U.S. charges financier, former Goldman bankers for 1MDB

AFP pic

AFP pic

The former bankers, Tim Leissner and Roger Ng, were named Thursday by federal prosecutors in Brooklyn, according to The New York Times.

The charges are the first arising from a global scandal over the epic corruption scandal at the state investment fund known as 1MDB.

The 1MDB scandal has roiled politics in Malaysia, leading to criminal charges against former Prime Minister Najib Razak.

Low, said to be a central figure behind the alleged embezzlement of billions of dollars from 1MDB, reached out as recently as last week, Daim Zainuddin told broadcaster Astro Awani.

Goldman provided an array of services to the fund, including helping it sell billions of dollars in bonds to investors, earning about US$600-million in fees for its work.

The money was supposed to support development projects, but prosecutors say the three men "conspired to launder" more than $2.7bn through the United States financial system, and used this money to pay bribes and "for the personal benefit of themselves and their relatives". A lawyer for Leissner was unavailable for comment when NPR phoned. "Low simply asks that the public keep an open mind regarding this case until all of the evidence comes to light, which he believes will vindicate him".

James Haggerty, a spokesman for Low, said in an e-mailed statement that Low "maintains his innocence".

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Ng and Leissner's efforts in the scheme dated to 2009, when they began cultivating a relationship with Low, who allegedly "worked as an intermediary in relation to 1MDB and other foreign government officials" but did not hold a formal position at 1MDB and was never employed by the government.

USA prosecutors allege that Malaysian Low Taek Jho, usually known as Jho Low, was a central figure who orchestrated the ransacking of 1MDB.

Jho Low: Malaysian financier arrested in the US faces charges of laundering billions of dollars embezzled from 1MDB and conspiring to violate the US Foreign Corrupt Practices Act by paying bribes to various Malaysian and Abu Dhabi officials.

Goldman Sachs arranged bond offerings that helped the fund raise over US$6 billion, much of which, according to the global authorities, was squirrelled away in private accounts and used to buy yachts, paintings and high-end real estate.

Goldman Sachs, which said it is cooperating in the probe, wasn't named in the DOJ criminal documents, but was referred to as "financial institution #1". Both deny any wrongdoing. After the bond transaction was executed, more than US$500 million of the bond proceeds were misappropriated into shell companies controlled by Low, Leissner, Ng and other co-conspirators, the government alleged.

Roughly $681m of that money is alleged to have ended up in the private bank accounts of Najib, who is facing 38 charges of corruption in an ongoing investigation into the 1MDB scandal.

Najib and Mohamad Irwan Serigar Abdullah, the former treasury secretary-general, pleaded not guilty to misappropriating government funds between December 2016 and December 2017. He has called the Malaysian charges political.

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