SINGAPORE: The US Justice Department filed charges on Thursday (Nov 1) against Low Taek Jho, better known as Jho Low, and two Goldman Sachs bankers accused of laundering billions embezzled from Malaysian state fund 1Malaysia Development Berhad (1MDB).
An estimated US$4.5 billion was misappropriated from 1MDB, the Justice Department had alleged.
While US prosecutors have previously filed civil suits to seize assets allegedly bought with some of the stolen funds, these are the first criminal charges the US has brought against individuals in the case.
One of the former Goldman bankers, Roger Ng, 51, was arrested in Malaysia on Thursday while another, Tim Leissner, 48, has pleaded guilty to conspiracy to launder money and conspiracy to violate the Foreign Corrupt Practices Act, and agreed to forfeit US$43.7 million.
The Justice Department's statement and charge sheets detail the outlines of the purported scheme and mention numerous co-conspirators given anonymised labels such as 1MDB official #1 and Abu Dhabi Official #1, in addition to Malaysian Official #1, widely believed to be former prime minister Najib Razak.
What are the allegations against Low, 36, and those linked to 1MDB in the documents? Here are some of the highlights:
Low and Ng are charged with conspiring to launder billions of dollars embezzled from 1MDB and conspiring to violate the US' Foreign Corrupt Practices Act (FCPA) by paying bribes to various Malaysian and Abu Dhabi officials.
They also allegedly conspired to launder the proceeds of their criminal conduct through the US financial system by purchasing, among other things, luxury residential real estate and artwork from a New York-based auction house, and by funding major Hollywood films.
US$6 BILLION BONDS
Ng is also charged with conspiring to violate the FCPA by circumventing the internal accounting controls of Goldman Sachs, which underwrote more than US$6 billion in bonds issued by 1MDB in three separate bond offerings in 2012 and 2013.
The bond transactions known internally at the bank as Project Magnolia, Project Maximus and Project Catalyze earned Goldman Sachs US$600 million in fees and revenues, the documents said.
HUNDREDS OF MILLIONS IN BRIBES
To ensure that Goldman Sachs obtained business from 1MDB, Low, Ng, Leissner and other conspirators allegedly promised and paid hundreds of millions of dollars in bribes to officials in Malaysia and in Abu Dhabi.
"In one instance, as alleged in court filings, in connection with Project Magnolia, Low told one 1MDB official that he would "(g)ive (the official a) big present" when the transaction closed", said a statement by the Justice Department.
WOLF OF WALL STREET
Also mentioned as a beneficiary of US$500 million in fund proceeds which were misappropriated - "a close relative of Malaysian Official #1".
The money was later used "by the relative's US motion picture company to assist in the production of the film The Wolf of Wall Street", the statement said. The Wolf of Wall Street, starring Leonardo Dicaprio, was produced by Red Granite, which was co-founded by Najib's stepson, Riza Aziz.
The filing said that Low and Leissner paid for jewellery for Najib's wife Rosmah Mansor, which they referred to as "cakes".
"For example, as alleged, in an online chat between Low and Leissner in June 2014, Low and Leissner discussed the need to 'suck up to' a 1MDB official and to send 'cakes' to a person believed to be the wife of Malaysian Official #1."
"A few months after this chat, a bank account owned and controlled by Leissner and his relative was used to transfer approximately US$4.1 million to a high-end New York jeweller, in part, to pay for gold jewellery for the wife of Malaysian Official #1."
1MDB OFFICIAL #1, #2
More people are implicated in the charge sheets but are not named as they are not the ones being indicted.
They are referred to as 1MDB Official #1, 1MDB Official #2, 1MDB Official #3, Abu Dhabi Official #1 and so on.
Also mentioned is a pink diamond worth US$27.3 million that was earlier listed in civil suits to seize assets bought with 1MDB funds.
"On or about Sep 28, 2013, at Low's request, a high-end New York jeweller met Low, Malaysian Official #1 and the wife of Malaysian Official #1 at a hotel in New York to show a pink diamond necklace that (the jeweller) had designed for Malaysian Official #1's wife.
"Approximately three weeks earlier, the pink diamond necklace was purchased using approximately US$27.3 million, which funds were sent from a shell company beneficially owned and controlled by Low and other co-conspirators."
Najib has thus far maintained that the jewel was a gift from an Abu Dhabi prince.