Malaysia Charges Wall Street Giant Goldman Sachs, Former Executives in 1MDB Probe

[misskit]

Malaysia filed criminal charges Monday against U.S.-based investment bank Goldman Sachs, two of its former executives, fugitive financier Jho Low and a lawyer for allegedly misappropriating money through bonds linked with the 1MDB state fund in 2012 and 2013, officials said.


Goldman Sachs must be held accountable for benefiting from U.S. $600 million (2.5 billion ringgit) for underwriting and arranging the series of bonds, Malaysian Attorney General Tommy Thomas said, as he announced the latest move in a multinational investigation into alleged massive corruption at 1Malaysia Development Berhad (1MDB) under the previous government.


“In addition to personally receiving part of the misappropriated bond proceeds, those employees and directors of Goldman Sachs received large bonuses and enhanced career prospects at Goldman Sachs and in the investment banking industry generally,” Thomas said in a statement issued Monday.


“Their fraud goes to the heart of our capital markets, and if no criminal proceedings are instituted against the accused, their undermining of our financial system and market integrity will go unpunished.”


Low Taek Jho, who is better known as Jho Low, former Goldman Sachs executives Tim Leissner and Roger Ng Chong Hwa along with Jasmine Loo Ai Swan, an ex-legal counsel for the cash-strapped fund formally known as 1Malaysia Development Berhad (1MDB), made false or misleading statements to misappropriate $2.7 billion (11.25 billion ringgit) from the proceeds of the three bonds, according to Thomas.


They are charged with violating the Capital Markets and Services Act of 2007.


Because the Malaysian government considers the allegations to be grave violations of its securities law, it is seeking a criminal fine of more $2.7 billion along with the $600 million gained by Goldman Sachs, Thomas said. In addition, the defendants could face a maximum jail sentence of 10 years if convicted.


The Malaysian charges related to the bond issues are similar to charges filed by the U.S. government in November against Jho Low, Ng and Leissner. Leissner pleaded guilty to two charges of money laundering related to 1MDB and was fined $43.7 million (182 million ringgit).


Goldman Sachs, a powerhouse on Wall Street, denied any wrongdoing related to the Malaysian charges, the Associated Press reported.


“We believe these charges are misdirected and we will vigorously defend them and look forward to the opportunity to present our case,” Goldman Sachs spokesman Edward Naylor said in a statement. “The firm continues to cooperate with all authorities investigating these matters.”



Three schemes


In its indictment last month, the U.S. Department of Justice (DOJ) alleged that the conspirators cooked up three schemes to collect funds from 1MBD and diverted portions for their own use.


The first scheme, named Project Magnolia, began in early 2012, according to DOJ. Jho Low, Ng, Leissner and other unnamed conspirators allegedly agreed that assistance from Goldman, 1MDB would issue $1.75 billion in bonds guaranteed by an entity owned by Abu Dhabi’s government.


The U.S. government alleged that more than $500 million (2 billion ringgit) was misappropriated and diverted from 1MDB through wire transfers to bank accounts in the name of shell companies owned and controlled by Low, Leissner, Ng and other co-conspirators.


Beginning in May 2012 and running through 2013, the trio and unnamed conspirators pushed through a pair of bond transactions, Project Maximus and Project Catalyze, designed to raise more than $4 billion (16.7 billion ringgit) for 1MDB projects, the DOJ alleged.


“More than $2.7 billion (11.25 billion ringgit) was misappropriated from 1MDB and Jho Low, Ng, Leissner and others conspired to launder this money through the U.S. financial system to pay bribes to foreign officials and for the personal benefit of themselves and their relatives,” the U.S. government said at the time.


Among those named in the U.S. indictment as having received kickbacks were Malaysian Official 1 (MO1) and his wife, referred to as “the Madam,” in email correspondence among the three. MO1 has not been named in previous lawsuits related to 1MDB filed by the Justice Department, but sources have identified him as former Prime Minister Najib Razak, who faces 39 charges related to 1MDB in Malaysian courts.


Najib established 1MDB in 2009 to fund development projects throughout Malaysia.

Investigators allege that $4.5 billion (18.7 billion ringgit) was embezzled from the beleaguered fund and laundered through real estate and other assets.



Guilt ‘predetermined by politics’


Jho Low, through a statement issued by an Australian public relations firm on Monday, maintained his innocence and asserted that he would not be given a fair trial in Malaysia.


“Mr. Low will not submit to any jurisdiction where guilt has been predetermined by politics and there is no independent legal process,” the statement attributed to Benjamin Haslem, co-CEO of Sydney-based Wells Haslem Mayhew Strategic Public Affairs.


