2 Nov 2018

Ex-Goldman bankers and financier face US charges

5:51 am on 2 November 2018

Two former Goldman Sachs bankers and Malaysian financier Jho Low have been hit with US criminal charges in connection with one of the world's biggest financial scandals.

Jho Low in New York in 2014.

Photo: AFP / Getty Images

The Department of Justice alleges the men participated in a scheme that stole billions of dollars from Malaysia's development fund, 1MDB.

One former Goldman banker pleaded guilty, the department said.

The other banker has been arrested, while Mr Low remains at large.

Mr Low has previously denied charges filed in Malaysia, adding that it would be "impossible" for him to receive a fair trial there.

The BBC has contacted Goldman Sachs for comment. The company, which earned $600m in fees stemming from its work with 1MDB, has in the past denied wrongdoing and said it was co-operating with the investigation.

These are reportedly the first US criminal charges to surface in the 1MDB scandal. Authorities say billions of dollars were embezzled from the state fund to buy art, property, a private jet - and even to help finance the Wolf of Wall Street film starring Leonardo DiCaprio.

The scandal has prompted investigations around the world and played a role in the election defeat earlier this year of Malaysia's former prime minister, Najib Razak, who is accused of pocketing $US700m from the fund he set up.

He has since been charged with corruption, abuse of power and criminal breach of trust in Malaysia. His wife, Rosmah Mansor, has been charged with money laundering. Both deny any wrongdoing.

US authorities have previously filed civil suits aimed at recovering luxury goods, cash and other items allegedly purchased with money from the fund.

New charges

In this case, prosecutors say former bankers Tim Leissner and Roger Ng worked with Mr Low to bribe government officials to win 1MDB business for Goldman Sachs.

They worked on three bond offerings in 2012 and 2013 that raised about $6.5bn for the fund, the indictment says.

The money was supposed to support development projects, but prosecutors say the three men "conspired to launder" more than $2.7bn through the US financial system, and used this money to pay bribes and "for the personal benefit of themselves and their relatives".

Mr Low, who was charged earlier in Malaysia, has repeatedly declared his innocence. He has called the Malaysian charges political.

Mr Leissner, who served as Goldman's South East Asia chairman and a participating managing director, has pleaded guilty to conspiring to launder money and violate US anti-bribery laws.

Mr Leissner, who left Goldman in February 2016, has been ordered to forfeit $43.7m.

Mr Ng was a managing director at Goldman until his departure in May 2014. He was arrested in Malaysia on Thursday. The BBC has not yet been able to contact a lawyer representing him.