Saturday, November 3, 2018

DoJ Move in for the Kill

The US Department of Justice announced Thursday that they have indicted former Goldman Sachs bankers Tim Leissner and his deputy, Roger Ng, and alleged 1MDB mastermind Low Taek Jho (left) on criminal charges. 

And Andrea Vella (right) who led Goldman’s Asia investment-banking operations was placed on leave on the same day – two weeks after he was stripped of his management responsibilities. He wasn’t charged with wrongdoing but matches the DoJ’s filing description of an unidentified co-conspirator – he supposedly knew bribes were being paid and even helped Leissner get around Goldman’s internal compliance officials. 

Goldman underwrote three bond sales for 1MDB, code-named Projects Magnolia, Maximus and Catalyze, according to the indictments. More than $2.7 billion of the approximately $6.5 billion raised was diverted into accounts controlled by Jho Low, Leissner and others, according to prosecutors. 

The 3-count criminal indictment alleges Goldman bankers bribed government officials to get the bond deals, controlled offshore accounts where the stolen money was funnelled and helped launder the proceeds. 

The Wall Street giant was paid nearly $600 million in fees from 1MDB for the deals, making the investment fund one of Goldman’s most profitable clients in the world in those years. Senior officials including former Chief Executive Lloyd Blankfein and President Gary Cohn had previously praised the bankers for their work. 

According to the Financial Times, in a filing to the Securities and Exchange Commission on Friday, Goldman estimated that possible losses related to litigation proceedings could run as high as $1.8 billion above their total reserves for such matters. 

Anyway, this is a marked escalation of the DoJ’s previous kleptocracy action over 1MDB – previously, the culprits had confidently claimed that the scandal was not criminal in nature. 

Forty-eight-year-old Leissner (left) had already admitted guilt – and he is cooperating with investigators. Details included in Thursday’s indictment suggest he had provided evidence against others. Leissner will forfeit $43.7 million as part of his plea deal and is scheduled to be sentenced in January. 

(This case represents the biggest black eye for a Goldman partner since 1989, when executive Robert Freeman was led off the trading floor in handcuffs, later convicted of a crime related to insider trading). 

Fifty-one-year-old Ng (right) was arrested here in Malaysia on Thursday and will be shipped to the US to face charges there. 

The elusive Jho Low, 36, remains at large. 

Needless to say, the ground beneath former prime minister Najib Razak’s feet trembled and quavered and shook.

The indictment must surely be of real worry and alarm to Najib and even his family members – as they have been strongly alluded to as “Malaysian Official 1”, MO1’s wife, and MO1’s “relative” who co-founded a movie production firm in the US, as being involved in the alleged corruption or as co-conspirators. 

Interestingly, Jho Low shifted his position on the matter – he’s now insisting he is innocent until proven guilty – when his previous statements used to detail how there had not been any criminal proceedings against him in any jurisdictions. 

The noose has really tightened around Jho Low. And Najib Razak too. 

You guys are dead meat!

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