How could billions of dollars meant for economic development find its way past bank watchdogs and end up paying for paintings, mansions and a stake in a Hollywood movie?

It starts, according to U.S. prosecutors, with a Malaysian financier named Low Taek Jho, who calls his Goldman Sachs Inc. banker “Bro” and parties in Las Vegas with Leonardo DiCaprio.

A series of U.S. Justice Department civil filings on Wednesday detail for the first time what allegedly happened after Malaysia launched the billion-dollar state fund 1MDB. Jho Low, as he’s known, has had ties to 1MDB, which he’s described to newspapers as informal consulting work that didn’t break any laws.

Instead, the complaints say Low set up shell companies to collect proceeds from 1MDB and ultimately arranged the withdrawal of tens of millions of dollars for payments to Malaysian government officials and for his own lavish spending.

In the process, prosecutors seemed to support claims by opposition leaders that Prime Minister Najib Razak got hundreds of millions of dollars in diverted funds. Prosecutors give an anonymous description of a Malaysian official who controlled accounts that received such amounts. The description matches Najib, who has previously acknowledged receiving almost $700 million in his personal accounts.

Jet, Paintings

The unnamed official isn’t accused of doing anything wrong and Najib, separately, has consistently denied wrongdoing.

No individual cited by the government was charged. Instead, the U.S. filed complaints naming assets it intends to seize, including luxury properties, paintings, a jet and royalties from a movie, as the actual defendants.

To read about an unauthorized reference letter for Jho Low that got a Goldman Sachs banker suspended, click here.

Malaysia’s government said it will cooperate with lawful investigations of local companies or its citizens. “As the prime minister has always maintained, if any wrongdoing is proven, the law will be enforced without exception,” Najib’s press secretary Tengku Sariffuddin said in a statement on Thursday.

At the center of the alleged web of transfers that drained the fund and fooled global banks is Low, 34. In recent years Low has attracted attention as a zelig of high living -- confidante of the prime minister’s family, buyer of rare paintings, companion to Paris Hilton. Prosecutors portray him as a puppet master with a frat boy sensibility.

Low’s E-mail

“Bro, here is outline of the issues I would like to discuss,” Low wrote in an e-mail to an unnamed Goldman Sachs employee in March 2009, just as the fund was about to relaunch with help from the bank. In the same e-mail, Low writes “there is also the issue of transparency and will the money go towards portfolio investments or be used to buy strategic stakes in companies?”

Low has previously denied any wrongdoing. Neither Low nor any of the other individuals mentioned by name or otherwise alluded to are defendants in the civil forfeiture complaints.

Seychelles Company

Transparency, or the lack thereof, emerges as a consistent theme throughout the 1MDB saga. Two months after writing that e-mail, prosecutors say, Low established a Seychelles company called Good Star Limited, of which the sole director was listed as Smart Power. Smart Power, in turn, was controlled by Low.

In September 2009, 1MDB officials met in Kuala Lumpur with the fund’s board of directors to propose a $1 billion investment in a joint venture with an oil exploration company, PetroSaudi. Before agreeing, the board asked 1MDB’s management to use an outside expert to assess the value of PetroSaudi’s assets and to find out if PetroSaudi could match 1MDB’s money with a comparable investment in the joint venture.

A week later, 1MDB’s board and top managers planned to meet again, according to the civil suit. Prior to the meeting, Low reached out to Najib directly, speaking with him by phone, the filings said. Low attended the meeting, and the investment was approved.

PetroSaudi Investment

According to the agreement, the Malaysian fund would transfer the $1 billion to the joint venture bank account at BSI Bank. Unbeknownst to the 1MDB board, the deal also called for the venture to pay back a $700 million loan from PetroSaudi a few days after the $1 billion investment, the U.S. complaints said. The only problem: PetroSaudi never made such a loan, according to the filings.

Instead, senior managers at 1MDB directed Deutsche Bank Malaysia to transfer $300 million to a Swiss account held in the name of the 1MDB-PetroSaudi joint venture and $700 million to another Swiss account on behalf of Good Star, Low’s company.

BSI has said it will cooperate with authorities. PetroSaudi did not respond immediately to an e-mailed request for comment.

The Justice Department complaints say that 1MDB officials deceived Deutsche Bank about the $700 million transfer, representing that Good Star was owned by PetroSaudi when in fact it was not. The money went to Low.

Fund Raising

Deutsche Bank, which like PetroSaudi has not been accused of any wrongdoing, declined to comment.

The filings also highlight the role of Goldman Sachs in the 1MDB scandal.

In addition to Low’s “bro” e-mail to a Goldman employee related to plans for the 2009 relaunch of 1MDB, the complaints describe Goldman’s role in raising billions of dollars for the fund in 2012 and 2013. Goldman’s fundraising efforts were dubbed “project Magnolia,” “project Maximus” and “project Catalyze.”

The complaints note the “boilerplate language” that Goldman used in its circulars to promote the bond sales didn’t include the possibility that some of the money would be be paid to individuals associated with the fund or the Malaysian official believed to be the prime minister.

‘No Visibility’

According to Michael DuVally, a Goldman spokesman, “We helped raise money for a sovereign wealth fund that was designed to invest in Malaysia. We had no visibility into whether some of those funds may have been subsequently diverted to other purposes.”

The scheme, which is the subject of inquiries in Singapore, Switzerland, Luxembourg and Malaysia, hinged on a collusive relationship between officials in charge of 1MDB and Low, the complaints said. Low helped Najib’s stepson launch his career as a movie mogul by supplying the funding for the hit movie “The Wolf of Wall Street,” it said.

It also relied on the perpetrators’ ability to create shell companies whose titles mimicked the names of legitimate businesses, prosecutors said. For example, they said, 1MDB funneled more than $1 billion in 2012 to a company called Blackstone Asia Real Estate Partners, a shell company owned by a friend of Low’s that has nothing to do with the Blackstone Group, a private equity group listed on the New York Stock Exchange.

Singapore Account

The Blackstone that purportedly benefited from 1MDB funds was controlled by Eric Tan, described in the complaints as Malaysian and a “friend and associate” of Low. 1MDB in 2012 raised funds in two bond offerings through Goldman Sachs, and more than $1 billion of the $1.367 billion that was misappropriated from the sales wound up in Tan’s Blackstone account in Singapore.

According to the Justice Department filings, Tan’s only connection to 1MDB was his relationship with Low. Efforts to contact Tan were unsuccessful.

Shortly after receiving the money, Blackstone transferred at least $30 million to an account owned by the unnamed Malaysian government official cited in the complaints, whose description matches that of Najib. The premier until a few months ago served as chairman of 1MDB’s advisory board.

Najib has previously acknowledged receiving almost $700 million in his personal bank accounts before the 2013 general election. He said the money was a personal donation from the Saudi Arabian royal family and most of the money was later returned. He was cleared by the country’s attorney-general of any graft over the case.