Malaysia 1MDB scandal

US to charge Malaysian businessman Jho Low in 1MDB scandal, report says

Report says the prosecution’s plans could change or be dropped as the probe continues and there was no timing provided on when the charges could be filed

PUBLISHED : Wednesday, 22 March, 2017, 2:15pm
UPDATED : Wednesday, 22 March, 2017, 10:37pm

US authorities plan to lodge criminal charges against a businessman suspected to be at the centre of a corruption scandal that has embroiled Malaysia’s prime minister, the Wall Street Journal reported.

Allegations that huge sums were misappropriated from the Malaysian state fund 1MDB have triggered a scandal which has buffeted Prime Minister Najib Razak, who founded 1MDB, though the leader has denied any wrongdoing.

Najib is a family friend of Malaysian financier Low Taek Jho, also known as Jho Low, against whom the US plans to file criminal charges of wire fraud and money laundering, according to the report published on Tuesday.

The planned charges against Low will be separate from civil proceedings filed by the US Justice Department to seize assets believed to have been bought using billions of dollars siphoned from 1MDB, the report added, citing people familiar with the matter.

The US Department of Justice didn’t respond to a call for comment on the report. Low’s Hong Kong-based company Jynwel Capital didn’t respond immediately to an email request for comment on the potential charges. 1MDB, which has consistently denied any wrongdoing, didn’t immediately reply to a request for comment.

Low, known for partying with Lindsay Lohan and Paris Hilton, directed funds from 1MDB to connected individuals and for the “personal gratification” of himself and his associates, US prosecutors had said. Low previously told South China Morning Post that his ties to 1MDB were “informal” and denied any wrongdoing.

Global investigators from about 10 countries believe that billions of dollars were extracted from 1Malaysia Development Bhd, set up by Najib in 2009.

Whistle-blowers say Low helped establish 1MDB and made key financial decisions although he had no official positions in Malaysia.

Billions are believed to have moved through Singapore, Switzerland and other wealth centres in order to buy art, real estate and invest in Hollywood movies.

Singapore and Switzerland have also launched investigations into the cross-border flow of allegedly stolen 1MDB money through the global financial system.

A US Justice Department team has just visited Singapore “to conduct interviews related to Mr Low and other aspects of the 1MDB matter,” the Wall Street Journal said, quoting two people with knowledge of the trip.

Singapore, a regional financial centre known for its tough stance against corruption, was the first country to hand down criminal convictions related to the 1MDB investigations.

The city-state’s courts have jailed four private bankers so far, including Singaporean Yeo Jiawei, who was sentenced last December to 30 months in prison.

It was revealed during Yeo’s trial that he had worked closely with Low, who has not been charged in Singapore.

Singapore has also closed the local branches of two Swiss private banks - BSI and Falcon Private Bank -- used in the transfer of illicit funds.

The Monetary Authority of Singapore last week banned a former Goldman Sachs banker from working in the country’s financial industry for 10 years after he was linked to the 1MDB scandal, and said it plans to impose bans on three more people.

Additional reporting by Bloomberg