Alleged 1MDB Conspirator Says He Is a Scapegoat for EmiratisFormer royal aide jailed in Abu Dhabi says U.A.E. authorities are pressing him to surrender his assets
Tom Wright Updated Jan. 23, 2019 10:02 a.m. ET
Khadem Al Qubaisi, shown at a news conference in Stuttgart, Germany, in 2009, has been detained in Abu Dhabi since 2016. Photo: © johannes eisele /reuters
A former top aide to a powerful member of Abu Dhabi’s royal family alleged from prison that he is unfairly being blamed for the United Arab Emirates’ role in one of the world’s biggest financial scandals, and that Emirati authorities are trying to force him to turn over his assets.
Khadem Al Qubaisi was once one of the Middle East’s highflying businessmen. He helped negotiate the bailout of Barclays Bank in 2008 and a multibillion-dollar investment into Daimler AG on behalf of his boss, Sheikh Mansour Bin Zayed al Nahyan, the United Arab Emirates’ deputy prime minister and a member of the royal family.
The identification card of Khadem Al Qubaisi, former managing director of International Petroleum Investment Co., at Al Wathba Prison in Abu Dhabi.
The identification card of Khadem Al Qubaisi, former managing director of International Petroleum Investment Co., at Al Wathba Prison in Abu Dhabi. Photo: Courtesy of Khadem Al Qubaisi
Abu Dhabi authorities arrested Mr. Al Qubaisi in 2016 amid U.S. Justice Department accusations that he and several co-conspirators collectively stole billions of dollars from 1Malaysia Development Bhd., an investment fund ostensibly set up to help develop the Malaysian economy.
Mr. Al Qubaisi received $471 million of stolen funds into his private account in Luxembourg and used some of it to buy U.S. real estate, according to civil complaints by the Justice Department targeting his assets. Mr. Al Qubaisi hasn’t been charged with any crime in the U.A.E. or U.S.
In his first media interview since he was imprisoned in Abu Dhabi, Mr. Al Qubaisi said from a prison phone that he is being blamed as a “scapegoat” by Sheikh Mansour and Abu Dhabi authorities. Sheikh Mansour is also chairman of the Abu Dhabi Judicial Department, which oversees all criminal cases in the emirate.
Mr. Al Qubaisi said authorities are pressing him to turn over his assets to a private company owned by the sheikh.
The Abu Dhabi government declined to comment. Representatives for Sheikh Mansour and Das Holding, an Abu Dhabi company he controls, didn’t respond to multiple requests for comment.
An Abu Dhabi-based lawyer involved in Mr. Al Qubaisi’s case said Mr. Al Qubaisi “abused and exceeded his authorities” at Abu Dhabi sovereign funds “to achieve personal and illegal gains.”
“Now he is more concerned about keeping his illegal wealth than doing the right thing by admitting his guilt and returning the proceeds he obtained from his criminal activities,” the lawyer said.
Mr. Al Qubaisi said he had acted with the knowledge of more-senior U.A.E. officials when he steered a sovereign-wealth fund he managed, International Petroleum Investment Co., to become a key business partner of 1MDB, including guaranteeing $3.5 billion in 1MDB bonds.
That deal soured when billions of dollars went missing from 1MDB, setting off a multiyear legal battle between sovereign funds in the U.A.E. and Malaysia.
U.S. authorities say Mr. Al Qubaisi helped funnel 1MDB money to conspirators through companies set up to look like subsidiaries of IPIC, the U.A.E. fund.
Mr. Al Qubaisi didn’t address the specifics of the allegations against him in the interview.
“I did this deal but I did it on behalf of the government of Abu Dhabi,” he said. Now “they are putting everything on my back.”
Sheikh Mansour was chairman of IPIC at the time Mr. Al Qubaisi was agreeing to support 1MDB. After Mr. Al Qubaisi’s arrest, IPIC was folded into another U.A.E. fund, where Sheikh Mansour is a board member.
During two five-minute phone calls from Al Wathba prison in Abu Dhabi, Mr. Al Qubaisi said he hadn’t been interrogated by any law enforcement body about 1MDB deals. Instead, U.A.E. officers periodically come and pressure him to sign over his assets, including land and villas in the U.A.E., to Das Holding, he said.
He said that earlier this month he was handcuffed to a window in a corridor and left for 24 hours.
“If I did something wrong for this Malaysia deal, ok, they can go and take my assets, no problem,” he said. “Why is a private company trying to take control of my assets?”
Two nephews who had power of attorney over some of his assets had been detained until they signed over $40 million in luxury cars and land to Das Holding, Mr. Al Qubaisi said. The nephews didn’t respond to requests for comment.
The Abu Dhabi lawyer involved in the case said Mr. Al Qubaisi’s description of his prison conditions and treatment were inaccurate.
Mr. Al Qubaisi said his plan was to “die here in this place or to get out.”
Soon after Mr. Al Qubaisi’s phone calls to The Wall Street Journal, an intermediary in Abu Dhabi who set up the calls was detained and questioned by Abu Dhabi security services, according to a person familiar with the situation.
Mr. Al Qubaisi is wanted for questioning in several other countries for allegedly pilfering money from 1MDB and committing other financial crimes, according to this person. Abu Dhabi authorities haven’t agreed to let him testify elsewhere.
Malaysia has charged former Prime Minister Najib Razak with money laundering in relation to the state fund 1MDB. Mr. Najib has denied all charges against him.
Malaysia has charged former Prime Minister Najib Razak with money laundering in relation to the state fund 1MDB. Mr. Najib has denied all charges against him. Photo: olivia harris/Reuters
The Justice Department is seeking to reclaim luxury homes in the U.S. that Mr. Al Qubaisi allegedly bought with funds stolen from 1MDB. The department declined to comment on the matter.
Luxembourg and Swiss authorities have frozen tens of millions of dollars in accounts controlled by Mr. Al Qubaisi and French authorities have seized real estate.
Financial documents reviewed by The Journal after the interviews show an even bigger asset was largely financed with 1MDB money but hasn’t been targeted by authorities: a half billion-dollar yacht called the Topaz. Mr. Al Qubaisi directed companies he controlled to use approximately €116 million ($132 million) originating from 1MDB for debt payments on the yacht between 2012 and 2015, the documents show.
The Topaz—a 482-foot yacht with eight floors, a swimming pool, cinema and two helicopter pads—was used and controlled by Sheikh Mansour until at least 2015, according to people familiar with the matter.
Jho Low, the Malaysian financier who U.S. officials allege masterminded the 1MDB scandal, leased it on multiple occasions, including to attend the 2014 FIFA World Cup with Leonardo DiCaprio and other celebrities, according to people familiar with the matter. Mr. Low has denied wrongdoing.
The yacht’s current ownership couldn’t be determined. The remaining €271 million of an original €464.3 million loan to buy the boat was fully paid off last April, according to registry filings. The documents don’t specify who paid it.
https://www.wsj.com/articles/alleged-1m ... 1548239402 
