7:41am PT by Eriq Gardner
Justice Department Brings Criminal Charges in 1MDB Scandal
The U.S. government has brought criminal charges against Jho Low and two bankers for the looting of the Malaysian public wealth fund called 1 Malaysian Development Berhad (1MDB). The defendants are being accused of conspiring to launder billions of dollars and to violate the Foreign Corrupt Practices Act with one of the bankers, Tim Leissner, pleading guilty to a conspiracy charge and agreeing to pay $43.7 million as a result of his crimes.
The move, announced Thursday by the Justice Department, comes more than two years after the U.S. brought its largest ever forfeiture action over $1 billion worth of assets tied to embezzlement and diversion of 1MDB funds. The government targeted profits on the Oscar-nominated film The Wolf of Wall Street; a massive song catalog; Beverly Hills and New York City real estate; artwork by Van Gogh and Claude Monet; and a Bombardier jet, among other assets.
Low, said by the government to be instrumental in the corruption, ingratiated himself into Hollywood circles with lavish parties attended by stars such as Leonardo DiCaprio and a friendship with Riza Aziz, co-founder of Red Granite Pictures, which was the financier of Wolf of Wall Street, Dumb and Dumber To and other films. Red Granite previously made a $60 million deal with the government to settle claims. No one from Red Granite is explicitly named in the indictment, but there appears to be a nod to Aziz being a "co-conspirator."
Low is still at large and is also facing charges in Malaysia. According to local papers, he has been attempting to work out an immunity agreement there.
The other charged banker is Ng Chong Hwa, known as Roger Ng, who was arrested Thursday in Malaysia.
"As part of the scheme, and as alleged in court filings, Low, Ng, Leissner, and others conspired to bribe government officials in Malaysia, including at 1MDB, and Abu Dhabi to obtain and retain lucrative business for the Financial Institution, including the 2012 and 2013 bond deals," stated a press release. "They also allegedly conspired to launder the proceeds of their criminal conduct through the U.S. financial system by purchasing, among other things, 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."
Low is being represented by attorneys Michael Kim and Robin Rathmell.
A spokesperson for Low, through his legal team, said he maintains his innocence and commented, "As noted in the indictment today, Mr. Low held no formal position at 1MDB, nor was he ever employed by Goldman Sachs, or the Governments of Malaysia or Abu Dhabi. Furthermore, the bond offerings detailed in the indictment were undertaken openly and lawfully between experienced, well-regulated financial institutions and government entities. The U.S. Department of Justice specifically states that the charges in the indictment are allegations, and that Mr. Low is presumed innocent unless and until proven guilty. Mr. Low simply asks that the public keep an open mind regarding this case until all of the evidence comes to light, which he believes will vindicate him."