Goldman Sachs Bankers Charged In Malaysian Financial Scandal

AFP pic

JHO Low, the Malaysian financer at the centre of the country's corruption scandal, and two other high-flying Goldman Sachs bankers were slapped with formal charges in the USA on Thursday for embezzling billions from the 1Malaysia Development Berhad (1MDB) state fund.

Both men were charged with conspiracy to commit bribery and conspiracy to commit money laundering. Between 2009 and 2014, top executives and associates of Najib looted $4.5 billion from the fund, laundering it through the U.S., Singapore, Switzerland and other countries, according to the U.S. Justice Department.

US prosecutors had painted Low as a bon vivant and a central figure who set up shell companies and arranged the transfers of tens of millions of dollars to pay Malaysian government officials, while Singapore investigators have called him a "key person of interest".

Goldman did not immediately respond to a request for comment. Funds from 1MDB that were raised for development projects were used to pay for luxury real estate, art, lavish parties and more, US investigators say.

The scandal has prompted investigations around the world and played a role in the election defeat earlier this year of Malaysia's former prime minister, Najib Razak, who is accused of pocketing $US700m from the fund he set up.

The Justice Department also says another former Goldman Sachs banker, Tim Leissner, has pleaded guilty to conspiring to launder money and violate anti-bribery laws. Among its services, it helped raise $6.5 billion for the fund and earned nearly $600 million in fees for the bond issuance.

Mr Low has previously denied charges filed in Malaysia, adding that it would be "impossible" for him to receive a fair trial there.

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A journalist for the Hill Reporter , Ed Krassenstein, was one of the journalists contacted by the Lorraine Parsons persona. The law firm told me late on Tuesday afternoon, however, that it has "no record of this individual working for our firm".

Goldman Sachs arranged bond offerings that helped the fund raise over US$6 billion, much of which, according to the worldwide authorities, was squirrelled away in private accounts and used to buy yachts, paintings and high-end real estate. The firm has said it was co-operating with the investigation.

The documents refer to a third unnamed Goldman official who is an Italian national.

Until two weeks ago, Mr. Vella was Goldman's co-head of investment banking in Asia.

Hundreds of millions of dollars in bribes were subsequently paid to officials in Malaysia and Abu Dhabi.

Meanwhile, a U.S. court has allowed the sale of a private jet allegedly bought by Low with money taken from 1MDB, court filings show. Authorities say billions of dollars were embezzled from the state fund to buy art, property, a private jet - and even to help finance the Wolf of Wall Street film starring Leonardo DiCaprio. "Low held no formal position at 1MDB, nor was he ever employed by Goldman Sachs, or the Governments of Malaysia or Abu Dhabi", Low's spokesman said. It is unclear if Mr Ng has a lawyer.

According to the justice department, Low, Ng, Leissner and other conspirators regularly bribed government officials in order to maintain Goldman's lucrative contracts with 1MDB. Malaysian authorities have revoked his passport and issued an arrest warrant for him, and have also applied for an Interpol red notice seeking assistance from the United Arab Emirates, Indonesia, India, Myanmar, China and Hong Kong.

He is cooperating with DOJ investigators, The Wall Street Journal reported.

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