The settlement is about half what the U.S. originally sought in a case that was originally billed as a centerpiece of the Obama administration's Kleptocracy Asset Recovery Initiative. The U.S. promises under the agreement, which includes no admission of wrongdoing, to use the proceeds to benefit the people of Equatorial Guinea. The settlement was revealed in filings with a U.S. District Court in Los Angeles.  Equatorial Guinea is rich in oil reserves, but most of its population lives in severe poverty. CNBC profiled the Obiang family in the 2012 Investigations Inc. documentary, "Filthy Rich."  "This settlement forces Nguema Obiang to relinquish assets worth an estimated $30 million, and prevents Nguema Obiang from hiding other stolen money in the United States, fulfilling the goals of our Kleptocracy Asset Recovery Initiative: to deny safe haven to the proceeds of large-scale foreign official corruption and recover those funds for the people harmed by the abuse of office," said Assistant Attorney General Leslie Caldwell in a statement.  Attorneys for Teodorin couldn't not be immediately reached for comment.  Read More China takes anti-corruption drive overseas  The Justice Department went to court in 2011 to seize more than $70 million in property from Teodorin, whose government salary was less than $100,000 a year. At the time, officials called the case a "loud and clear" message that international corruption—with the proceeds laundered through the U.S. financial system—would no longer be tolerated.  "The United States will not be a hiding place for the ill-gotten riches of the world's corrupt leaders," then-Assistant Attorney General Lanny Breuer said in a statement, when the lawsuit was filed.  Teodorin, now 45, seemed like a poster boy for the initiative. An international playboy—he used to date the rapper Eve, among many others—Teodorin lived at the luxurious Beverly Wilshire Hotel while a student at Pepperdine University in Malibu in the 1990s. A U.S. oil company that did business in Equatorial Guinea, Walter Oil & Gas, allegedly picked up his living expenses.  At his mansion high atop the Malibu cliffs on Sweetwater Mesa Road, staff members said they were required to be at Teodorin's beck and call 24 hours a day, even though most days he did not wake up until late afternoon. Several filed complaints about labor law violations, which he invariably contested.  In addition to the Malibu mansion, which he purchased in 2006, and the Michael Jackson memorabilia bought four years later, Teodorin's prized possessions included a Gulfstream G-V jet and a fleet of luxury automobiles. He also had homes in Paris, and Cape Town, South Africa. U.S. officials estimated his fortune to be worth around $300 million.  Read MoreAmid HK protests, crime doesn't pay  "We allege that he got that through bribes, through corruption, through criminality," Breuer told CNBC in 2012.  Teodorin's father, President Obiang, had not only installed his eldest son as minister of forestry; he also granted him a massive timber concession, giving Teodorin control over Equatorial Guinea's second most important resource, after oil. The position also gave Teodorin control over the nation's infrastructure—convenient, since he also owned the nation's largest construction businesses.  The Justice Department alleged Teodorin demanded "taxes" or "fees"—which the U.S. claimed were nothing more than bribes—from other companies seeking to harvest timber in Equatorial Guinea.  The lawsuit says a pair of California attorneys, Michael Berger and George Nagler, helped Teodorin launder the funds through a web of shell companies to purchase the U.S. property. Berger and Nagler, whose activities were described at length in the Justice Department complaint, have not been personally accused of wrongdoing.
The vice president of Equatorial Guinea—who was facing accusations of using the U.S. financial system to launder money—has agreed to a settlement with the U.S.