Goldman Sachs Bankers Charged In Malaysian Financial Scandal

Larry Hoffman
November 2, 2018

The set of charges represent the first criminal prosecutions in the US arising from the epic corruption scandal at the state investment fund known as 1MDB. The authorities have examined what role, if any, the firm played in the 1MDB fraud, whether it knew about the alleged fraud and whether it should have done more to uncover the misappropriation of funds.

Goldman Sachs underwrote about US$6.5 billion in bonds issued by 1Malaysia Development Berhad, a sovereign wealth fund set up to help develop the country, according to the U.S. government.

"Mr. 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", Haggerty said. Police in Malaysia said in July that Low had fled Macau to an unknown destination.

News reports say Ng has been arrested in Malaysia.

James Haggerty, a spokesman for Low, said in an e-mailed statement that Low "maintains his innocence". Between 2009 and 2014, top executives and associates of Najib looted $4.5 billion from the fund, laundering it through the U.S., Singapore, Switzerland and other countries, according to the U.S. Justice Department. Prosecutor say the money was to pay for jewelry for the official's wife.

Charges under the Anti-Money Laundering and Anti-Terrorism Financing Act have also been filed against Jho Low and his father Tan Sri Larry Low at the Sessions Court in Putrajaya last August, relating to the movement of several hundred million U.S. dollars in the BSI Bank in Singapore.

Lawyers for Leissner and Low could not immediately be reached for comment. He denies any wrongdoing.

According to prosecutors, the investment bank generated about $600 million in fees for its work with 1MDB, which included three bond offerings in 2012 and 2013 that raised $6.5 billion. It was not clear if Ng had a lawyer. Leissner, Ng and others received large bonuses in connection with that revenue.

While the Justice Department has been investigating the 1MDB scandal for some time and has pursued civil lawsuits, these are the first criminal charges the department has brought against individuals related to the 1MDB scandal, according to the Wall Street Journal, which brought worldwide attention to the scandal itself in 2015.

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.

In June, anti-corruption investigators questioned Najib's wife about alleged theft and money-laundering. Working with the FBI, Indonesian authorities seized Low's $250 million luxury yacht Equanimity off Bali in February and Malaysia's government is now auctioning it.

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