Ex-Goldman pair 'helped to launder 1MDB billions'

Ex-Goldman pair 'helped to launder 1MDB billions'

Federal prosecutors filed criminal charges on Thursday against a Malaysian financier and two former Goldman Sachs investment bankers who helped raise money for a Malaysian government investment fund from which about US$4-billion disappeared.

News reports yesterday said former senior Goldman Sachs banker in Asia Tim Leissner pleaded guilty to United States bribery and money laundering charges.

The criminal indictment, unsealed in NY, also charged Jho Low and Ng Chong Hwa, a former Goldman Sachs banker also known as Roger Ng, with paying bribes to various Malaysian and Abu Dhabi officials.

The set of charges represent the first criminal prosecutions in the USA arising from the epic corruption scandal at the state investment fund known as 1MDB.

Goldman acted as the primary bond underwriter for the fund.

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.

The alleged misappropriation of billions of dollars from the 1MDB fund has become the focus of an worldwide scandal reaching from Malaysia to the United States to Hong Kong.

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Under one scheme involving a 2012 "Project Magnolia" bond offering by 1MDB, Low allegedly told the ex-Goldman bankers they needed to bribe officials in Malaysia and Abu Dhabi to guarantee that the transaction went through. Another former bank official, Ng Chong Hwa, 51, also known as Roger Ng, was arrested earlier Thursday in Malaysia and accused of circumventing internal accounting controls, prosecutors said. Prosecutors charge that Malaysian officials stole billions from the fund to buy property, art and other items including investments in movies such as The Wolf of Wall Street. Earlier this week, Malaysia put up for auction the Equanimity, a US$250 million luxury yacht, also allegedly bought by Low with 1MDB funds.

Some of those allegations were described in civil forfeiture complaints filed by federal prosecutors in Los Angeles previous year.

At least six countries, including Malaysia, the United States and Switzerland, have been investigating alleged thefts from 1MDB. Najib accuses the new administration of seeking political vengeance and has vowed to clear his name. The authorities have examined what role, if any, the firm played in the 1MDB fraud, whether it knew about the alleged fraud and whether it should have done more to uncover the misappropriation of funds. When the banks questioned large money transfers, the conspirators used fake business documents to address their concerns, the department says.

A spokesman for Low did not immediately respond to a request for comments.

Goldman did not immediately have a comment Thursday.

Mr. Leissner, who worked closely with the Malaysian fund, had been in plea talks with federal prosecutor for some time.

Ng was formerly managing director at 1MDB. The BBC has not yet been able to contact a lawyer representing him. Such payments were "known to Ng, Leissner and other employees" of the bank, according to prosecutors.

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