Ex-Goldman banker forfeits $43 million in 1MDB guilty plea
Thursday, November 1, 2018 at 10:34AM
Richard L. Cassin in 1 Malaysia Development, Goldman Sachs, Malaysia

The former chairman of Goldman Sachs in Southeast Asia pleaded guilty to FCPA and money laundering conspiracies in connection with a plot to loot the Malaysian sovereign wealth fund 1MDB.

Tim Leissner, 48, was charged in a two-count criminal information (pdf) unsealed Thursday in federal court in New York.

He pleaded guilty to conspiring to launder money and violate the FCPA.

The DOJ said he bribed "various Malaysian and Abu Dhabi officials" and circumvented Goldman's internal accounting controls.

Leissner was ordered to forfeit $43.7 million as part of his plea deal.

No sentencing date was announced. FCPA-related charges are punishable by up to five years in prison and money-laundering conspiracies by up to 20 years.

The DOJ also unsealed a three-count indictment (pdf) Thursday against another former Goldman managing director who allegedly helped Leissner.

Ng Chong Hwa, 51, also known as Roger Ng, was charged with conspiring to violate the FCPA and launder money.

Ng circumvented Goldman's internal accounting controls, the DOJ said.

Goldman Sachs underwrote more than $6 billion in bonds issued by 1MDB in three separate bond offerings in 2012 and 2013 while Ng was a managing director.

Ng was arrested Thursday in Malaysia "pursuant to a provisional arrest warrant issued at the request of the United States," the DOJ said.

The indictment also charged Low Taek Jho, 36, also known as Jho Low, a Malaysian businessman allegedly at the center of the plot to steal billions of dollars from 1MBD, formally known as 1Malaysia Development Berhad.

Low was charged with conspiring to launder money and violate the FCPA by paying bribes to Malaysian and Abu Dhabi officials.

He's still at large, the DOJ said.

Leissner resigned from Goldman Sachs in February 2016.

He's married to fashion designer and reality TV star Kimora Lee Simmons. Her television show, “Kimora: Life in the Fab Lane,” aired from 2007 to 2011 on the Style Network.

The DOJ alleged that Low, Ng, Leissner, and others conspired to bribe officials at 1MDB and in Abu Dhabi to win business for Goldman, including the 2012 and 2013 bond deals. They allegedly stole the proceeds from the  bond deals and used some of the money to take kickbacks and pay bribes to officials at 1MDB and in Abu Dhabi.

The DOJ said they conspired to launder the money in the United States by buying "luxury residential real estate in New York City and elsewhere, and artwork from a New York-based auction house, and by funding major Hollywood films," including the Wolf of Wall Street.

From a bond deal that closed in March 2013, they allegedly diverted more than $1 billion.

They laundered the money "at Low’s direction" by transfers "to bank accounts in the name of entities beneficially owned and controlled by Low, Leissner, and others, including 1MDB officials," according to the DOJ.

Low allegedly used $137 million from the stolen money to buy "art at a high-end art auction house in New York, New York."

More than $4 million from the deal went to a bank account beneficially owned by a relative of Ng, the DOJ said.

In an online chat between Low and Leissner in June 2014, they talked about the need to “suck up to” a 1MDB official and to send “cakes” to a Malaysian official's wife.

A few months later, the DOJ said, "a bank account owned and controlled by Leissner and his relative was used to transfer approximately $4.1 million to a high-end New York jeweler, in part, to pay for gold jewelry" for the official's wife.

In Malaysia earlier this year, police charged former Prime Minister Najib Razak and his wife with laundering money looted from 1MDB.

During raids on the couple's houses and condos, Malaysian police recovered $273 million worth of jewelry, handbags, and other valuables.

Police also seized cash in 26 currencies with a total value of $28.6 million.

In earlier court filings, the DOJ alleged that more than $4.5 billion was looted from 1MDB from 2009 through 2015 "by high-level officials" of the fund and their associates. Najib wasn't named. He was chairman of 1MDB while he was prime minister.

Najib's ruling coalition lost power in elections in May.

The DOJ has already filed forfeiture actions against nearly $1.7 billion in assets linked to 1MDB.

In Singapore, authorities in late 2016 barred Leissner from working in the banking sector for ten years.

The Monetary Authority of Singapore said he issued an unauthorized reference letter to a bank in Luxembourg in June 2015, using Goldman Sachs letterhead.

Leissner's letter said "Goldman Sachs had conducted due diligence on Mr Low Taek Jho and his family, and had not detected any money laundering concerns with respect to Mr Low or his family."

"These statements were untrue and were made by Mr Leissner without Goldman Sachs’ knowledge or consent," MAS said.

The DOJ said Thursday it had help in the case from the Singapore police and Attorney General's office, and from prosecutors and police in Malaysia, Switzerland, and Luxembourg.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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