Goldman Sachs former investment bankers charged in $4B Malaysian funding scheme

03 November, 2018, 04:15 | Author: Clarence Schmidt
  • AFP pic

Two former Goldman Sachs bankers and Malaysian financier Jho Low have been hit with U.S. criminal charges in connection with one of the world's biggest financial scandals.

The former bankers, Tim Leissner and Roger Ng, were named Thursday by federal prosecutors in Brooklyn, according to The New York Times. Low, who was also indicted, remains at large.

Mr Leissner, who served as Goldman's South East Asia chairman and a participating managing director, has pleaded guilty to conspiring to launder money and violate USA anti-bribery laws. Mr. Ng faces similar charges. While US 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.

Goldman Sachs underwrote about US$6.5 billion in bonds issued by 1Malaysia Development Berhad, a sovereign wealth fund set up to help develop the country, according to the United States government.

The charges could also have wider repercussions within the bank. He has been ordered to forfeit US$43.7 million.

The authorities contend that the bribes and kickbacks were paid to secure 1MDB's bond underwriting business for the bank.

The unidentified co-conspirator is Andrea Vella, according to two people familiar with the matter who spoke on the condition of anonymity because they were not authorized to speak publicly.

The Department of Justice alleges the men participated in a scheme that stole billions of dollars from Malaysia's development fund, 1MDB.

Until recently, the investigation had mainly focused on allegations that Mr.


Low, the alleged mastermind of a scheme to siphon billions of dollars from the fund, was charged in absentia.

Former Malaysian Prime Minister Najib Razak, center, walks out of courtroom at Kuala Lumpur High Court in Kuala Lumpur, Malaysia, Thursday, Oct. 4, 2018.

Some of those allegations were described in civil forfeiture complaints filed by federal prosecutors in Los Angeles previous year. The U.S. says the money it is seeking to recover was gambled in Las Vegas, used to buy hotels, apartments, a luxury yacht, a jet, diamond jewelry and art works and to finance Hollywood films including the "Wolf of Wall Street" and "Dumb and Dumber To". The corruption scandal involving the fund had already upended Malaysian politics.

In June, anti-corruption investigators questioned Najib's wife about alleged theft and money-laundering.

The Malaysian government is now seeking restitution from Goldman.

Low allegedly played a central role in plundering 1MDB.

A spokesman for Low did not immediately respond to a request for comments. A representative for Mr. It has seized 240 million Singapore dollars ($180 million) of property and cash and says about half of that belonged to Low and his immediate family. Such payments were "known to Ng, Leissner and other employees" of the bank, according to prosecutors. Mr. Ng reported to Mr. Leissner at Goldman.

Ng, a managing director at Goldman, and Leissner, who worked as Southeast Asia chairman and managing director at Goldman, sought on three occasions to make Low a formal client, but were rebuffed because officials in the compliance group had "concerns" about the source of the person's wealth and deemed he would not be a "suitable" client.

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