Ex-Goldman banker's 1MDB loot used to buy diamonds, US court told

NEW YORK • An FBI agent told a jury how he traced US$35 million (S$47.5 million) siphoned from Malaysia's 1MDB funds, diverted to a Goldman Sachs banker and used to buy a US$20,000 gold-plated hourglass and US$300,000 in diamond jewellery.

Testifying on Tuesday at the foreign-bribery trial of former Goldman Sachs banker Roger Ng, agent Sean Fern said he was able to track the funds that prosecutors say Ng received as part of a global scheme to steal billions of dollars from sovereign wealth fund 1Malaysia Development Bhd (1MDB).

As the United States begins to wrap up its case after five weeks of testimony, prosecutors called Mr Fern to describe how Malaysian financier Jho Low - the alleged mastermind of the scheme and now a fugitive in the case - drew off hundreds of millions of dollars from 1MDB bond deals to pay bribes to officials in Malaysia and Abu Dhabi, as well as kickbacks to Goldman bankers who helped him.

Goldman arranged the bond deals.

Ng is accused of conspiring with his former boss Tim Leissner and Low in the scam.

Leissner, who has pleaded guilty and testified for the government, said he earned more than US$60 million for his role in the plot, and directed that Ng be paid US$35.1 million from an account controlled by Leissner's former wife, Ms Judy Chan.

Mr Fern said he tracked how, in the weeks after the first 1MDB bond deal closed in May 2012, at least US$24.4 million was directed from Ms Chan's account to an offshore account controlled by Ng's mother-in-law, Ms Tan Kim Chin.

Two more transactions in 2013 sent US$10.7 million from accounts under Ms Chan's control to the offshore account Madam Tan controlled, he testified.

Mr Fern told the jurors that some of the 1MDB money was used to buy US$300,500 in diamond jewellery, including a six-carat ring, and a US$20,000 gold-plated hourglass.

Neither Ng's wife, Ms Lim Hwee Bin, nor her mother was charged in the case.

BLOOMBERG