NEW YORK: The US Justice Department’s first charges against individuals related to the pillaging of the Malaysia investment fund known as 1MDB offers several new insights into the global, multibillion-dollar scandal:
Bribes and kickbacks
: Tim Leissner, then of Goldman Sachs, and others offered bribes to government officials in Malaysia and Abu Dhabi in order to help the bank win the deal to raise money for the development fund, known formally as 1Malaysia Development Bhd.
Leissner was a top Goldman Sachs banker in Southeast Asia whose guilty plea for money laundering and foreign bribery was unsealed on Thursday.
Scheme started in 2009: Starting then, Leissner and Ng hid the involvement of the Malaysian financier Low Taek Jho, known as Jho Low, to all but a select few within Goldman Sachs, according to court filings.
They knew that if Low’s involvement was disclosed fully within the bank, the compliance and legal departments would investigate the relationship with Low, thereby jeopardizing the deal, the filings say.
: More money flowed to Leissner than was previously known. Between June 2012 and October 2014, more than $200 million of the proceeds of 1MDB bonds and other 1MDB business was transferred, at Jho Low’s direction, to accounts controlled by Leissner and a close relative in Hong Kong.
Why Goldman raised money via bonds
: Leissner and other bank employees intentionally structured 1MDB’s fundraising as bond deals rather than other forms of financing because they generated higher fees for the bank.
Such deals also led to higher paychecks for Leissner and others and helped to “improve the bank’s reputational standing” in the region and elsewhere.
Others at Goldman Sachs knew
: The fact that bribes and kickbacks were being paid were known by others at the bank, prosecutors said. Charging documents refer to at least one other unidentified co-conspirator at the bank.
Bling for Najib’s wife: Some of the bribes involving 1MDB funds were paid in the form of luxury goods, according to court filings. In September of 2013, Low allegedly funneled $27.3 million that was looted from 1MDB to a New York jeweler who designed a pink diamond necklace for the wife of Najib Razak, Malaysia’s then-prime minister.
A year later, Low and Leissner allegedly transferred $4.1 million to New York to pay for gold jewelry for Najib’s wife.
: Leissner tried to continue the relationship with 1MDB after Goldman Sachs had raised more than $6 billion for the fund. In 2014, for example, Leissner and Low allegedly paid bribes and kickbacks to Malaysian officials in the hope that the bank could play a leading role in a proposed initial public offering for 1MDB’s energy assets. The IPO never took place.- Bloomberg