Malaysian financier Low Taek Jho, the alleged mastermind of a scheme to siphon billions of dollars from the fund, was charged in absentia. He is accused of conspiring with Roger Ng, then a Goldman Sachs banker–to launder billions of dollars embezzled from 1MDB, known formally as 1 Malaysia Development Bhd.
Former senior Goldman Sachs banker Tim Leissner also pleaded guilty to conspiring to launder money and violating the Foreign Corrupt Practices Act by paying bribes to Malaysia and Abu Dhabi officials and circumventing Goldman’s internal accounting controls, according to prosecutors. He’s been ordered to forfeit $43.7mn.
Low, Ng and Leissner are the first individuals to be charged in the US in relation to the scandal at 1MDB. According to international authorities, much of the bond offerings that Goldman Sachs arranged that helped the fund raise more than $6bn, was squirreled away in private accounts—which were then used to buy yachts, paintings and high-end real estate.
Prosecutors also alleged that bribes and kickbacks were paid in connecting with Goldman’s bond offerings on 1MDB’s behalf, which generated some $600 million in fees for the bank. Such payments were “known to Ng, Leissner and other employees” of the bank, according to them. Prosecutors further stated that one of the people who knew about the payments was an Italian national working for the bank in Asia — a description that matches that of Andrea Vella, who the bank recently placed on leave.
Leissner, in his plead, admitted that he bribed officials in two countries — Malaysia and the United Arab Emirates — to get bond deals for Goldman Sachs. He further confessed that he and others arranged the 1MDB fundraising as bond offerings, because it would generate higher fees for the bank than other fundraising.
Leissner admitted to enriching himself with more than $200 million in proceeds from 1MDB bonds flowed into accounts controlled by him and a relative.
While Roger Ng was arrested this week in Malaysia, Jho Low remains at large.
“Mr. Low maintains his innocence,” a spokesman, Isaac Benjamin, stated through Low’s legal team. Benjamin said that Low held no formal position at 1MDB and wasn’t employed by Goldman Sachs or the governments of Malaysia or Abu Dhabi.
“Mr. Low is presumed innocent unless and until proven guilty,” Benjamin further said. “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.”
Michael DuVally, a Goldman Sachs spokesman, declined to comment. Goldman declined to comment on Vella’s behalf, and a call to Vella wasn’t immediately returned.