Financier and two former Goldman bankers charged in vast Malaysian fraud case


Malaysian financier Low Taek Jho and former Goldman Sachs bankers Tim Leissner and Roger Ng Chong Hwa were indicted on charges of conspiracy to launder billions of dollars in illegal proceeds from Malaysia's 1MDB wealth fund, United States federal prosecutors in Brooklyn said yesterday.

Also unsealed yesterday in federal court in the Eastern District of NY was the guilty plea of Tim Leissner, the former South-east Asia Chairman and participating managing director of the Financial Institution, to a two-count criminal information charging Leissner with conspiring to launder money and conspiring to violate the FCPA by both paying bribes to various Malaysian and Abu Dhabi officials and circumventing the internal accounting controls of the Financial Institution while he was employed by it.

Leissner acknowledged paying millions of dollars in bribes and kickbacks to government officials in Malaysia and Abu Dhabi, according to court records.

The long-ruling coalition was ousted in a May election, and then-Prime Minister Najib Razak, who set up the fund, now faces criminal charges in Malaysia. Goldman Sachs, which the indictment says raised about $6.5 billion through bond offerings for the fund, also did not immediately comment. The banker, Andrea Vella, was put on leave in October, according to a person familiar with the matter. The justice department's kleptocracy asset recovery initiative has already filed civil charges aimed at seizing assets allegedly bought with embezzled 1MDB funds, including a $39m mansion in the Los Angeles hills and a $30m penthouse in Manhattan overlooking Central Park. The unidentified co-conspirator agreed with Mr. Leissner not to tell anyone in Goldman's compliance department about the bribes, according to court documents.

Roger Ng, the other charged former Goldman banker, was arrested in Malaysia, prosecutors said. Low misappropriated billions of dollars from the 1MDB fund.

U.S. authorities have previously filed civil suits aimed at recovering luxury goods, cash and other items allegedly purchased with money from the fund.

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The Malaysian government is now seeking restitution from Goldman.

At least six countries, including Malaysia, the United States and Switzerland, have been investigating alleged thefts from 1MDB. 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.

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

Mr Ng was a managing director at Goldman until his departure in May 2014.

Ng and Leissner's efforts in the scheme dated to 2009, when they began cultivating a relationship with Low, who allegedly "worked as an intermediary in relation to 1MDB and other foreign government officials" but did not hold a formal position at 1MDB and was never employed by the government.

Both Mr. Leissner and Mr. Ng left the bank more than a year ago.