US federal prosecutors say the assets are tied to international public corruption and a global conspiracy.
Civil papers have been filed in Los Angeles against One Malayasia Development Berhad, or 1MDB, over so-called "misappropriated funds" and money laundering.
It is the largest single action ever brought under the United States Kleptocracy Asset Recovery initiative.
The US Justice Department alleges the money was stolen from 1MDB and laundered through accounts in the US and at least three other countries - namely Singapore, Switzerland and Luxembourg - over a four-year period.
US Attorney-General Loretta Lynch claims the funds then financed the lavish lifestyles of multiple individuals, including public officials.
"Our complaint alleges that from 2009 through 2015, these officials and their associates conspired to misappropriate and launder billions of dollars from 1MDB. The co-conspirators laundered their stolen funds through a complex web of opaque transactions and fraudulent shell companies with bank accounts in countries around the world, including Switzerland, Singapore and the United States. The funds were then used to purchase a range of assets for the conspirators and their relatives and associates, including high-end real estate in New York and Los Angeles, artworks by Vincent Van Gogh and Claude Monet and a jet aircraft."
Assistant Attorney General of the Criminal Division, Leslie Caldwell, says US companies were involved in the laundering.
"Goldman Sachs and a number of other institutions were involved in various aspects of these transactions, and we're continuing to investigate and we'll go wherever that evidence takes us."
1MDB was set up by Malaysian Prime Minister Najib Razak in 2009.
He was not directly named in the court papers and has consistently denied any wrongdoing, but the documents contain details that appear to directly implicate him.
They include allegations AU$681 million from a 2013 bond sale was transferred to the account of a high-ranking government official, who also held a position of authority with 1MDB.
Mr Najib was previously investigated in Malaysia after revelations the same amount was transferred into his personal bank accounts.
In January, Malaysia's attorney general said the Prime Minister had not committed any crime, and that the money in his account was a political donation from the Saudi royal family.
Najib Razak's stepson, Riza Aziz, was named in the papers as a "relevant individual".
Mr Riza is the founder of Red Granite Pictures, which produced the Oscar-nominated "The Wolf of Wall Street".
Ms Lynch says the lawsuits don't seek to act against any individuals; instead they target property.
"The one-billion dollars in assets that we are discussing today are just a portion of the more than three-billion dollars that was stolen from 1MDB and laundered through American financial institutions in violation of United States law. 1MDB was created by the Malaysian government to promote economic development through international partnerships and foreign direct investment, with the ultimate goal of improving the wellbeing of the Malaysian people. But unfortunately, sadly, tragically, a number of corrupt 1MDB officials treated this public trust as a personal bank account."
As the US faces domestic fears over national security, FBI director Andrew McCabe says the case is extremely significant.
"Some of the profits of these schemes were invested in the United States, and when corrupt officials bring their ill-gotten gains to the United States they also bring with them their corrupt practices and their disregard for the rule of law. And that presents a threat to our economy, it impacts trade and investment, it fuels the growth of criminal enterprises, and undermines our fair democratic processes."
The inquiries have put Prime Minister Najib under political pressure, with critics calling for him to step down.
Mr Najib has sacked people vocal against the scandal in the past within his ruling United Malays National Organisation (UMNO).
A spokesman for the Prime Minister's office said it would "fully cooperate with any lawful investigation of Malaysian companies or citizens".
