Tim Leissner, former chairman of Southeast Asia for Goldman Sachs Group Inc. departs from federal court in the Brooklyn borough of New York, U.S., on Tuesday, Feb. 15, 2022. - Jeenah Moon/Bloomberg
NEW YORK: Senior executives at Goldman Sachs Group Inc. knew that financier Jho Low was involved in transactions related to Malaysia’s 1MDB fund, former star banker Tim Leissner testified.
Leissner, who took the stand for the first time Wednesday as the U.S. government’s key witness in the federal bribery trial of his former subordinate, Roger Ng, described his role in the multibillion-dollar scandal. He told jurors in a Brooklyn, New York, courtroom that he and Ng "and our colleagues knew that Jho Low was the key decision maker, so therefore we had to include Jho Low as well” in all major aspects of the lucrative 1MDB transactions.
And he said that while he and Ng concealed from Goldman compliance officials Low’s efforts and the bribes they paid to get the business, other Goldman colleagues knew about Low’s involvement. Leissner, 52, named for the jury his own boss at the time, Michael Evans, then Asia chairman, and several other former executives of the bank.
Leissner said Evans went with him to visit 1MDB executives after Goldman earned $220mil in the first bond transaction, known as Magnolia, and that Evans thanked the chief executive officer of 1MDB at the time for using Goldman.
"Don’t thank me,” Leissner said the CEO responded. "Thank Jho Low.” Leissner continued: "So Mike knew from that moment” and added, "Mike asked me during Magnolia if Jho was involved and I lied outright and I said no.”
He also named Andrea Vella, a former co-head of investment banking in Asia, saying he and Vella discussed Low’s role as a key decision maker in the 1MDB transactions.
"I trusted him and he trusted me, and it was one of those things crucial to making transactions happen,” he testified.
He told the jury former executives Toby Watson and John Donne also knew Low was involved.
Michael Evans, now president of Alibaba Group, didn’t immediately respond to an email sent after business hours seeking comment on Leissner’s testimony.
Maeve DuVally, a spokeswoman for Goldman, declined to comment on Leissner’s testimony about his former colleagues.
"There were others at Goldman Sachs, on the business side, who we talked to about Jho’s involvement,” Leissner told the jury. He said he and Ng didn’t alert colleagues in compliance to the intermediary’s participation "because had they known, it would’ve raised red flags and stopped any transaction at Goldman Sachs.”
He said that after the deals closed, the two were hailed as "heroes” by Goldman superiors.
Leissner, who was the bank’s South-East Asia chairman, has pleaded guilty to charges stemming from the global scheme. On the stand Wednesday, he told jurors that zeal for $6.5bil in 1MDB transactions drove him and Ng to bribe foreign officials, because without them "these transactions would have never happened.”
Ng, who he said was the lead banker on the 1MDB deals, as head of investment banking in Malaysia, is charged with conspiring with Leissner to launder money and violate U.S. anti-bribery laws. He is the only former Goldman banker to go on trial in the scandal.
Leissner told the jury he was "best friends” with Ng and that they worked together to deceive Goldman superiors about bribes paid out in the scam, which prosecutors say Low hatched. He said Low, the high-flying Malaysian financier who was also charged in the scheme, had decision-making power at 1MDB and that Leissner and Ng decided the chance to get a piece of the 1MDB business -- which he called the largest set of deals in Goldman’s history -- and the kickbacks they got made it worth the risk.
Leissner testified that Low, who is a fugitive, was a critical player because of his close relationship with Najib Razak, then Malaysia’s prime minister, and with officials in Abu Dhabi, who provided a crucial guarantee for the bond transactions.
"The actual success of these transactions relied upon bribes and kickbacks being paid,” he told the court.
It has been almost four years since Leissner pleaded guilty to his role in the fraud that stretched from Asia to Wall Street. The 1MDB affair included investigations in Asia, the U.S. and Europe and led to the ouster of Najib in 2018. Authorities spent years tracking about $4.5bil that was allegedly siphoned from 1MDB and flowed into high-end art, real estate and a super yacht and helped fund the hit movie "The Wolf of Wall Street,” which chronicled an earlier era of financial crimes.
Prosecutors claim Ng conspired to circumvent Goldman’s internal controls and engaged in the money-laundering plot with Leissner, who they say paid him $35 million to take part in the scheme. Ng’s lawyers have argued that he played no role in it and that Leissner misled Goldman compliance officials about Low’s involvement in the 1MDB bond transactions.
Leissner pleaded guilty in August 2018 to conspiring to violate U.S. anti-bribery laws and launder money. He admitted to bribing officials in Malaysia and the United Arab Emirates to get bond deals for Goldman. He was ordered to forfeit $44 million.
In opening statements on Monday, Ng’s lawyer Marc Agnifilo assailed Leissner’s credibility and argued he was a "double bigamist” who was testifying for the U.S. only to save himself.
Goldman Sachs in 2020 agreed to pay more than $5bil, including a record $2.3bil fine in the U.S., and entered its first-ever guilty plea for its role in the scandal. The bank got a deferred-prosecution agreement while its Malaysian unit pleaded guilty.
Leissner faces the possibility of decades in prison when he’s sentenced this year.
The trial is in recess to accommodate a juror and will resume Tuesday with Leissner’s further testimony.
The case is U.S. v. Low Taek Jho, 18-cr-538, U.S. District Court, Eastern District of New York (Brooklyn). - Bloomberg
