“This was the best site in New York City and maybe the world,” Mr. Witkoff said in an interview. “We designed what the entire partnership thought was a beautiful building. Little did we know we’d face circumstances like this.”
Mr. Witkoff was reluctant to go into detail about his dealings with Mr. Low, given the investigations and associated litigation.
The story of the Park Lane offers a window into high-stakes development in Manhattan, where over the past decade a gusher of foreign capital, much of it difficult to trace to its original sources, has chased some of the most desirable real estate on earth.
The once-ubiquitous Mr. Low has disappeared, possibly holed up in a hotel in Shanghai. He sits at the center of what the authorities are calling one of the biggest international money-laundering schemes ever.
According to the Justice Department, which initiated a civil forfeiture action last year, Mr. Low, who had close ties to Malaysia’s prime minister, Najib Razak, and his associates conspired to illegally divert more than $3.5 billion from a Malaysian development fund to acquire the Park Lane, a luxury hotel in Beverly Hills, condominiums in New York and expensive works of art; they also helped finance the Martin Scorsese movie “The Wolf of Wall Street,” which starred Mr. DiCaprio.
Mr. Low has denied any wrongdoing, as has Mr. Najib and the development fund. The federal complaint contends that $731 million from the fund, which was known as 1MDB, was deposited into accounts belonging to an official identified as “Malaysian Official 1,” who is widely believed to be Mr. Najib.
The case has all the intrigue of a Robert Ludlum novel, with billions of dollars rocketing between bank accounts and shell companies in multiple countries. Authorities have shut down two Swiss banks and jailed several bankers. Investigations are underway in the United States, Switzerland, Malaysia and at least three other countries.
The Park Lane, built in 1971 by Harry Helmsley, was architecturally uninspiring, but offered wide-angle views of Central Park. Mr. Helmsley and his wife, Leona, made their home at the top, in a three-story triplex that featured a 22-foot-long swimming pool.
In 2013, as the Park Lane, one of the last remaining properties in the Helmsley estate, was put up for sale, Mr. Low was looking for a large real estate deal.
Developers at the time were turning 57th Street into a billionaires’ row, with a half-dozen skyscrapers, each boasting $100 million penthouses, under construction.
The Park Lane looked like an unparalleled opportunity.
Both Mr. Witkoff and Harry Macklowe, a longtime developer who was already building a billionaires’ tower at 432 Park Avenue, lobbed unsolicited offers before the bidding even started.
Finding financing for what promised to be a heated auction was no problem — there was so much pension and foreign money available for deals in New York. Mr. Macklowe had money from Abu Dhabi behind his bid.
A lawyer introduced Mr. Witkoff to Mr. Low.
The Malaysian financier had attended the Harrow School in London and the Wharton School of the University of Pennsylvania. He was close to Riza Aziz, a film producer and the stepson of Mr. Najib.
In 2009, Mr. Najib established 1Malaysia Development Berhad, or 1MDB, to spur economic development. Mr. Low emerged as an adviser and a key figure in the fund’s global deal making. The fraud and money laundering at 1MDB started almost immediately, according to the federal complaint.
Mr. Low befriended celebrities, spent millions at Las Vegas casinos, gave charitable gifts worth tens of millions of dollars and went on a real estate shopping spree with money the Justice Department says was illegally diverted from 1MDB.
He also bought a substantial stake in EMI Music in 2012, along with partners from Blackstone, the investment group, and the Mubadala Development Company, a sovereign investment fund based in Abu Dhabi.
Mr. Low also had a tight relationship with Goldman Sachs, which earned hundreds of millions in fees from bond offerings it handled for 1MDB. According to the Justice Department forfeiture complaint, “$1.4 billion was misappropriated and fraudulently diverted to bank accounts in Switzerland and Singapore” controlled by Mr. Low from the bond offerings.
With land prices soaring in New York, some developers take only a fractional equity interest in their projects and raise the additional money from lenders, pension funds and sovereign wealth funds.
That is what Mr. Witkoff did, and in July 2013, he won the auction of the Park Lane and signed a contract for $654 million. Mr. Witkoff and his partners — New Valley L.L.C., Highgate Holdings and eventually, Mr. Macklowe — had 15 percent of the deal. At the last minute, Mr. Low took a 55 percent stake and brought in Mubadala for the remaining 30 percent.
Just before the closing in November, an executive in Mr. Witkoff’s office sent an email to Mr. Low asking “where the money on your side of the deal is coming from.”
According to the complaint, Mr. Low responded: “Low family capital,” and “Just all the family.” The Justice Department says the money came from 1MDB.
At the closing, $202.2 million of Mr. Low’s contribution came from client escrow accounts from one of his law firms, DLA Piper.
The group hired the Swiss architects Herzog & de Meuron to design an undulating glass tower that would rise 855 feet, using air rights acquired from adjoining properties. The tower was set atop 140-foot-tall legs so the first floor would be above the tree line and every apartment would have an unimpeded view of the park. The developers figured the condominiums would command more than $8,000 a square foot.
Mr. Low’s contribution to the design was simple: Put outdoor swimming pools on the exterior galleries of each of the five penthouses, according to executives involved in the deal who requested anonymity because of the litigation.
“He didn’t ‘like it,’” Mr. Witkoff said of Mr. Low. “He loved it.”
In late 2015, the Park Lane owners were preparing to refinance the debt used to buy the property. Once again, according to the complaint, Mr. Low told his partners and the lender that his money came from family trusts established by his father.
But JP Morgan Chase, the new lender in the deal, could not find out much about the Low family before 2009, according to the executives who were briefed on the deal, and raised questions. While law firms are not required to do due diligence on clients, banks are.
In addition, critical stories started to appear in Malaysia about Prime Minister Najib, his relationship with Mr. Low and 1MDB. Then subpoenas arrived from the Justice Department.
Mr. Low told his partners that the claims of alleged wrongdoing were baseless, the work of rival political parties in Malaysia.
The Justice Department inquiry had been prompted in part by an investigative report published in 2015 in The New York Times, exploring the use of shell companies to purchase real estate in the United States.
In July 2016, Mr. Low failed to make a loan payment on the Park Lane mortgage. At the same time, the Justice Department filed its civil complaint seeking to recover more than $1 billion in assets.
The case represents “the tip of the iceberg” when it comes to corruption and money laundering, said Heather Lowe of Global Financial Integrity, a Washington-based nonprofit that focuses on illicit financing.
“There is so much money moving around the world every day,” she said. “There is a need to focus on funds going into banks and high-value real estate and how that may be facilitating corruption and poverty around the world.”
Under a cooperation agreement between Mr. Witkoff and the Justice Department, the hotel is to be sold and the proceeds divided between Mubadala and Mr. Witkoff’s group. The government will take Mr. Low’s share. The sale is being handled by Eastdil Secured, a real estate services company.
The marketing books are expected to arrive this week. The pitch: The Park Lane is “the world’s best development site.”
The sellers hope the bids will exceed $1 billion.
An earlier version of this article misstated the location of the Mubadala Development Company headquarters. The company is based in Abu Dhabi, not Dubai.