Malaysia 1MDB scandal: bigamy, bribes and boozy parties - juicy details emerge from US trial

From allegations about bigamist bankers to bribe-taking sheikhs, former Goldman Sachs employee Roger Ng's trial in New York over his role in Malaysia's 1MDB scandal has offered a stream of juicy details since it began on Monday.

The US District Court trial of the Malaysian national is the first foreign jury hearing centred around the now-infamous plunder of billions of dollars of state funds from the Southeast Asian country.

Over the last few years, observers have closely parsed the Malaysian proceedings involving the ex-prime minister Najib Razak and others allegedly involved in the scandal.

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Still, Ng's case has been anticipated for several reasons.

For one, the 49-year-old ex-banker has been expected to provide rich anecdotes about his dealings with the looting's fugitive mastermind Jho Low - also a Malaysian.

Also likely to be scrutinised are Ng's testimony about Goldman Sachs and his former boss, Tim Leissner.

The 153-year-old Wall Street Bank in October 2020 admitted criminal wrongdoing by its Malaysian subsidiary and agreed to pay over US$5 billion to regulators around the world.

Leissner, Goldman's former Southeast Asia chairman, is also testifying in Ng's trial - as a prosecution witness.

In 2018, Leissner pled guilty to breaching US anti-money-laundering and bribery laws. He faces a lengthy jail term when he is sentenced later this year.

Of interest will be what Leissner says about his and Ng's dealing with Low and their knowledge of just how much other key players knew about the scale of the fraud.

In its admission before a Brooklyn courtroom, Goldman admitted that its employees took part in a scheme to pay some US$1 billion in bribes to foreign officials. Who were the recipients? Was Najib, ousted in Malaysia's 2018 general election over his links to the scandal, one of them?

Malaysian law enforcement officials will be hoping for clues - or even crystal clear answers - to these and other questions in the coming days.

Here are four key things you need to know about the former banker's ongoing trial and its implications.

Ng is on trial for violating the Foreign Corrupt Practices Act by bribing foreign officials, circumventing accounting controls under the FCPA and money laundering.

He was indicted in the US in 2018 and was extradited from Malaysia in May 2019. He faces separate charges in the Southeast Asian nation under its Capital Markets and Services Act, and is expected to stand trial there once his US legal battle is over.

His current trial in the US District Court for the Eastern District of New York is taking place after substantial delays due to the Covid-19 pandemic.

US Justice Department documents detail Ng's key role in bringing Low, the high-flying businessman, into Goldman Sachs' radar some time in 2009.

At the time, the Terengganu Investment Authority, an investment body for one of Malaysia's 13 states, had just been taken over by Najib's federal government.

Prosecutors say Ng, Leissner and Low conspired to bribe officials so that Goldman could arrange US$6.5 billion in bond offering for 1MDB. Ng's defence team, however, contend that "neither he nor anyone else in Goldman knew that Low had designs on committing fraud and stealing money" at that point in time in 2009.

Did Ng know anything about Low's alleged criminal intent when he became acquainted with him in 2009? According to a 126-page affidavit, the former banker is claiming that he raised the alarm bells at Goldman sometime in 2010, warning the storied Wall Street bank that to exercise "caution in accepting Low's claims at face value" and that he "did not find Low's claims to be credible".

But prosecutors have sought to suggest that Ng maintained ties with the cherubic Malaysian financier despite these red flags.

In his opening statement, US lawyer Brent Wible offered details on just how close both men were.

"Mr Ng flew with Mr Low on private jets, attended a lavish party with him in Las Vegas and met him on a yacht in the Mediterranean Sea during the 2011 Cannes Film Festival," the prosecutor was quoted as saying by The Wall Street Journal.

Much of the prosecutor's case is built around Goldman's fundraising activities for 1MDB between 2012 and 2013. Among the transactions was one code named "Project Magnolia" - a US$1.75 billion debt-financing deal to purchase a Malaysian energy company.

Some US$577 million from this deal is alleged to have been diverted from 1MDB through layers of wire transfers to hide the money trail. Wible said Ng himself received US$35 million from the scheme. "He saw an opportunity to use his position at Goldman to get rich by cheating," the prosecutor said.

Invoices for a party Low threw included a fee of half a million dollars for Leonardo DiCaprio, a US$385,773 bar tab that partly paid for 65 bottles of Cristal Champagne and US$5,000 for "model wrangling".

Ng's defence is hinged on the argument that he is being scapegoated for the actions of others, including his ex-boss Leissner. "This is a massive crime and there are lots of guilty people. [Ng is] just not one of them," Ng's lawyer Marc Agnifilo was quoted as saying at the trial.

The lawyer claimed that "Ng never stopped being a faithful Goldman employee" in contrast with Leissner who somewhere along the way "effectively stopped being a partner at Goldman and started being a criminal partner of Low."

"Tim Leissner uses people," Agnifilo told jurors on Monday in his opening statement. He said Leissner was "married to two different women at the same time, twice" and that he had an "illicit" relationship with an 1MDB executive.

Leissner bought homes "for all the women in his life" and became a "mini version" of Low, the lawyer said.

The banker married former model and clothing executive Kimora Lee Simmons in 2013.

"He blames it all on Kimora," Agnifilo said, according to Bloomberg. "Watch how many people he blames. But the blame is on Leissner and Leissner alone."

Commentators in recent days have been lapping up Leissner's testimony, which has been filled with a fair share of salacious details.

Leissner said that at a meeting in London in 2012, Low listed individuals in Malaysia and Abu Dhabi that he said would need to be bribed for a plan to raise debt for 1MDB to win approval.

An Abu Dhabi-based company was acting as a guarantor for 1MDB on the deal, Leissner said, according to a Reuters report on the trial.

That list included Najib, Malaysia's then-premier, and Sheikh Mansour, deputy prime minister of the United Arab Emirates, who Low said "wouldn't get out of bed for anything less than US$100 million," according to Leissner.

The Emirati government has thus far not commented on the testimony.

In Malaysia, opponents of Najib are hoping the New York trial of Ng will further underscore the ex-leader's culpability in the wide-ranging scam that spanned not just the US and Kuala Lumpur, but also jurisdictions such as Switzerland and Singapore.

Najib, 68, is currently out on bail after a 2020 conviction in the first of several trials he is facing over the scandal.

He was sentenced to a 12-year prison term and could be facing the prospect of spending the rest of his natural life behind bars if he is convicted in the other trials and these sentences are not overturned by appellate courts.

Notwithstanding his legal troubles, however, he has been making a political comeback after his fall from grace in 2018, when he lost in elections and was subsequently charged over his role in the scam.

The veteran politician remains a key figure in the United Malays National Organisation that is the biggest party in the coalition that currently governs Malaysia.

Tunku Mohar Tunku Mokhtar, a Malaysian political expert, suggested the airing of the 1MDB scandal in a US court was "significant" as it would put on display to ordinary Malaysians that the conspiracy spanned far and wide, and was not just contained at home.

Other analysts were less hopeful that these optics would sway Najib's ardent supporters, who are convinced by his argument that he is a victim of political revenge.

"It would appear that Najib's supposed innocence is absolute in [his supporters'] eyes," said Oh Ei Sun, a long-time Malaysian politics observer.

Oh, a former aide to Najib, said he believed the politician's backers would not be satisfied until the former leader was exculpated and "restored onto the premiership".

Additional reporting by Reuters, Bloomberg

This article originally appeared on the South China Morning Post (SCMP).

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