US accusations widen the net, deepen the plot of a scam at 1MDB

On November 1, the United States Department of Justice announced that it had filed criminal charges against three suspects in the 1Malaysia Development Berhad (1MDB) fraud case, considered by observers among the most important financial scams of modern history.

Among the three defendants are Malaysian fugitive financier Low Taek Jho, former Goldman Sachs banker Ng Chong Hwa, and former managing director of the same investment bank, Tim Leissner, who led the company's operations. financial institution in Southeast Asia.

A three indictment indictment was opened against Low and Ng in the New York District District Court for conspiring to launder about $ 6 billion diverted from 1MDB and violating the Foreign Corrupt Practices Act. paying bribes to Malaysian and Emirati officials.

Leissner had already pleaded guilty last August following a separate two-count indictment filed in June for similar charges, according to news reports. As the trial unfolds, many other suspects and potential institutions involved, but not yet identified, in the scam could soon emerge in court testimony.

The DOJ's indictment investigation involved dozens of individuals, institutions and legal persons in Malaysia, Singapore, Hong Kong, Seychelles, France, Switzerland, Luxembourg, in the United Kingdom, the United Arab Emirates and the United States.

The three named defendants are the first to face criminal charges filed by the DoJ for their roles as architects, facilitators and organizers of the multibillion dollar scam. According to some information, Low, also known as Jho Low, would be in China.

Several Malaysian government officials, including former Prime Minister Najib Razak, reportedly collaborated with two executives of the United Arab Emirates' state-owned company, the International Petroleum Investment Company (IPAC), to hijack until the end of the war. to 6 billion USD of 1MDB.

According to preliminary information received in 2015, Najib received $ 618 million from the fund in his personal bank accounts. He has always denied any wrongdoing, saying that at the time the money was a gift from a Saudi prince and that the new Malaysian government investigations involving him in a fraud were politicized.

The scandal angered many Malaysian voters who surprised the May elections and elected Najib's rival, former Prime Minister Mahathir Mohamad, to end the decades-long rule of the United Nations. United of Malaysia. Mahathir promised on the bastions to do justice to the swindle and recover the stolen funds.

In July 2016 and June 2017, the DoJ filed a civil forfeiture suit against Najib, named "Malaysian Official No.1", as well as more than a dozen people and entities who were primarily concerned with freezing and seizing assets and accounts attributed to stolen property. 1MDB funds.

However, in September 2017, the Ministry of Justice suspended these investigations, fearing that they would undermine its ongoing criminal investigation, whose first targets were revealed in the November 1 indictment.

Recent reports suggest that Low would have tried to make contact with the chairman of the Council of Eminent Persons, appointed by Mahathir, the former Finance Minister Daim Zainuddin. According to Daim, Low asked Mahathir to talk with him to negotiate his possible immunity in exchange for information on the ongoing investigations into the losses suffered by Malaysia.

Before being accused of embezzling $ 1.7 billion from 1MDB, Low, 37, made his name as a global playboy, playing with stars like Paris Hilton, Miranda Kerr, Elva Hsiao and Leonardo DiCaprio.

Low has been at liberty since 2016, after Singapore asked Interpol to issue an international arrest warrant, called a red notification, on the basis of evidence that 1MDB stolen funds allegedly linked to Low had passed through its jurisdiction.

In 2017, as authorities approached him, Low escaped with his super-yacht, bought with $ 250 million of stolen funds from 1MDB and known as Equanimity. He reportedly stopped over several Indonesian islands before the authorities joined him in Bali.

On February 8, the Indonesian authorities seized the yacht and handed it over to the Malaysian authorities, who then auctioned it earlier this month. Low, however, escaped his arrest and apparently was able to find a safe haven in China. Witnesses and reports have recently seen in Macau and Hong Kong.

In mid-August, The Wall Street Journal reported that Low had managed to stay ahead of what was supposed to be pursuing Chinese police and had bragged links with his associates cited in his article on receiving protection from the Chinese intelligence services. Asia Times could not independently corroborate the report's claims.

Some have speculated that China is protecting Low as a reciprocal affront after Mahathir has decided to cancel $ 22 billion worth of Chinese infrastructure contracts initiated by Najib. The projects, including a rail project on the east coast of Peninsular Malaysia, are of considerable strategic importance to China.

Designed to bypass the Straits of Malacca, the east coast rail link project would have connected the South China Sea to China's strategic shipping routes on the west coast of Malaysia. The other major canceled project was a China-backed gas pipeline in Sabah, a Malaysian state located on the island of Borneo.

The DoJ's criminal complaint states that Low, Ng and Leissner all played a key role in connecting and building relationships with others allegedly involved in massive financial frauds.

