×

Red Granite Pays Off $60 Million Settlement in Malaysian Corruption Case (EXCLUSIVE)

Red Granite Pictures has paid off the balance of its $60 million settlement with the U.S. government, bringing an early end to its involvement in a $4.5 billion Malaysian corruption case.

The production company behind “The Wolf of Wall Street” and “Daddy’s Home” reached a deal with federal prosecutors in March. Under the agreement, the company did not admit wrongdoing and promised to pay the settlement amount in three installments over the course of nearly a year. The company has now paid the final installment four months ahead of schedule, officially ending the case.

Red Granite paid its obligation to the government in full,” they said in a statement. “The company is pleased to put this matter behind it.”

Red Granite was accused of using more than $100 million embezzled from 1MDB, a Malaysian development fund. The 1MDB scandal led to the downfall of Malaysian Prime Minister Najib Razak, who was recently arrested in Malaysia on corruption charges. His stepson, Riza Aziz, is the CEO of Red Granite.

Red Granite borrowed from Brevet Capital in order to finance the settlement, according to an industry source. The funds will ultimately be returned to the Malaysian government, once certain processing fees are paid.

Under the terms of the settlement, Red Granite had until January to complete its restitution. By paying early, the company avoids paying interest on the balance, which was accruing at 2% per year. The settlement was surprising to some observers, because the amount is roughly equivalent to the valuation that the government placed on the production company, according to knowledgeable sources. Red Granite made the rounds in the investment community to try to get funding, reaching out to the likes of Comerica, Fortress, and Aperture Capital, industry sources tell Variety. Financial terms of the loan from Brevet are unclear.

John Kucera, assistant U.S. attorney for the central district of California, arranged the settlement. Benjamin Waisbren, a financial adviser and Hollywood producer, also played an integral role, advising on the deal and helping the Justice Department value Red Granite. Waisbren declined to comment.

“This case was resolved to the satisfaction of both sides with the payment of $60 million, which fell squarely in the estimated valuation of Red Granite Pictures, as determined by an outside expert,” said Thom Mrozek, a spokesman for the U.S. Attorney’s Office in Los Angeles.

The Red Granite case has generated a great deal of media attention because of its mixture of celebrity and industrial-scale corruption. Najib lost his re-election bid and was arrested last summer on embezzlement charges.

Prosecutors filed a civil asset forfeiture action against Red Granite in July 2016, as part of a much broader effort to recoup more than $1 billion allegedly embezzled from 1MDB, a Malaysian state-run development fund. Money that was allegedly stolen from the fund didn’t just pay for film investments, it was also reportedly used to throw lavish parties, including a Cannes bash that included a Jamie Foxx/Kanye West “Gold Digger” duet, and elaborate gifts such as the Oscar that Marlon Brando won for “On the Waterfront” that Red Granite gave to Leonardo DiCaprio.

The Justice Department has accused financier Jho Low of masterminding a scheme to steal $4.5 billion from the fund.

Despite the negative headlines, Red Granite is continuing to operate as a going concern. It is unclear if Aziz, who reportedly fled the U.S., will continue as CEO and who owns the company. Its future looks cloudy. Red Granite financed the recent flop “Papillon,” but has little else in development. It only has roughly a half dozen films in its library, and most of these are only generating revenues from television licensing deals.

Aziz’s legal problems may not be behind him. The government is also seeking to seize several luxury properties, which Aziz allegedly bought with stolen funds. Federal prosecutors in Brooklyn are also pursuing a criminal investigation, and he has been questioned by Malaysian anti-corruption authorities.

More Film

  • Thierry Frémaux, José Luis Rebordinos Honored

    Thierry Frémaux, José Luis Rebordinos Named Honorary Argentine Academy Members

    BUENOS AIRES — In a ceremony just before Friday’s prize announcements at Ventana Sur, Cannes chief Thierry Frémaux and José Luis Rebordinos, director of the San Sebastian Festival, were named honorary members of Argentina’s Academy of Motion Picture Arts and Sciences, in a new move for the Academy, out through by its new president, Bernardo [...]

  • Nona

    Film Review: 'Nona'

    Twenty years and 12 features down the line, it’s still hard to peg the directorial sensibility of Michael Polish, with or without the presence of brother Mark as frequent co-writer and actor. His output has been all over the place, from early Lynchian quirkfests to the very middle-of-the-road inspirational dramedy “The Astronaut Farmer,” not to [...]

  • Pawel Pawlikowski "Cold War"

    Pawel Pawlikowski's 'Cold War' Wins for Best Film, Director at European Film Awards

    “Cold War,” Pawel Pawlikowski’s black-and-white romance set in the 1950s, scooped the prizes for best film, director and screenplay at the 31st edition of the European Film Awards on Saturday. “Cold War” star Joanna Kulig also won the award for best actress. Marcello Fonte, the star of Matteo Garrone’s “Dogman,” won for best actor. Armando Iannucci’s [...]

  • The Favourite Bohemian Rapsody Star is

    The Best Movie Scenes of 2018

    When we think back on a movie that transported us, we often focus on a great scene — or maybe the greatest scene — in it. It’s natural. Those scenes are more than just defining. They can be the moment that lifts a movie into the stratosphere, that takes it to the higher reaches of [...]

  • Spider-Man: Into the Spider-Verse

    Box Office: 'Spider-Man: Into the Spider-Verse' Soars Toward $35-40 Million Debut

    “Spider-Man: Into the Spider-Verse” is swinging into theaters on a high note. Sony-Marvel’s latest output is launching to $42 million from 3,813 North American locations in its debut, though other more conservative estimates place that number at $35.5 million. The animated superhero story picked up $12.6 million on Friday, easily leading the pack for the weekend. [...]

  • Ventana Sur : Cinema226 Closes Four

    Cinema226 Announces Four Intl. Co-Productions, Hints at More (EXCLUSIVE)

    Mexico’s Cinema226, run by Marco Antonio Salgado and Sam Guillén, is driving into a raft of Mexico, Argentina and Spain co-productions, playing off the current vibrancy of Mexican film production funding and distribution outlets. Among the projects are titles which have been standouts at Ventana Sur’s Blood Window, the next film by Mexico-based Argentine filmmaker [...]

  • Ventana Sur Debates Gender Parity in

    Ventana Sur Debates Gender’s 50/50 in 2020 for Argentina Film Industry

    BUENOS AIRES — Despite recent gains, namely the equality pledge towards 50/50-2020 signed at the Mar del Plata Film Festival on Nov. 12, producer Magalí Nieva, pointed out that no representative from INCAA was present following the apparent resignation of its vice-president Fernando Juan Lima. “We are left without an interlocutor to discuss gender policies [...]

More From Our Brands

Access exclusive content