US Justice Department charges Malaysian and Goldman bankers

The US Justice Department announced charges on Thursday against a fugitive Malaysian financier and two former Goldman Sachs bankers. 

Goldman Sachs, which said it is cooperating in the probe, wasn't named in the DOJ criminal documents, but was referred to as "financial institution #1."

The three men are accused of being involved in a money laundering and bribery scheme that pilfered billions of dollars from a Malaysian investment fund that was created to spur economic development projects in that country.

A three-count indictment charged Low Taek Jho, also known as Jho Low, with misappropriating money from the state-owned fund. He is accused of using it for bribes and kickbacks to foreign officials, to pay for luxury real estate, art and jewelry in the United States and helping to finance Hollywood movies, including "The Wolf of Wall Street."

Also charged was Tim Leissner, a former Goldman Sachs banker, who pleaded guilty to money laundering conspiracy and to conspiring to violate foreign bribery laws.

Another former Goldman 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.

Leissner's attorney did not return messages seeking comment. Goldman Sachs, which the indictment says raised about $6.5 billion (€5.7 billion) through bond offerings for the fund, also did not immediately comment.

Malaysian police said in July that Low had fled Macau to an unknown destination. Low, who remains at large, issued a statement through a spokesman maintaining his innocence.

"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," the statement said.

1MDB fund scandal

The charges announced are the first arising from the epic corruption scandal at the Malaysian state investment fund known as 1MDB. In 2016, the Justice Department moved to recover more than $1 billion that it said had been stolen.

In a speech last year in Washington, US Attorney General Jeff Sessions denounced the scandal as "kleptocracy at its worst."

The stolen funds were used on a "lavish spending spree," the attorney general said, including a $265 million yacht and a $100 million investment in the music label EMI. 

"In total, 1MDB officials allegedly laundered more than $4.5 billion in funds through a complex web of opaque transactions and fraudulent shell companies with bank accounts in countries ranging from Switzerland and Singapore to Luxembourg and the United States," Sessions said.

The fund, 1Malaysia Development Berhad, was set up in 2009 by then-Prime Minister Najib Razak to promote economic development.

Najib was the chairman of its advisory board and as finance minister held veto power over its activities. A friend of Najib's stepson Riza Aziz, Low had no official role at 1MDB but had considerable influence over its dealings and was in frequent contact with Najib, U.S. authorities have said.

The scandal has already had major political ramifications in Malaysia, where Najib in 2015 sacked his attorney general and a deputy prime minister for demanding answers about 1MDB.

Najib and his ex-treasury chief were charged last week with criminal breach of trust involving 6.64 billion ringgit (€1.4 billion, $1.6 billion), charges that came on top of 32 earlier counts of corruption, breach of trust and money laundering that Najib faces in connection with the 1MDB scandal.

av/bw (AP, AFP)

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