November 2, 2018
The US Justice Department’s first charges against individuals related to the pillaging of the Malaysia investment fund known as 1MDB offers several new insights into the global, multibillion-dollar scandal.
Former Goldman Sachs banker Roger Ng has been arrested in Malaysia while his former colleague Tim Leissner pleaded guilty in New York over financial transactions related to 1Malaysia Development Bhd (1MDB).
The United State’s Department of Justice (DoJ) has charged Leissner alongside fugitive financier Low Taek Jho, also known as Jho Low (pic), over funds misappropriated from 1MDB and paying bribes to various Malaysian and Abu Dhabi officials.
The three-count indictment charges Low with misappropriating money from 1MDB and using it for bribes and kickbacks to foreign officials, to pay for luxury real estate, art and jewellery in the US and to fund Hollywood movies, including The Wolf of Wall Street.
Leissner pleaded guilty to conspiring to launder money and to violating anti-bribery laws. He has been ordered to forfeit $43.7mil (RM182.27mil) as a result of his crimes.
The charges relating to 1MDB are the first by DOJ.
In 2016, the DOJ had reportedly recovered over US$1bil (RM4.17bil – current conversion rate) that was allegedly stolen and sought the forfeiture of property including a Bombardier private jet, a Manhattan penthouse, a Beverly Hills mansion and paintings by Vincent Van Gogh and Claude Monet.
This is the second time Low is being charged over 1MDB.
Malaysian police filed the first set of criminal charges on Aug 24 against Low and his father Tan Sri Larry Low Hock Peng over money allegedly stolen 1MDB.
The charges for money laundering were brought against the father and son “in absentia” by the Commercial Crime Investigation Department (CCID) and the Attorney General’s Chambers. Warrants of arrest for both men were also sought.
1MDB was set up in 2009 by then-prime minister Datuk Seri Najib Tun Razak to promote economic development. Najib chaired its advisory board and as finance minister held veto power over its activities.
A friend of Najib’s stepson Riza Aziz, Low, had no official role at 1MDB but had considerable influence over its dealings and was often in contact with Najib, according to the DoJ.
The scandal has already had major political ramifications in Malaysia, where Najib in 2015 sacked his attorney general Tan Sri Abdul Gani Patail and former deputy prime minister Tan Sri Muhyid-din Yasin for demanding answers about 1MDB. A parliamentary inquiry found many irregularities but had no mandate to prosecute.
Current Prime Minister Tun Dr Mahathir Mohamad, outraged over the scandal, then came out of retirement and the opposition united behind him in the national elections, leading to Najib’s ouster in May.
In June, anti-corruption investigators also questioned Najib’s wife about alleged theft and money-laundering.