The United States Justice Department has concluded that the Malaysian prime minister is linked to the billions of dollars embezzled from the 1MDB. This news comes a year after investigative journalists first uncovered the possible connection.

1MDB stands for 1Malaysia Development Berhad. It is a sovereign wealth fund, a state-owned investment company that can back a variety of securities. It was supposed to be used for investments whose profits would in turn be used to support the Malaysian people. 

About $6.5 billion of the funds assets came from bond sales, with more money coming from an international oil deal. Over $1 billion of those funds were then diverted into the United States via shell companies. 

With the government money, family and friends of Najib Razak, the prime minister, purchased luxury real-estate, financed movies, and bought lavish paintings.

While Singapore and Switzerland have also investigated the 1MDB, this is the most definitive action taken by a foreign government in this conspiracy. The U.S. is now demanding a forfeiture of the assets purchased with the embezzled money.

Months after the release of the "Panama Papers", this story comes at a time when governments are on the lookout for illegal transactions and misuse of shell companies. Unfortunately, the U.S. involvement in this case has forced a confrontation between U.S. prosecutors and Malaysia. Malaysia, an essential American ally, has been increasingly a major partner in counterterrorism. Their role as an ally has also allowed them to be a moderator between the U.S. and the communist nation of China.

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