U.S. charges financier, former Goldman bankers for 1MDB
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[November 02, 2018]
By Brendan Pierson and A. Ananthalakshmi
NEW YORK/KUALA LUMPUR (Reuters) - U.S.
prosecutors unveiled criminal charges on Thursday against two former
Goldman Sachs bankers and Malaysian financier Low Taek Jho tied to the
alleged theft of billions from Malaysian sovereign wealth fund 1MDB.
Prosecutors in the U.S. Attorney's Office in Brooklyn announced that Tim
Leissner, former partner for Goldman Sachs in Asia, had pleaded guilty
to conspiracy to launder money and conspiracy to violate the Foreign
Corrupt Practices Act, and agreed to forfeit $43.7 million.
Roger Ng, the other charged former Goldman banker, was arrested in
Malaysia at the request of U.S. authorities and is expected to be
extradited, according to John Marzulli, a spokesman for the prosecution.
The third person, the financier popularly known as Jho Low, remains at
large. Malaysian authorities have revoked his passport and issued an
arrest warrant for him, and have also applied for an Interpol red notice
seeking assistance from the United Arab Emirates, Indonesia, India,
Myanmar, China and Hong Kong.
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James Haggerty, a spokesman for Low, said in an e-mailed statement that
Low "maintains his innocence."
"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.
A lawyer for Leissner could not immediately be reached for comment. It
was not immediately clear who is representing Ng.
Goldman has placed its former co-head of Asia investment banking, Andrea
Vella, on leave over his role in the firm's involvement with the case,
pending a review of allegations, according to a person familiar with the
decision.
The government of former Malaysian Prime Minister Najib Razak set up
1Malaysia Development Berhad, or 1MDB, in 2009. An estimated $4.5
billion was misappropriated from 1MDB by high-level officials of the
fund and their associates between 2009 and 2014, the U.S. Justice
Department has alleged.
Najib has consistently denied wrongdoing in connection with alleged
graft involving 1MDB.
According to the indictment against him, Low never held a formal
position with the fund but he worked as an intermediary in numerous 1MDB
transactions involving Goldman and others.
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![](../images/110218pics/2018-11-01T144929Z_3_LYNXNPEEA03A0_RTROPTP_4_MALAYSIA-SCANDAL-JHOLOW_small.JPG)
Men walk past a 1Malaysia Development Berhad (1MDB) billboard at the
fund's flagship Tun Razak Exchange development in Kuala Lumpur March
1, 2015. REUTERS/Olivia Harris/File Photo
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Prosecutors say Low, Ng, and Leissner conspired to launder the proceeds of fraud
involving 1MDB through the U.S. financial system. Some of the laundered funds
were then allegedly used to pay bribes to obtain business for Goldman. Other
funds were used for the personal benefit of defendants, including purchases of
luxury U.S. real estate and art.
Goldman said in an emailed statement that it "continues to cooperate with all
authorities investigating this matter." It has previously denied 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. Leissner, Ng and others received large bonuses in
connection with that revenue.
While U.S. prosecutors have previously filed civil asset forfeiture suits for
assets allegedly bought with some of the stolen funds, these are the first
criminal charges the Justice Department has brought against individuals in the
case under the Foreign Corrupt Practices Act, a federal law targeting official
bribery abroad.
At least six countries, including Malaysia, the United States and Switzerland,
have been investigating alleged thefts from 1MDB.
The 1MDB investigations in the United States and Malaysia have gathered pace
since Najib unexpectedly lost a general election in May to Mahathir Mohamad, who
returned to power 15 years after he retired as prime minister.
Since the election, Malaysian authorities have brought 38 charges against Najib.
Many of the charges – multiple counts of corruption, money laundering and
criminal breach of trust – are linked to 1MDB.
![](http://archives.lincolndailynews.com/2016/Aug/26/images/ads/current/directory_buttons.png)
Najib has pleaded not guilty to all the charges and has consistently denied
wrongdoing.
(Reporting by Brendan Pierson in New York and A. Ananthalakshmi in Kuala Lumpur;
Additional reporting by Aparajita Saxena in Bengaluru; Editing by Anthony Lin
and Nick Zieminski)
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