that it was funded in part with money looted from the government of Malaysia. The DOJ claims that Red Granite received $64 million in illegally diverted money to fund the Leonardo DiCaprio blockbuster and other productions.

Overall, U.S. prosecutors claim that more than $3.5 billion was illegally taken from a development company owned by the Malaysian government to fund a long list of luxury purchases and investments by Aziz and others, including a Beverly Hills mansion, a private jet, casino gambling junkets and a stake in “The Wolf of Wall Street.”

Boies Schiller’s Schwartz, a former Manhattan federal prosecutor, has negotiated an agreement with the prosecutors to put the film’s proceeds aside after some of Red Granite’s creditors have been paid, according to a document filed with court Monday.

Red Granite so far is the only entity connected to the case to make an appearance with counsel. The government has filed 15 other nearly identical actions involving other assets allegedly purchased with stolen money.

“To Red Granite’s knowledge, none of the funding it received four years ago was in any way illegitimate, and there is nothing in today’s civil lawsuit claiming that Red Granite knew otherwise,” the film company said in a statement. “Red Granite continues to cooperate fully with all inquiries.”

Boies Schiller’s Schwartz recently represented Red Granite in an unusual stalking and invasion of privacy lawsuit that the company filed in Los Angeles federal court. The July 2015 complaint alleges that several unknown people were harassing its employees and one of its outside financial advisers with anonymous threatening emails and phone calls. The lawsuit sought to identify these defendants and hold them responsible. Red Granite dropped the lawsuit in February.

It’s not clear if the alleged harassment was related to the transactions described in the DOJ’s complaint.

As we previously noted, five major U.S. law firms were listed in the asset forfeiture complaint as having connections to transactions described in the case, although none of the firms is accused of wrongdoing. Hundreds of millions of dollars of allegedly diverted funds flowed through client accounts held by Shearman & Sterling; DLA Piper; Sullivan & Cromwell; and Greenberg Traurig. The fifth firm, Akin Gump Strauss Hauer & Feld, appears to have been more peripherally involved, according to the complaint.

Shearman & Sterling has said in a statement that it has “comprehensive ‘know your customer’ procedures, which it applies to all clients” and that it had “no knowledge of any improper source of funds.” Greenberg Traurig has said that it “did not represent any entity or person who allegedly misappropriated or misused money that the government is seeking to recover in this action.” The other firms did not provide comments.

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