According to the DoJ's complaint, Low organized meetings with officials of Foreign Agency A (IPAC according to Malaysian sources assisting the DoJ) and "Foreign Investment Firm A" (Aabar Investments PJS according to Malaysian sources assisting the DoJ) .

Some of these officials, among others, "would be paid bribes by Low, or on his instructions, to influence the approval of the guarantee," says the DoJ's complaint.

The complaint also states that "In connection with this project, Low, Ng, Plotman No. 1 (Leissner) and others used Low's close personal relationships with government officials in Abu Dhabi and Malaysia, including including Low's relationship with the Malaysian manager (Najib), to obtain and maintain 1MDB's business for US financial institution No. 1 (Goldman Sachs) through the promise and payment of bribes to these officials. "

According to the complaint, "at the same time, in order to win and retain the bond agreement to finance the purchase of Malaysian Energy Company A (we do not know which company), the defendant Low also sought the help from various 1MDB officials by promising compensation. "

The indictment highlights Low's alleged work to ensure that Najib, who chaired 1MDB as founder and chairman, allows the funds to be transferred to foreign accounts and not to investment projects that are underwritten. underlying.

The DoJ claims that it is Low who has courted – and allegedly corrupted – key leaders of IPIC, namely Khadem al-Qubaisi and Mohamed Badawy Al Husseiny. Because IPIC has agreed to entrust the security of the bonds, Qubaisi and Husseiny have repeatedly approved "investments" that they allegedly would be embezzlement, according to the DoJ's complaint.

Qubaisi and Husseiny have not been seen or heard since their detention in the UAE shortly after the DoJ filed its confiscation complaint in July 2016. So it is still unclear whether they maintain their innocence or whether their guilt is recognized.

Ng would have played a similar role in deceiving his employer, Goldman Sachs, by asking him to conceal fraudulent transactions.

According to the complaint: "To obtain the markets, the defendant Ng also conspired with other employees and agents of the US financial institution No. 1 (Goldman Sachs), including the co-conspirator No. 1 (Leissner), to knowingly and willfully bypass the internal accounting controls of US Financial Institution No. 1 in relation to the three 1MDB bond transactions and other 1MDB transactions. "

In that regard, Ng allegedly circumvented Goldman's internal compliance standards, including investigators from the bank's legal department to review transactions such as the agreement on 1MDB's obligations and the DoJ's complaints.

Backed by UAE oil dollars, the alleged credibility of the Malaysian government and the prestige of Goldman Sachs, Leissner then chaired a discount sale of 1MDB bonds to investors, moved by the narrative of how their money would go to the good cause of the development of Malaysia's poor state of Sarawak.

Dubbed in the DoJ's "co-conspirator # 1" complaint, Leissner also worked with Ng and Low to "whitewash 1MDB misappropriated funds, some of which were used to bribe government officials in Malaysia. and in Abu Dhabi, through financial systems in the United States and elsewhere, "says the DoJ complaint.

The scope and scope of the DoJ's arson investigation was informed by its statement recognizing the cooperation of dozens of investigative agencies in the United States and around the world.

The list included the US Securities and Exchange Commission, the Board of Governors of the Federal Reserve Bank of the New York Federal Reserve, the Office of the Attorney General and the Federal Office of Justice of Switzerland, as well as the judicial investigation authority of the Grand Duchy of Luxembourg, among others.

The alleged guilt of prominent personalities like Low and Najib has already been established in the media since the new scam was revealed in 2015. That was not the case for Ng, Leissner and Goldman Sachs, which suggests that the DoJ could have other assets. in his sleeve as the trial unfolds.

At the same time, the DoJ's decision not to prosecute Qubaisi and Husseiny, the US citizen, made their relatives eyebrow because they were clearly involved in the complaint of corruption and possession of stolen funds. These charges were also laid in the first round of civil cases.

The DoJ's decision to emphasize instead the alleged roles of Low, Ng and Leissner as key architects of the fraud and to describe Husseiny and Qubaisi as mere targets of corruption could undermine the efforts of the Attorney General of Malaysia, Tommy Thomas, to recover funds through a pending petition to the London Court. d & # 39; arbitration.

Malaysia's recent decision to challenge a May 2017 "consent agreement" requiring both countries to repay US $ 5.78 billion is based on establishing the existence of a high-level conspiracy. aiming to divert 1MDB from IPIC beyond Qubaisi and Husseiny.

The designation of names by the DoJ's complaint could therefore only be the beginning of those who would eventually be involved and potentially prosecuted for a multi-billion dollar fraud.

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