US officials unveiled criminal indictments today against a Malaysian financier and two former Goldman Sachs bankers over a conspiracy to launder billions of dollars embezzled from 1Malaysia Development Bhd (1MDB), and for paying bribes to various Malaysian and Abu Dhabi officials. 

Ex-Goldman Sachs banker, Tim Leissner, pleaded guilty and agreed to pay US$43.7 (RM182 million) million in restitution of ill-gotten gains. 

The US Justice Department arrested former Goldman Sachs banker Ng Chong Hwa in Malaysia today, while the Malaysian Low Taek Jho, whose close relationships with high-ranking government officials in Malaysia, including “Malaysian Official 1”, and Abu Dhabi were central to the scheme, remains at large, officials said in a press release.

Malaysian authorities have issued an arrest warrant for Low, or Jho Low as he is popularly known, and have also applied for an Interpol red notice seeking assistance from the United Arab Emirates, Indonesia, India, Myanmar, China and Hong Kong. Low, whose Malaysian passport has been revoked, has previously denied any wrongdoing.

According to allegations in court filings, beginning in approximately 2009 and continuing through 2014, Low, Ng, Leissner and the other co-conspirators used Low’s relationships to obtain and retain business for the Goldman Sach through the promise and payment of hundreds of millions of dollars in bribes, including to ensure 1MDB awarded the financial institution a role in three bond transactions known internally at the financial Institution as “Project Magnolia,” “Project Maximus” and “Project Catalyse.” 

The 1MDB scandal has roiled politics in Malaysia, leading to criminal charges against former prime minister Najib Razak, the “Malaysian Official 1” mentioned in the DoJ’s court filings. Today’s indictments and guilty plea constitute the first US indictments in the far-flung case.

The men were charged with conspiring to launder billions of dollars from 1MDB, a strategic development fund set up for the benefit of the development of the country, and conspiring to bribe officials in Malaysia and Abu Dhabi, violating the Foreign Corrupt Practices Act. 

Ng was also charged with conspiring to violate the internal controls at Goldman Sachs, which underwrote more than US$6 billion in bonds issued by 1MDB, the government said.

Under the 2012 “Project Magnolia” bond offering by 1MDB, Low allegedly told the ex-Goldman bankers they needed to bribe officials in Malaysia and Abu Dhabi to guarantee that the transaction went through.

Hundreds of millions of dollars in bribes were subsequently paid to officials in Malaysia and Abu Dhabi. 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 said.

Some of the funds went to finance the movie, “The Wolf of Wall Street,” a 2013 Oscar-nominated film starring Leonardo diCaprio about Jordan Belfort, a corrupt stockbroker who was sent to prison for fraud, the government said. – AFP, November 1, 2018.