Former Goldman Sachs banker Roger Ng pleads not guilty in Malaysia's 1MDB fraud case

Former Goldman Sachs banker Roger Ng leaving the US District Court in New York on May 6, 2019.
Former Goldman Sachs banker Roger Ng leaving the US District Court in New York on May 6, 2019.PHOTO: NYTIMES

NEW YORK (NYTIMES) - A former Goldman Sachs banker charged last year in connection with the looting of billions of dollars from a Malaysian sovereign wealth fund pleaded not guilty in a Brooklyn federal court on Monday (May 6), just hours after being flown back to the United States.

The banker, Roger Ng, had been in custody in Malaysia since he was charged with helping the country's former prime minister and others embezzle at least US$2.7 billion (S$3.7 billion) from the 1Malaysia Development Berhad fund, known as 1MDB.

The magistrate judge overseeing Ng's bail hearing, Ms Peggy Kuo of US District Court for the Eastern District of New York, said both sides were engaged in plea talks. Mr Marc Agnifilo, Ng's lawyer, disputed that characterisation after the hearing, although he left open the possibility of an agreement with prosecutors.

"Roger has pleaded not guilty and will at least consider all options available to every defendant at the inception of a case," Mr Agnifilo said.

Ng, 46, is one of two former Goldman bankers federal prosecutors have charged in the case. In August, Tim Leissner, Ng's former boss, pleaded guilty to money laundering and foreign bribery charges.

Leissner is free on bail while he waits to be sentenced. Ng was released on US$20 million bail and ordered to remain in home detention. His next court date is May 23.

The charges against both men relate to an alleged scheme by the country's former leaders to plunder 1MDB, which used Goldman's investment banking services to issue US$6 billion in bonds meant to finance infrastructure projects in the country. Instead, prosecutors say, the former prime minister Najib Razak, his family and financier Low Taek Jho, also known as Jho Low, spent a large portion of the money on jewels, jets and artwork.

 
 
 

The authorities contend that Leissner and Ng paid hundreds of millions of dollars in bribes and kickbacks to help win the bond underwriting work, which generated US$600 million in fees for Goldman. The deals also earned big bonuses for Leissner and Ng and enhanced their reputations at Goldman.

The case has prompted a serious criminal investigation for Goldman, which has said it could face a substantial fine in the US. Malaysian officials also want Goldman to pay up to US$7.5 billion in damages.

"We continue to cooperate with all relevant authorities as the process continues to move forward," Mr Michael DuVally, a Goldman spokesman, said in a statement.

Ng still faces charges in Malaysia, where he was arrested in November. Justice Department lawyers and their Malaysian counterparts agreed to bring Ng to the US after he said he would not contest an extradition proceeding, but the authorities in Malaysia called his return to the US a "temporary surrender".

Mr Tommy Thomas, the Malaysian attorney general, said Ng would be brought back to face charges after US prosecutors had completed their case.

The 1MDB scandal reached halfway around the globe and into the highest reaches of power in Malaysia. It led to Najib's downfall when he lost his re-election bid last May and was arrested by Malaysian authorities in July.

It also touched reached Hollywood: Some of the missing money helped pay for the Hollywood blockbuster The Wolf Of Wall Street, according to prosecutors.

Low, who has been accused of using some of the money to lavish gifts on celebrities, was also indicted in the US and remains at large.

Commenting on Ng's extradition to the US, a spokesman for Low said through his lawyers: "It is good that Mr Ng has been rescued from Malaysia’s inhumane prison conditions and a process controlled by a leader with a history of abusing the judicial system to destroy political opponents."

The charges against Low and Ng were announced along with the guilty plea of Leissner, who is married to model and fashion designer Kimora Lee Simmons.

The terms of Leissner's bail agreement were sealed by the court in August, and his whereabouts was not known.

Judge Margo K. Brodie of US District Court for the Eastern District of New York, who is overseeing the case, denied a request from The New York Times to unseal portions of Leissner's plea hearing that discussed the terms of his bail. But she recently granted a motion by lawyers for The Times that would allow them to appeal against that order.

Additional reporting by The Straits Times