PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - The US Securities and Exchange Commission (SEC) has named former Malaysian prime minister Najib Razak as a recipient of kickbacks from bonds raised by former Goldman Sachs executive, Tim Leissner, for troubled state investment firm 1MDB.
News portal Malaysiakini reported that the SEC said this in a "cease and desist order" for proceedings against Leissner, after he made a settlement offer for the charges against him, which includes a permanent ban from the securities industry.
In detailing the background of the case, the SEC said that Leissner had helped to raise US$6.5 billion (S$8.81 billion) for 1Malaysia Development Berhad (1MDB) under the guise of supporting projects meant to benefit Malaysians.
"Leissner and others instead planned and executed a scheme to misappropriate more than US$2.7 billion and distribute the money as bribes and kickbacks to government officials in Malaysia and Abu Dhabi including but not limited to Najib as well as to other participants in the scheme and their families, including Leissner," said the SEC.
The SEC said Leissner was especially aware that Najib would be benefiting from a 2012 bond-raising exercise dubbed "Project Maximus".
"Leissner also knew at the time that Najib and government officials from Abu Dhabi and 1MDB officials would receive money from the proceeds of Project Maximus that passed through various shell companies beneficially owned and controlled by himself, fugitive businessman Jho Low and others."
It said that a close relative of Najib also received misappropriated funds while Low - also known as Low Taek Jho - is currently being sought by both American and Malaysian authorities for alleged criminal deals linked to 1MDB.
According to Malaysiakini, Project Maximus was the second of two bonds issued by 1MDB in 2012, which is called the Aabar BVI phase.
Quoting the US Department of Justice (DOJ), the portal said Najib received US$30 million under this phase and a further US$681 million during the Tanore phase in 2013.
The Tanore phase is also known as Project Catalyze, which is mentioned by the SEC but without reference to Najib.
However, the SEC said that after Project Catalyze's conclusion, there were additional transactions which resulted in kickbacks including "transferring approximately US$1.3 million to the account of a New York jeweller to pay for jewellery for the spouse of Najib".
This is in reference to 27 different 18-carat gold necklaces and bracelets Low had allegedly bought for Najib's wife Rosmah Mansor.
Najib is currently on trial for charges relating to the Tanore phase of the 1MDB scandal.