Former Malaysian leader arrested for theft, money laundering

Former Malaysian Prime Minister Najib Razak was arrested Tuesday by anti-graft investigators and will be charged over his alleged role in the multibillion-dollar looting of a state investment fund, officials said.

A government task force probing alleged theft and money laundering at the 1MDB state investment fund said Mr. Najib's arrest was linked to the suspicious transfer of $10.6 million into his bank account from SRC International, a former 1MDB unit, using multiple intermediary companies.

It said in a brief statement that Najib will be brought to court on Wednesday to be charged, but didn't give details of the charges against him.

Najib's arrest comes nearly two months after his coalition's stunning rejection by voters in a May 9 general election.

The new government has reopened investigations into 1MDB that were stifled under Najib's rule. Najib and his wife, who have been questioned over the SRC issue by the anti-graft agency, have been barred from leaving the country. Police have also seized jewelry and valuables valued at more than $272 million from properties linked to Najib, who has denied any wrongdoing.

"This was the inevitable outcome when Najib lost the election and lost his political immunity," Bridget Welsh, a political science professor at John Cabot University in Rome, said in an email. "It shows the resolve of the new government to address previous abuses of power. It has been done judiciously so far and speaks to a needed reckoning for Malaysia and a key step toward a cleaner governance."

Malaysia's Bernama news agency said Najib is expected to face more than 10 counts of committing criminal breach of trust linked to SRC International. It said Malaysia's new attorney general, Tommy Thomas, will head the prosecution in the case.

The anti-corruption agency earlier Tuesday questioned Riza Aziz, Najib's stepson and a Hollywood film producer, as it stepped up its probe on 1MDB. Mr. Riza was solemn as he arrived at the anti-graft office and didn't speak to reporters.

United States investigators say Riza's company, Red Granite Pictures Inc., used money stolen from 1MDB to finance Hollywood films including the Martin Scorsese-directed "The Wolf of Wall Street." Red Granite in March agreed to pay the US government $60 million to settle claims that it benefited from the 1MDB scandal.

The civil suit against Red Granite was part of an effort to recover some of the $4.5 billion that US prosecutors say was stolen from 1MDB. They say hundreds of millions from 1MDB landed in Najib's bank accounts.

The 1MDB government task force this week said 408 bank accounts involving funds of nearly $272 million had been frozen. It said the accounts, belonging to 81 people and 55 companies, are thought to have received funds from 1MDB between 2011 and 2015.

This story was reported by The Associated Press.