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Fort Lauderdale Federal Crime Attorney > Blog > International Crime > Two Goldman Sachs Bankers Charged In Malaysian Financial Scandal

Two Goldman Sachs Bankers Charged In Malaysian Financial Scandal

The Justice Department has brought criminal charges against two former Goldman Sachs bankers and a Malaysian financier in connection with the financial scandal known as 1MDB, which involved the misuse billions of dollars in Malaysian government funds.

In the indictment unsealed by a federal court Thursday, prosecutors accuse former Goldman Sachs banker Ng Chong Hwa and financier Low Taek Jho – known as “Jho Low” — with conspiring to launder money embezzled from 1Malaysia Development Berha — known as 1MDB — Malaysia’s investment development fund, as well as conspiring to violate the Foreign Corrupt Practices Act.

The Justice Department also says another former Goldman Sachs banker, Tim Leissner, has pleaded guilty to conspiring to launder money and violate anti-bribery laws. A lawyer for Leissner was unavailable for comment when NPR phoned.

News reports say Ng has been arrested in Malaysia. The Wall Street Journal reports that Low was last seen in China but remains at large. The Associated Press quotes a spokesman for Low as saying, “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.”

While the Justice Department has been investigating the 1MDB scandal for some time and has pursued civil lawsuits, these are the first criminal charges the department has brought against individuals related to the 1MDB scandal, according to the Wall Street Journal, which brought international attention to the scandal itself in 2015.

The indictment accuses Leissner and Ng and of using Low’s connections to government officials in Malaysia and Abu Dhabi to “retain business from 1MDB for [Goldman Sachs] through the promise and payment of hundreds of millions of dollars in bribes,” including three bond transactions that raised about $6.5 billion for the 1MDB fund between 2012 and 2013.

While that money was supposed to be used for three development projects, court documents allege the men and their fellow conspirators used the laundered money to pay bribes and “for the personal benefit of the co-conspirators and their relatives and associates, including, among other things, for the purchase of luxury residential real estate in the United States and artwork from an auction house in New York, New York, and the funding of major Hollywood films.”

In total, more than $2.7 billion was misappropriated by the three men and other alleged associates, according to court filings.

Goldman Sachs, which made hundreds of millions from their work with the fund, denies any wrongdoing.

Set up in 2009 by then-Prime Minister Najib Razak to promote foreign investment in Malaysia, the 1MDB fund drew attention when quickly amassed an estimated $11 billion in debt.

An investigation by the Journal revealed millions linked to the fund ended up in Najib’s personal bank accounts. Najib tried to block investigations, but after losing an election earlier this year he was arrested in July and has since been charged with multiple counts of corruption. He denies any wrongdoing.

His wife, Rosmah Mansor, was also arrested in October and charged in connectionwith the scandal.

The couple are awaiting trial.

https://www.npr.org/2018/11/01/663197943/2-goldman-sachs-bankers-charged-in-malaysian-financial-scandalNovember 1, 2018 by Ashley Waterman

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