Ex-US Justice Dept employee pleads guilty to 1MDB fraud


  • Nation
  • Saturday, 1 Dec 2018

KUALA LUMPUR (Reuters): A former U.S. Justice Department employee pleaded guilty on Friday (Nov 30) for conspiring to deceive banks about millions of dollars in foreign lobbying funds

The plea comes after he facilitated the financing of a lobbying campaign related to the U.S. investigation into the 1Malaysia Development Berhad (1MDB) scandal.

The Justice Department said in a statement that the alleged architect of the 1MDB scheme had hired George Higginbotham, who was then a senior congressional affairs specialist at the Justice Department, to help transfer tens of millions of dollars from foreign bank accounts to the United States.

Higginbotham said he had conspired to make false statements to banks about the source and purpose of the funds, and also deceived banks with fake loan and consulting documents.

The money he transferred was then used in a lobbying campaign to resolve civil and criminal matters related to the department’s investigation into the scheme to embezzle billions of dollars from 1MDB.

Higginbotham did not play a role in the investigation and failed to influence any aspect of it, the Justice Department said.

The Justice Department has alleged that an estimated $4.5bil (RM18.82bil) was misappropriated from 1MDB by high-level officials of the fund and their associates between 2009 and 2014,

Earlier this month, U.S. prosecutors unveiled criminal charges against two former Goldman Sachs bankers tied to the massive theft.

The Justice Department also filed a lawsuit to recover more than $73 million (RM305.23mil) in accounts at U.S. financial institutions that Higginbotham allegedly helped open for Malaysian businessman Jho Taek Low.

The government has alleged Low and other conspired to launder billions of dollars embezzled from 1MDB, using part of the money to influence the U.S. investigation of the bank scandal. - Reuters