Prime Minister Najib Razak's stepson Riza Aziz is contesting the US government's attempt to seize real estate properties allegedly bought with funds embezzled from 1MDB.
The Hollywood Reporter reported that in the filing last week, Riza claimed he is an "innocent owner" of the said assets.
In demanding a dismissal of the US Department of Justice's (DOJ) civil forfeiture suits, Riza's lawyer Matthew Schwartz said the US government had failed to include "essential details" about the supposed crimes.
"The alleged beneficial owner of the claimant (and therefore the defendant property), Riza Aziz, is neither alleged to have participated in any transactions involving 1MDB nor even to have knowledge of any transactions involving 1MDB - let alone knowledge of any supposed misappropriation.
"Thus, even taking the complaint’s allegations at face value, Mr Aziz plainly did not engage in a money-laundering transaction or any other offence.
“But without identifying the person or persons the government believes to be culpable, it is impossible to test the adequacy of the government's allegations..." the court papers read.
Schwartz stressed the US government had failed to allege, with specificity, Riza's involvement in the said transactions.
The lawyer compared the 1MDB case with the US once seizing Michael Jackson memorabilia from the son of the president of Equatorial Guinea, wrote The Hollywood Reporter.
"To be sure, (the government's complaint) alleges an 'international conspiracy to launder money misappropriated' from 1MDB - but it fails to identify the alleged co-conspirators, or the allegedly criminal acts," states the motion in the case over Beverly Hills property.
"At best, it at various points asserts that '1MDB officials and others misappropriated and fraudulently diverted' money.
“Given that the complaint identifies multiple relevant 1MDB officials, however, this allegation (which is, of course, purely conclusory) provides no guidance."
'Assumption AG is wrong'
Schwartz then questioned which Malaysian public official had done the alleged misappropriation, directed payments and how doing so had constituted wire fraud.
Given these, Schwartz asked the judge to dismiss the government's complaint under the "act of state" doctrine, which stands for US courts not questioning the validity of other sovereigns. He cited the US government not adequately alleging an offence against Malaysia, to back up this demand.
"The government's entire theory of the case presupposes that the Malaysian attorney general's findings (in clearing Prime Minister Najib Najib Razak of any wrongdoing) are factually and legally invalid.
"There is therefore no way for this litigation to proceed without a ruling from this court on whether the Malaysian attorney-general's sovereign functions were illegitimate," said the papers.
According to the report, Schwartz concluded the papers by saying, "According to the complaint, Mr Aziz was not involved in any transaction with 1MDB and was not involved in any conversation or written exchange concerning 1MDB whatsoever.
“Indeed, the face of the complaint offers no basis to infer that Mr Aziz had even heard of 1MDB at the time of these transactions."
Riza, along with Joey McFarland, founded Red Granite, which financed Martin Scorsese's Hollywood blockbuster 'Wolf of Wall Street', 'Dumb and Dumber To' and 'Friends with Kids'.
The DOJ claimed that Red Granite received US$64 million that was traced back to 1MDB.
As part of its civil forfeiture suits last July, the DOJ sought to seize the rights to 'Wolf of Wall Street' as well as other assets traced to funds allegedly embezzled from the controversial state sovereign fund.