US accuses Malaysian lender of multi-billion dollar ploy

Eric Tucker and Jim Mustian, Associated Press

Update

3:34 pm EST, Monday, November 5, 2018

WASHINGTON (AP) – The Justice Ministry announced on Thursday a lawsuit against a fugitive Malaysian financier and two former Goldman Sachs bankers accused of involvement in a money laundering and bribery scheme that has stole billions of dollars from a Malaysian investment fund created to stimulate economic development projects in this country.

An indictment to three indictment charges Low Taek Jho, also known as Jho Low, of embezzling money from the public fund and the 39; use to pay bribes to foreign officials in order to pay for luxury real estate, art and jewelry in the United States. and to help finance Hollywood movies, including "The Wolf of Wall Street".

Tim Leissner, a former banker for Goldman Sachs, has also been charged with conspiracy to launder money and conspiracy to violate foreign bribery laws. Another former bank official, Ng Chong Hwa, 51, also known as Roger Ng, was arrested Thursday in Malaysia and accused of circumventing internal accounting controls, prosecutors said.

Leissner's lawyer did not return any messages requesting comment. It was not clear if Ng had a lawyer.

A spokesman for Goldman Sachs, who, according to the indictment, raised about $ 6.5 billion through bond offerings for the fund, said the company " continues to cooperate with all the authorities investigating this case ".

Police in Malaysia said in July that Low had fled Macau to an unknown destination. Prior to facing criminal charges, Low became well known in club scenes in New York and Los Angeles. In 2012, he organized a lavish 31st birthday party attended by Leonardo DiCaprio, Kim Kardashian and other celebrities that the Wall Street Journal called "the craziest party (Las) Vegas ever seen".

Low, who is still on the run, issued a statement through the intermediary of a spokesman who maintained his innocence.

"Mr. Low is simply asking the public to keep an open mind on this case until all the evidence is revealed, which he thinks will justify it," the statement said.

Leissner has admitted to paying millions of dollars in bribes to government officials in Malaysia and Abu Dhabi, according to court records. He was sentenced to lose $ 43.7 million as part of his guilty plea.

This set of charges represents the first criminal prosecution in the United States following the epic corruption scandal in the public investment fund called 1MDB. In 2016, the Department of Justice had recovered more than a billion dollars. He had filed a civil suit to confiscate property, including a penthouse in Manhattan, a Beverly Hills mansion, a luxury jet and paintings by Vincent Van Gogh. Claude Monet.

In a speech last year in Washington, US Attorney General Jeff Sessions called the scandal "kleptocracy at worst". The stolen funds were used for "lavish spending," said the attorney general, including a $ 265 million yacht and a $ 100 million investment in the EMI music label.

"In total, 1MDB officials have laundered more than $ 4.5 billion of funds through a complex network of opaque transactions and fraudulent front companies with bank accounts in countries ranging from Switzerland to Singapore to Luxembourg. and the United States, "said Sessions.

The fund, 1Malaysia Development Berhad, was established in 2009 by then Prime Minister Najib Razak, with the aim of promoting economic development. According to court records, he relied heavily on debt to finance investment and economic development projects and was supervised by senior Malaysian government officials.

Najib chaired his advisory council and, as finance minister, had a veto over his activities. Low, a friend of Najib's son-in-law, Riza Aziz, had no official role at 1MDB, but exercised considerable influence over his transactions and was in frequent contact with Najib, US authorities said.

"As stated in the indictment of today, Mr. Low has not held any official positions at 1MDB, and has never been employed by Goldman. Sachs, neither by the governments of Malaysia nor by Abu Dhabi, "said Low's spokesman.

The scandal has already had significant political ramifications in Malaysia, where Najib fired his attorney general and a deputy prime minister in 2015 for asking for answers on 1MDB. A parliamentary inquiry revealed numerous irregularities but did not have the mandate to prosecute.

Former leader Mahathir Mohamad, scandalized by the scandal, stepped out of his retirement and the opposition united behind him in the national elections, which led to Najib's ouster in may.

Najib and his former head of the Treasury were indicted last week for crimes of confidence involving 6.64 billion ringgits (1.6 billion dollars), accusations that were added to 32 previous heads of corruption, abuse trust and money laundering that Najib is facing as part of the 1MDB scandal.

Najib and Mohamad Irwan Serigar Abdullah, former Secretary General of the Treasury, pleaded not guilty of embezzlement of public funds between December 2016 and December 2017. Police also seized hundreds of luxury handbags, jewelry and cash – d & Worth more than $ 266 million – during apartment searches related to Najib's family.

Shafee Abdullah, a Najib lawyer, called the "latest charges" "stupid".

___

Mustian reported from New York.