Hakkasan Group Linked to Money Laundering in New Report, Former Chairman Arrested.

Khadem Al Qubaisi, the former chairman of Hakkasan nightclub, was arrested in connection with Abu Dhabi authorities’ investigation into the scandal involving the 1Malaysia Development Bhd., or 1MDB, the Wall Street Journal reported. He was not yet charged. This spring, Qubaisi’s assets were frozen and he was told he could not leave the United Arab Emirates.

A few months ago we did an article about Hakkasan, and accusations that were coming out of law enforcement and foreign journalists that the main investors and now former Chairman of Hakkasan were involved in what is alleged to be billions of dollars of money laundering.  At the time we had spoken to a representative at the Department of Justice, who informed us that they were looking at Khadem Al-Qubasi, his investments and the investments that he made in Hakkasan Group. However, since these were just allegations and no arrests were made, we gave Mr. Moffit, the CEO of Hakkasan equal time to explain why there was no connection to the company he ran.

Since then the US Department of Justice, and police in several countries including Switzerland have actively seized much of Al-Quabaisi’s assets, issued arrest warrants, and according to our sources, they are now actively looking at all of the investment of Al-Quabaisi’s including Hakkasan. According to John Cameron of MagneticMag, new documents have been made public that shed light on Al-Quabaisi’s investments.

According to Cameron, “If a document uncovered during recent investigations into the origin of Hakkasan and Omnia’s startup capital means what officials think it does, though, neither club might even have another chance to place.

An article from last September in Malaysian investigative publication Sawarak Report – whose incisive exposés have prompted officials of numerous countries to officially investigate various matters – first connected Al-Qubaisi to funds that had gone missing from accounts belonging to 1Malaysia Development Berhad (1MDB). 1MDB is a government-owned strategic development company that puts taxes and investment capital towards initiatives intended to stimulate the Malaysian economy.”

The Sarawak Report, based in Indonesia has been covering the money laundering scandal for some time, and  just recently said they have “traced crucial evidence linking the Luxembourg bank accounts, which received hundreds of millions of dollars stolen from 1MDB, with the global Hakkasan nightclub and restaurant chain centered in Las Vegas.” You can read the full report here.

The report is interesting, and shows how multiple companies and offshore accounts were used to eventually get the money to Hakkasan Group, and why their investments may be tainted.

If these accusations are correct, Hakkasan Group is in serious trouble. My contacts the DOJ US Attorney’s Office told me that they were aware of the report but wouldn’t comment on its validity and what steps they are taking. He however made it clear they were “very interested” in any information that could be sent their way about the connections and where the money might have gone.

If Hakkasan has built an empire on what is basically stolen money, their entire company could be eventually seized and forced to sell their properties and clubs.

How will Neil Moffitt fare in this? While some have made claims that he himself knew about the money laundering and benefited through real estate deals, and use of multimillion dollar apartments. Hopefully if the accusations are true, this means that he can stay at the helm of the company, and that other non-tainted investments may keep it afloat in order to be sold, or to get more funding.

However,  right now things look like they could go either way. If more evidence is uncovered, I wouldn’t be surprised that within the next 6 months Hakassan may be shut down or forced to be sold.

Hakkasan claims none of the money came from illegal funds, and their VP of Legal Affairs Brandon Roos, who had previous sent this publication threatening emails, claims that their own “internal investigation” proves it.

What about the tens of millions of dollars paid to DJs for performing at Hakkasan? According to several attorneys that I spoke to, there is reason to think that if the money is definitively linked to money laundering, that DJs that have been paid by Hakassan, including Tiesto could be forced to pay back their enormous payments they received to the feds, via a process called disgorgement.

We can only hope Hakkasan is correct, and they received only legal funds and their (former) Chairman is not-guilty.

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Photo Credit: Scott Roeben http://vitalvegas.com