US unveils indictments in Malaysia bribery scandal

Agence France-Presse

Posted at Nov 02 2018 01:02 AM

US officials unveiled criminal indictments Thursday against a former official with scandal-plagued Malaysian sovereign wealth fund 1MDB and a former Goldman Sachs banker involved in an elaborate alleged bribery scheme.

The US Justice Department arrested former Goldman Sachs banker Ng Chong Hwa in Malaysia Thursday, while the former 1MDB official, Low Taek Jho, remains at large, officials said at a press release. Another ex-Goldman official, Tim Leissner, pleaded guilty and agreed to pay $43.7 million in restitution of ill-gotten gains. 

The 1MDB scandal has roiled politics in Malaysia, leading to criminal charges against former Prime Minister Najib Razak. Thursday's indictments and guilty plea constitute the first US indictments in the far-flung case.

The men were charged with conspiring to launder billions of dollars from 1 Malaysia Development Berhad, a strategic development fund set up for the benefit of the development of the country, and conspiring to bribe officials in Malaysia and Abu Dhabi, violating the Foreign Corrupt Practices Act. 

Ng was also charged with conspiring to violate the internal controls at Goldman Sachs, which underwrote more than $6 billion in bonds issued by 1MDB, the government said.

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.

Hundreds of millions of dollars in bribes were subsequently paid to officials in Malaysia and Abu Dhabi. After the bond transaction was executed, more than $500 million of the bond proceeds were misappropriated into shell companies controlled by Low, Leissner, Ng and other co-conspirators, the government said.

Some of the funds went to finance the movie, "The Wolf of Wall Street," a 2013 Oscar-nominated film about Jordan Belfort, a corrupt stockbroker who was sent to prison for fraud, the government said.