Ng, who was arrested in Malaysia in relation to the U.S. charges, is the only one of the four defendants in custody. On Dec 13, a Malaysian court declined Ng’s application to be released on bail as High Court Judge Collin Lawrence Sequerah branded him as likely to abscond.


“This is a special circumstance case and Ng is a flight risk,” the judge said.


Ng is expected to be extradited to the United States to face trial there.


Malaysian officials have said that Jho Low and Loo absconded and were to be extradited when captured.


https://www.benarnews.org/english/ne...018152209.html

[tomcat]

...here's the payout:

Jho Low Stole $1.42 Billion From Goldman 1MDB Deals, FBI Agent Says

• FBI agent detailed 1MDB fraud proceeds at trial of Roger Ng
• Najib got $756 million, son-in-law Aziz received $238 million

Jho LowPhotographer: Michael Loccisano/Getty Images
By Patricia Hurtado (Bloomberg)

March 15, 2022, 2:31

Fugitive financier Jho Low, the alleged mastermind of the 1MDB scandal, stole $1.42 billion from three bond transactions that Goldman Sachs Group Inc. arranged for the Malaysian wealth fund, an FBI agent who traced the funds testified.

Federal Bureau of Investigation agent Eric Van Dorn took the stand Monday at the trial of ex-Goldman banker Roger Ng in federal court in Brooklyn, New York. In addition to his testimony about Low, he told the jury that former Malaysian Prime Minister Najib Razak reaped $756 million of the $6.5 billion raised in the bond offerings, while his stepson, Riza Aziz, pocketed $238 million.

Ng, the only Goldman banker to go on trial over the epic looting of sovereign wealth fund 1Malaysia Development Bhd, was charged with conspiring with Low and his former boss Tim Leissner in the massive fraud. Leissner, who pleaded guilty and is cooperating with the government, spent more than a week on the stand as the star prosecution witness against Ng. Low is not in custody and remains a fugitive.

Prosecutors have long alleged that Low paid bribes to officials in Malaysia and Abu Dhabi to facilitate the deals, but Van Dorn’s testimony was the first time the U.S. has detailed how those involved in the 1MDB deals were paid and how much they received.

Van Dorn, who is a forensic account for the FBI, said he reviewed 59,000 bank records to determine where the money from the three 1MDB deals went. He said Khadem al-Qubaisi, a former managing director of Abu Dhabi’s state-owned International Petroleum Investment Co., which guaranteed the 1MDB transactions, received $472.8 million. He also described another Abu Dhabi official who worked with the IPIC’s subsidiary and received $76.6 million.

He said Aziz invested at least $60 million of his 1MDB money to produce “The Wolf of Wall Street.” Aziz was a friend of Low’s, the prosecutors said.
Matthew Schwartz, a lawyer for Aziz, didn’t immediately return a call seeking comment on the testimony.

Aziz twice before settled Justice Department lawsuits over his role in the 1MDB scandal. In 2017, his Red Granite Inc. production company agreed to pay $60 million to settle U.S. claims that “Wolf” was financed with stolen 1MDB money. In 2020, he resolved a separate government suit by agreeing to drop claims to tens of millions of dollar in U.S. and U.K. real estate without admitting wrongdoing.

Ng got $35.1 million from two of the three bond transactions, while Leissner received $73.4 million during the scheme, Van Dorn testified.
At the time of his 2018 plea, Leissner agreed to forfeit just $43.7 million which the U.S. said was the money he earned in the scheme. It’s unclear why Leissner is forfeiting a lesser amount. Ng’s defense team, which has been trying to suggest that Leissner is getting a favorable deal, tried to ask Van Dorn about the former banker’s forfeiture, but the judge barred questions about the it.

One of Ng’s lawyers, Jacob Kaplan, questioned Van Dorn about how Leissner collected an additional $39.7 million which went from Low’s accounts into an entity under the control of Leissner’s ex-wife Judy Chan Leissner, suggesting that the government had also given Leissner a break on these funds.
Van Dorn said it was because his chart was based on certain transactions which occurred during the time frame of the three 1MDB bond transactions and that he’d only included money directly traceable back to Goldman Sachs’s funding of the three deals.

Najib was convicted in Malaysia and sentenced to 12 years in prison and is appealing. A spokesman for Najib didn’t immediately return an email seeking comment on Van Dorn’s testimony. Meanwhile, Al-Qubaisi was sentenced in Abu Dhabi in 2019 to serve 15 years in prison and ordered along with the other IPIC executive, to repay $336 million, according to the Wall Street Journal.



The case is U.S. v. Low Taek Jho, 18-cr-538, U.S. District Court, Eastern District of New York (Brooklyn).