Former Goldmans Bankers Charged Over 1MDB Corruption Saga

Tom Burroughes

2 November 2018

US prosecutors have announced that they have brought criminal charges against two former Goldman Sachs bankers and Malaysian financier Low Taek Jho stemming from the alleged theft of billions from Malaysian sovereign wealth fund 1MDB, media reports said.

Separately, media reports said that a US court has approved the sale of an impounded jet which was allegedly acquired with stolen 1MDB cash.

Prosecutors in the US Attorney’s Office in Brooklyn said 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 and is expected to be extradited, according to John Marzulli, a spokesman for the prosecution, Reuters said.

The third person, the financier widely 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. Reuters quoted a spokesperson for Low saying that he “maintains his innocence”.

The long-running saga of 1MDB, a state-created government fund in Malaysia that was allegedly used as a slush fund by politicians and others, is the largest corruption scandal in Malaysian history. The flows of money connected to the fund have prompted investigations and action by authorities in Singapore, Switzerland and the US. The affair has even bizarrely mixed fiction with fact. The company that produced the blockbuster film The Wolf of Wall Street, and was co-founded by the stepson of Malaysia's former Prime Minister, Najib Razak, a few weeks ago settled a lawsuit filed by the US government to seize assets allegedly acquired with money siphoned from 1MDB. In that case, US prosecutors had alleged that Martin Scorsese's 2013 film was financed by Red Granite Pictures using funds stolen from the fund.

Reuters said a lawyer for Leissner could not immediately be reached for comment. It was not immediately clear who is representing Ng, it added.

Goldman Sachs has put 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, Reuters quoted unnamed sources as saying. Goldman Sachs has also recently reshuffled its Asian leadership.

Aircraft
Reports said that the court decision to approve the sale of an aircraft linked to the 1MDB case was made in an agreement between the US Department of Justice and the claimant Global One Aviation. The jet had been seized by Singaporean authorities last year.

According to a media statement issued by a consultancy firm claiming to represent Global One Aviation, the parties have agreed that the proceeds of the sale will be held in escrow in the US until the legal rights of the various parties can be determined through proper judicial proceedings