Former Goldman Sachs bankers and Jho Low charged in Malaysian financial scandal

02 November, 2018, 14:59 | Author: Bert Pena
  • Jho Low contacted Mahathir's adviser last week to seek immunity: Report

The US justice department has charged two former Goldman Sachs bankers and the Malaysian financier Jho Low with conspiring to launder billions of dollars embezzled from Malaysia's state development fund.

Low, the alleged mastermind of the fraud, and ex-Goldman banker Roger Ng were charged with conspiring to launder billions of dollars in stolen funds, and conspiring to violate the Foreign Corrupt Practices Act by allegedly bribing officials in Malaysia and Abu Dhabi.

Yesterday, Reuters reported a three-count criminal indictment was unsealed in federal court in the Eastern District of NY charging Low Taek Jho, also known as "Jho Low," and Roger Ng with conspiring to launder billions of dollars embezzled from 1MDB funds and for conspiring to violate the Foreign Corrupt Practices Act (FCPA) by paying bribes to various Malaysian and Abu Dhabi officials.

The filing of criminal charges in the matter was a rare move against senior executives of a major USA bank in the decade since the financial crisis.

Goldman acted as the primary bond underwriter for the fund. The banker, Andrea Vella, was put on leave in October, according to a person familiar with the matter.

About $4bn disappeared from the fund and the claims of corruption led to Malaysia's former prime minister, Najib Razak, being charged with corruption, charges he has denied. 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. Some of the laundered funds were then allegedly used to pay bribes to obtain business for Goldman.

News reports say Ng has been arrested in Malaysia.

Mr Low has previously denied charges filed in Malaysia, adding that it would be "impossible" for him to receive a fair trial there. Federal prosecutors in Los Angeles have filed multiple civil lawsuits to recoup assets bought with some of that money.

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Some of those allegations were described in civil forfeiture complaints filed by federal prosecutors in Los Angeles past year. Najib accuses the new administration of seeking political vengeance and has vowed to clear his name.

The Malaysian government is now seeking restitution from Goldman.

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. The new Prime Minister, Mahathir Mohamad, has moved quickly to investigate the alleged theft of billions of dollars from the investment fund, which was created under Mr. Najib.

Goldman has repeatedly played down its role in the scandal, saying it was unaware of how money from the fund was being used.

A spokesman for Low did not immediately respond to a request for comments.

The BBC has contacted Goldman Sachs for comment. A representative for Mr.

Ng was formerly managing director at 1MDB. Both Leissner and Ng departed the bank over 12 months ago.

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