Security & Fraud

Ex-DoJ Staffer Pleads Guilty In 1MDB Scandal

George Higginbotham, a former Department of Justice employee in the U.S., pleaded guilty as part of the  1Malaysia Development Berhad bribery and embezzlement scandal.

According to a report in the Financial Times, citing the U.S. Department of Justice, Higginbotham, 46, pleaded guilty to helping the “primary architect” of the scam funnel tens of millions of dollars into the U.S. to bankroll a lobbying campaign on the mastermind of the scam’s behalf. In addition to the guilty plea, the Financial Times reported the Department of Justice filed a civil action aiming to recover $73 million brought into the U.S. fraudulently by the ex-Department of Justice official and Pras Michel, the rap star, on behalf of Jho Low, the accused mastermind of the scam. Higginbotham was the senior congressional affairs specialist for the DoJ from July of 2016 to 2018, noted the report.

The DoJ said Higginbotham “played no role” in its investigation into the scheme that resulted in loss at Malaysia’s state fund 1MDB after Goldman Sachs helped it raise $6.5bn.  The DoJ contends Higginbotham and Michel, who has not been charged criminally in the case, opened multiple U.S. bank accounts in 2017 for the purpose of receiving funds from Low. “According to the allegations in the complaint, Michel and Higginbotham defrauded U.S. financial institutions and laundered millions of dollars into the United States as part of an effort to improperly influence the department’s investigation into the massive embezzlement and bribery scheme involving 1MDB,” said Brian Benczkowski, assistant attorney-general, reported the Financial Times. The report noted Higginbotham admitted to forging loan and consulting documents to trick the banks and other regulator as to where the money was really coming from and the purpose of it, which was to fund a lobbying campaign to resolve civil and criminals issues related to the inquiry into 1MDB.  “Higginbotham further admitted that another purpose of the lobbying campaign was an attempt to persuade high-level U.S. government officials to have a separate foreign national, who was residing in the U.S. on a temporary visa at the time, removed from the U.S. and sent back to his country of origin,” the DoJ said.

 

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