US Justice Department indicts Jho Low and Goldman Sachs banker Roger Ng Chong Hwa in 1MDB scandal
- Former 1MDB middleman Jho Low maintains his innocence but remains at large, while Roger Ng has been arrested in Malaysia
- Another Goldman banker, Tim Leissner, pleaded guilty and will forfeit US$43 million for conspiring to launder cash and violate the Foreign Corrupt Practices Act
US prosecutors unveiled criminal charges on Thursday against two former Goldman Sachs bankers and Malaysian financier Low Taek Jho tied to the alleged theft of billions from Malaysian sovereign wealth fund 1MDB.
Prosecutors in the US Attorney’s Office in Brooklyn announced that Tim Leissner, former partner for Goldman Sachs in Asia, had pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act, and agreed to forfeit US$43.7 million.
Roger Ng Chong Hwa, the other charged former Goldman banker, was arrested in Malaysia at the request of US authorities and is expected to be extradited, according to John Marzulli, a spokesman for the prosecution.
The third person, the financier popularly known as Jho Low, remains at large. Malaysian authorities have issued an arrest warrant for him and have also applied for an Interpol red notice seeking assistance from the United Arab Emirates, Indonesia, India, Myanmar, China and Hong Kong.
Low, whose Malaysian passport has been revoked, has previously denied any wrongdoing.
A spokesman for Low, who held no official position at the fund but was believed to have huge influence over its workings, said that he “maintains his innocence”.
“Mr Low held no formal position at 1MDB, nor was he ever employed by Goldman Sachs, or the governments of Malaysia or Abu Dhabi,” the spokesman said.
“The US Department of Justice specifically states that the charges in the indictment are allegations, and that Mr Low is presumed innocent unless and until proven guilty.
“Mr Low simply asks that the public keep an open mind regarding this case until all of the evidence comes to light, which he believes will vindicate him.”
Goldman has placed its former co-head of Asia investment banking, Andrea Vella, on leave over his role in the firm’s involvement with the case, pending a review of allegations, Bloomberg reported on Thursday.
The government of former Malaysian Prime Minister Najib Razak set up 1Malaysia Development Berhad, or 1MDB, in 2009. An estimated US$4.5 billion was misappropriated from 1MDB by high-level officials of the fund and their associates between 2009 and 2014, the US Justice Department has alleged.
Najib has consistently denied wrongdoing in connection with alleged graft involving 1MDB.
According to the indictment against him, Low never held a formal position with the fund but he worked as an intermediary in numerous 1MDB transactions involving Goldman and others.
Prosecutors say Low, Ng, and Leissner conspired to launder the proceeds of fraud involving 1MDB through the US financial system. Some of the laundered funds were then allegedly used to pay bribes to obtain business for Goldman. Other funds were used for the personal benefit of defendants, including purchases of luxury US real estate and art.
Goldman did not immediately respond to a request for comment but has repeatedly denied any wrongdoing and said it is fully cooperating with authorities.
According to prosecutors, the investment bank generated about US$600 million in fees for its work with 1MDB, which included three bond offerings in 2012 and 2013 that raised US$6.5 billion. Leissner, Ng and others received large bonuses in connection with that revenue.
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 under the Foreign Corrupt Practices Act, a federal law targeting official bribery abroad.
At least six countries, including Malaysia, the United States and Switzerland, have been investigating alleged thefts from 1MDB.
The 1MDB investigations in the United States and Malaysia have gathered pace since Najib unexpectedly lost a general election in May to Mahathir Mohamad, who returned to power 15 years after he retired as prime minister.
Since the election, Malaysian authorities have brought 38 charges against Najib. Many of the charges – multiple counts of corruption, money laundering and criminal breach of trust – are linked to 1MDB.
Najib has pleaded not guilty to all the charges and has consistently denied wrongdoing.