United States charges Low, ex-Goldman bankers in 1MDB case

Jho Low contacted Mahathir's adviser last week to seek immunity: Report

Jho Low contacted Mahathir's adviser last week to seek immunity: Report

A former senior Goldman Sachs banker in Asia pleaded guilty to US bribery and money laundering charges and his deputy was arrested in Malaysia, as federal prosecutors in Brooklyn laid out conspiracy allegations related to Goldman Sachs's lucrative fundraising for Malaysian wealth fund 1MDB.

1Malaysia Development Bhd., better known as 1MDB, is at the heart of a scandal which allegedly saw $4.5 billion misappropriated from the fund.

These are the first criminal charges brought in the case, and the indictment accuses the men of laundering dirty money through the USA financial system by purchasing luxury New York City real estate, artwork from an unnamed New York-based auction houses, and by funding unspecified major Hollywood productions.

The 1MDB scandal has roiled politics in Malaysia, leading to criminal charges against former Prime Minister Najib Razak.

The authorities contend that the bribes and kickbacks were paid to secure 1MDB's bond underwriting business for the bank. "The charges that were leveled, there were no indication or no accusation of benefiting, personally benefiting, from the decisions we have taken".

The DOJ said Low remains at large.

Michael DuVally, a Goldman Sachs spokesman, declined to comment.

"Mr Low maintains his innocence", read the statement.

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According to prosecutors, the investment bank generated about $600 million in fees for its work with 1MDB, which included three bond offerings in 2012 and 2013 that raised $6.5 billion.

Between 2009 and 2014, Leissner and Ng reportedly leveraged on Low's closeness with the officials through the promise and payment of hundreds of millions of dollars in bribes.

Leissner, a former top Goldman banker in Asia who led Goldman Sachs' bond offerings for the fund, pleaded guilty to conspiring to launder money and to violating the Foreign Corrupt Practices Act by paying bribes to Malaysian and Abu Dhabi officials and circumventing Goldman's internal accounting controls, according to prosecutors.

Goldman Sachs arranged bond offerings that helped the fund raise over US$6 billion, much of which, according to the global authorities, was squirrelled away in private accounts and used to buy yachts, paintings and high-end real estate. Earlier this week, Malaysia put up for auction the Equanimity, a US$250 million luxury yacht, also allegedly bought by Low with 1MDB funds. They both pleaded not guilty and will face trial next year. In total, more than US$2.7 billion was misappropriated from 1MDB.

A friend of Najib's stepson Riza Aziz, Low had no official role at 1MDB but had considerable influence over its dealings and was often in contact with Najib, according to the Justice Department, U.S. authorities have said.

An attorney for Najib, Shafee Abdullah, dismissed the latest charges as "foolish".

Ng, a managing director at Goldman, and Leissner, who worked as Southeast Asia chairman and managing director at Goldman, sought on three occasions to make Low a formal client, but were rebuffed because officials in the compliance group had "concerns" about the source of the person's wealth and deemed he would not be a "suitable" client.

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