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British National Charged in Malaysia 1MDB Graft Scandal

FILE - Construction workers stand in front of a 1Malaysia Development Berhad (1MDB) billboard at the Tun Razak Exchange development in Kuala Lumpur, Malaysia.

Malaysian authorities charged Paul Stadlen, a British national who had worked for disgraced former prime minister Najib Razak as a media adviser, with two counts of money laundering, state news agency Bernama reported Wednesday.

Najib was ousted in a general election last year amid widespread public anger over a multibillion-dollar graft scandal at state fund 1Malaysia Development Berhad (1MDB).

Malaysian anti-graft investigators issued a notice in November calling for Stadlen, whose whereabouts are unknown, to assist in its 1MDB probe. Malaysian media reports say he fled the country shortly after Najib’s shock defeat in the May 9 election.

Whereabouts unknown

Stadlen was charged in absentia Wednesday with laundering a total of 14.3 million ringgit ($3.5 million) that were proceeds from illegal activities and had been deposited in the client account of a law firm that prosecutors claimed received money from Najib.

Stadlen was accused of ordering the sum to be transferred from the account to several companies and individuals between June 2014 and August 2015, Bernama said, citing charge sheets filed at a Kuala Lumpur court.

Mishcon de Reya, a London-based law firm representing Stadlen, said in a statement their client denied wrongdoing and described the charges against him as politically motivated, media reported.

“The Malaysian government has a political agenda, and Stadlen is now caught up in the backlash against former prime minister Najib,” Kevin Gold, Mishcon de Reya’s managing partner, was quoted as saying by news portal Malaysiakini.

The firm did not immediately respond to a Reuters request for comment.

Mohamad Hafarizam Harun, the head of the Najib-linked law firm, pleaded not guilty to two counts of money laundering for depositing checks totaling 15 million ringgit from Najib into his firm’s client account, Bernama said Thursday.

Investigations in six countries

At least six countries are investigating 1MDB, a state fund founded by Najib in 2009.

Malaysian and U.S. investigators say about $4.5 billion was siphoned from the fund and that about $1 billion made its way into Najib’s personal bank accounts.

Since the election, Najib has been hit with 42 criminal charges, most of them linked to 1MDB. He has pleaded not guilty.