In this file photo, Riza Aziz, producer of the Hollywood film "The Wolf of Wall Street and stepson of Malaysia's disgraced ex-leader Najib Razak, arrives for a court appearance at Duta court in Kuala Lumpur on July 5, 2019. (MOHD RASFAN / AFP)

KUALA LUMPUR - Prosecutors dropped money-laundering charges against Riza Aziz - a Hollywood producer and the stepson of Malaysia’s former prime minister Najib Razak on Thursday after a deal that officials said included the recovery of US$107.3 million of overseas assets.

Riza Aziz, the co-founder of Red Granite Productions that was behind the 2013 Oscar-nominated film, was charged with five counts of money laundering last year over allegations that he had received US$248.2 million misappropriated from state fund 1Malaysia Development Berhad (1MDB)

Riza, the co-founder of Red Granite Pictures that produced the hit movie “The Wolf of Wall Street”, was charged with five counts of money laundering last year over allegations that he had received US$248 million misappropriated from state fund 1Malaysia Development Berhad (1MDB).

US and Malaysian authorities say about US$4.5 billion was looted from 1MDB, co-founded in 2009 by then-premier Najib.

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A sessions court judge ruled on Thursday that the charges against Riza would be withdrawn after state prosecutors said they had reached a deal with the accused.

Riza’s lawyer Hariharan Tara Singh confirmed a deal had been reached and said his client was “pleased to make good on his obligations to the authorities and looks forward to beginning the next chapter of his life.”

The government is expected to recover overseas assets estimated to be worth US$107.3 million as part of the agreement, the Malaysian Anti-Corruption Commission said in a statement.

“Based on the agreement, the accused is required to pay a compound to the government... which is punitive as an alternative to the charges that have been brought against him,” the commission said.

The court said the dropping of charges did not amount to an acquittal. Steps would be taken to ensure a full acquittal upon completion of the deal, failing which charges could be reinstated, lead prosecutor Gopal Sri Ram said during the hearing.

The US Department of Justice has said Red Granite financed three films, including “The Wolf of Wall Street”, using funds they suspect were stolen from 1MDB.

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Red Granite paid the US government US$60 million in September 2017 to settle a civil forfeiture claim over the rights to the films.

The United States has returned or assisted Malaysia with recovering around US$600 million from the sale of assets allegedly bought with stolen 1MDB funds.

Since losing an election to Mahathir Mohamad in 2019, Najib has been slapped with 42 criminal charges tied to losses at now-defunct 1MDB and other state entities. He has pleaded not guilty and has consistently denied wrongdoing.

Najib told Reuters in March, days after Mahathir unexpectedly resigned amid political turmoil, that he now expected an atmosphere more conducive to a fair hearing.

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Since then, the country saw Najib’s party come back into power, leading to concerns over the ongoing investigations and legal proceedings related to 1MDB.

Current Prime Minister Muhyiddin Yassin has pledged to keep fighting corruption and working with jurisdictions across the world to bring back funds linked to the state fund.

The case has also led to scrutiny of Goldman Sachs, which Malaysia has accused of misleading investors over bond sales totalling US$6.5 billion that the bank helped raise for 1MDB. Three units of the bank have pleaded not guilty.

With Bloomberg inputs