A high-ranking Malaysian official, widely believed to be former prime minister Najib Razak, has returned to the spotlight in documents filed by the United States Department of Justice (DOJ) against fugitive businessman Low Taek Jho and two ex-bankers over the 1Malaysia Development Berhad (1MDB) scandal.
The DOJ on Thursday charged Low, along with two former Goldman Sachs bankers, Ng Chong Hwa and Tim Leissner, with conspiring to launder money and violating the Foreign Corrupt Practices Act in relation to the 1MDB state investment fund.
These are the first US criminal charges in the case which spawned investigations around the world.
In two charge sheets, the DOJ described a "Malaysian Official #1" as "a Malaysian national and high-ranking official in the Malaysian government and the MOF (Ministry of Finance) from in or around at least 2009 until in or around 2018, with high-level authority to approve lMDB business decisions".
Najib, who has been arrested and hit with 38 charges - mostly linked to the alleged looting of 1MDB - headed the ministry around the same period of time, till his long-ruling coalition Barisan Nasional was ousted by the Pakatan Harapan pact during the May general election.
In 2009, he founded 1MDB, from which the DOJ said an estimated US$4.5 billion (S$6.2 billion) was misappropriated by high-level officials of the fund and their associates between 2009 and 2014.
During one exchange with former Goldman Sachs banker Tim Leissner, Low advised of the need to "suck up to" 1MDB officials, including sending "cakes", that is to say, bribes, to "madam boss", according to government filings. In e-mail correspondence, the wife of Malaysian Official #1 was referred to as "the Madam".
Najib denies any wrongdoing.
Concerns escalated in 2014 as 1MDB slid into an US$11 billion debt hole, and the intensifying public scrutiny led to a string of revelations concerning missing funds.
The issue exploded in July 2015 when the Wall Street Journal published documents showing Najib received at least US$681 million in payments to his personal bank accounts.
The DOJ then piled on the pressure by filing lawsuits to seize some US$1.7 billion in assets it said were purchased with stolen 1MDB money. As allegations mounted, Najib purged 1MDB critics from his government, curbed domestic investigations into the fund and enacted a tough new security law.
The 1MDB scandal is being investigated in at least six countries, including Singapore and Switzerland. Singapore is the first country to have indicted and jailed bankers over the scandal.
BRIBERY, MONEY LAUNDERING
The DOJ charged Ng, who was arrested in Malaysia, and Leissner with conspiracy to commit bribery and conspiracy to commit money laundering.
According to the lawsuits, Rosmah received US$30 million worth of jewellery bought with money originating from 1MDB, including a 22-carat pink diamond necklace worth US$27.3 million alone.
Ng was also indicted for conspiring to violate the internal controls at Goldman Sachs, which underwrote about US$6.5 billion in bonds issued by 1MDB, the United States government said. The investment bank earned US$600 million in fees from the bond issue.
The funds were intended "for the benefit of the Malaysian people" but more than US$2.7 billion went to kickbacks and bribes, according to the charges.
Leissner has pleaded guilty and will pay US$43.7 million in restitution for ill-gotten gains.
Whistle-blowers say Low - commonly known as Jho Low, a jet-setting Malaysian financier close to Najib but with no official positions - helped set up 1MDB and made key financial decisions.
Under one scheme involving a 2012 "Project Magnolia" bond offering by 1MDB, Low allegedly told the ex-Goldman bankers they needed to bribe officials in Malaysia and Abu Dhabi to guarantee that the transaction went through.
Hundreds of millions of dollars in bribes were subsequently paid to officials in Malaysia and Abu Dhabi. After the bond transaction was executed, more than US$500 million of the bond proceeds was misappropriated into shell companies controlled by Low, Leissner, Ng and other co-conspirators, the US government alleged.
THE WOLF OF WALL STREET
Some of the proceeds went to financing the movie The Wolf Of Wall Street, a 2013 Oscar-nominated film about Jordan Belfort, a corrupt stockbroker who was sent to prison for fraud.
In one of the charge sheets, a shell company owned and controlled by a "close relative" of Malaysian Official #1 was accused of making 11 wire transfers totalling about US$60 million roughly around the period of June 20, 2012, and Nov 20, 2012, to a bank account in Los Angeles owned and controlled by a "US Motion Picture Company #1", which was owned in part by the "close relative", to assist in the production of the film.
The film, starring Leonardo DiCaprio, was produced by Red Granite Pictures, which was co-founded by Najib's stepson, Riza Aziz.
'CAKES' OR BRIBES
During one exchange with Leissner, Low advised of the need to "suck up to" 1MDB officials, including sending "cakes", that is to say, bribes, to "madam boss", according to government filings.
In e-mail correspondence, the wife of Malaysian Official #1 was referred to as "the Madam".
The DOJ said Low asked for money to be transferred from a shell company to an account owned by another company incorporated in the British Virgin Islands (BVI) to "settle madam cakes 2".
The charge sheets also said Leissner was involved in the wiring of about US$1.3 million to a New York jeweller to pay for jewellery for the wife of Malaysian Official # 1.
Najib's wife, Rosmah Mansor, was formally charged with 17 offences, including money laundering, early last month as Malaysian investigators widened their probe into the 1MDB corruption scandal. She pleaded not guilty to all charges.
US$27 M PINK DIAMOND NECKLACE
Federal prosecutors in Los Angeles have also filed multiple civil suits to recoup assets bought with some of the money allegedly stolen from 1MDB.
According to those lawsuits, Rosmah received US$30 million worth of jewellery bought with money originating from 1MDB, including a 22-carat pink diamond necklace worth US$27.3 million alone.
One charge sheet said a high-end New York jeweller met Low, Malaysian Official #1 and the wife of Malaysian Official #1 at a hotel in New York on or about Sept 28, 2013, at Low's request, to show a pink diamond necklace that the jeweller had designed for the official's wife.
Around three weeks earlier, the pink diamond necklace was purchased for US$27.3 million, using funds sent from a shell company beneficially owned and controlled by Low and other co-conspirators, according to the charge sheet.
On or about Oct 10, 2014, Low, Leissner and others caused some US$4.1 million to be transferred via wire from the bank account of the BVI company to the US bank account of the New York jeweller, in part "to pay for certain gold jewellery for the wife of Malaysian Official #1", it added.
In May, cash, jewellery and designer handbags worth over US$270 million were seized from properties in Kuala Lumpur linked to the Najib and Rosmah.