Security & Fraud

Department Of Justice Announces Indictments In 1MDB Fund Scheme

The U.S. Justice Department announced Thursday (November 1) a three-count criminal indictment charging two individuals in a conspiracy to launder billions of dollars embezzled from 1Malaysia Development Berhad (1MDB), the investment development fund.

The Department of Justice also charged the two with conspiring to violate the Foreign Corrupt Practice Act (FCPA) by paying bribes to Malaysian and Abu Dhabi officials. Charged are Low Taek Jho, 36, also known as “Jho Low,” and Ng Chong Hwa, 51, also known as “Roger Ng,” the Justice Department said in a press release announcing the charges. Ng is also charged with conspiring to violate the FCPA by circumventing the internal accounting controls of a major New York-headquartered financial institution, which underwrote more than $6 billion in bonds issued by 1MDB in three separate bond offerings in 2012 and 2013, while Ng was employed at the financial institution as a managing director. The DoJ didn’t name the firm but the Wall Street Journal reported all three are former employees of Goldman Sachs. Ng was arrested in Malaysia, pursuant to a provisional arrest warrant issued at the request of the United States, while Low remains at large, the Justice Department said in the release.

Also unsealed in federal court in Eastern District of New York is that Tim Leissner, 48, the former Southeast Asian chairman and participating managing director of the financial institution, is pleading guilty to conspiring to launder money and conspiring to violate the FCPA by 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. According to court filings, Leissner has been ordered to forfeit $43.7 million as a result of his crimes, the Department of Justice noted.

1MDB is a Malaysian state-owned and controlled fund created to pursue investment and development projects for the economic benefit of Malaysia and its people. As alleged in court filings, between approximately 2009 and 2014, as 1MDB raised money to fund its projects, billions of dollars were misappropriated and fraudulently diverted from 1MDB, including funds 1MDB raised in 2012 and 2013 through three bond transactions that it executed with the financial institution, the Department of Justice said.  As part of the scheme, Low, Ng, Leissner, and others conspired to bribe government officials in Malaysia and Abu Dhabi to obtain and retain lucrative business for the financial institution, including the 2012 and 2013 bond deals. They also allegedly conspired to launder the proceeds of their criminal conduct through the U.S. financial system by purchasing luxury residential real estate in New York City and elsewhere, and artwork from a New York-based auction house, among other things, and by funding major Hollywood films, the DOJ contends.

——————————–

LATEST INSIGHTS:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the latest PYMNTS Digital Drive Report 

TRENDING RIGHT NOW

To Top