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.