Former Goldman banker Ng found guilty in 1MDB fraud scheme
Bloomberg (April 8): Roger Ng, the only Goldman Sachs banker to go to trial over the global 1MDB scandal, was found guilty for his role in the epic looting of the Malaysian fund.
Ng, 49, was convicted on Friday of all three counts in the case, including conspiring to violate US anti-bribery laws and conspiring to launder money. He faces a prison term as long as 30 years but is likely to get far less time.
The verdict came after an eight-week federal trial in Brooklyn, New York, that featured startling confessions from Tim Leissner, Ng’s boss at the time. Leissner, the key witness against the former Goldman Sachs Group Inc banker, admitted to telling a raft of personal and professional lies in the multibillion-dollar plunder of 1Malaysia Development Bhd. Goldman arranged a trio of bond deals for 1MDB.
Ng showed no reaction as the the jury’s forewoman read out the verdict. On hearing it, his lawyer Marc Agnifilo hung his head.
Ng remains free on a US$20 million bond. US District Judge Margo Brodie didn’t set a sentencing date.
‘Piggy Bank’
The verdict is “a resounding victory for justice and for the people of Malaysia who are the victims of this massive scheme carried out in a frenzy of greed,” Breon Peace, the US attorney for the Eastern District of New York, said in a statement.
“The defendant and his cronies saw 1MDB not as an entity to do good” but “as a piggy bank to enrich themselves with piles of money siphoned from the fund,” Peace said.
It’s a hard-won verdict for the US in the aftermath of fraud surrounding the sovereign wealth fund, set up for Malaysian energy projects and infrastructure but used instead to line the pockets of government officials, bankers and intermediaries with an estimated US$2.7 billion. Alleged mastermind Jho Low, who was indicted with Ng, is accused of paying tens of millions of dollars in bribes to officials in Malaysia and Abu Dhabi to clinch the bond deals and of taking US$1.42 billion for himself. Proceeds from the scam were used on items including a US$200 million super-yacht and to finance “The Wolf of Wall Street”.
Low remains at large.
The case was a black mark on Goldman. In 2020, a Goldman unit admitted it had conspired to violate US anti-bribery laws, the first guilty plea ever for the firm, founded in 1869. The bank paid more than US$2.9 billion, the largest penalty of its kind in US history, and more than US$5 billion globally for its role in the scheme.
‘Brand New Territory’
Ahead of an appeal to a higher court, Agnifilo said, he would challenge the conviction before Brodie, particularly on the charge Ng conspired to violate US anti-bribery laws by circumventing Goldman’s internal accounting controls. During the trial, Agnifilo and prosecutors agreed this was the first time the charge had been considered by a federal jury.
“We’ve never been here before — it is all brand new territory,” he said after the verdict.
Agnifilo said he was “surprised” by the verdict and had expected an acquittal on all counts. Ng was charged with two counts of conspiring to violate the Foreign Corrupt Practices Act and one count of conspiring to commit money laundering.
Asked about his client’s reaction, he said Ng was “doing better than his lawyers,” adding, “He has great inner fortitude and always has.”
Ng still faces criminal charges over the 1MDB scandal in Malaysia, where his legal team hopes to negotiate a resolution. Agnifilo said Ng’s lawyers in the two nations are coordinating on how to proceed in the cases.
Juror’s Reaction
The jury of six women and six men left without speaking to reporters, but outside the courtroom a juror who declined to give his name stopped briefly when asked about the outcome.
“I have said all I have to say in the courtroom today with my verdict,” he said.
Ng was jailed for six months in Malaysia before agreeing to come to the US three years ago to face the charges in Brooklyn. Agnifilo said he had advised Ng that he would probably get a fairer trial in the US.
“I have faith in our system, because I’m from here,” Agnifilo said. “I think he still does, even though he’s not from here.”
Ng’s wife, Hwee Bin Lim, testified in his defense at the trial. Agnifilo said the verdict was “a personal disaster in the life of that family.”
Biggest Catch
Leissner, 52, was once Goldman’s Southeast Asia chairman and is the highest-ranking Goldman banker to plead guilty to the scheme to steal from 1MDB in return for more than US$60 million in kickbacks. Ng, who was Goldman’s head of investment banking in Malaysia, got US$35 million in kickbacks, prosecutors said.
Leissner is scheduled to be sentenced on July 6 and may win leniency for his cooperation with prosecutors.
Former Malaysian prime minister Najib Razak, who prosecutors said pocketed US$756 million, was sentenced to 12 years in prison after being convicted on corruption charges in Malaysia. He is free pending appeal.
Ng’s trial revealed new details of the scheme. Low hustled the stolen billions out of 1MDB immediately after each bond deal Goldman completed for the fund, according to testimony from prosecution witnesses. The FBI said those funds were then directed to co-conspirators. Among them were Najib and his stepson, who got US$238 million, including US$60 million he spent financing the film, according to the US. Jurors were shown how the scheme funded a US$23 million pink diamond necklace for Najib’s wife, as well as more than US$1 million in luxury handbags for her.
Central to the government’s case was an FBI chart showing that Leissner sent US$35 million of the booty to a shell company controlled by Ng’s wife, Lim. The FBI said she later spent US$300,000 on diamond jewelry and US$20,000 on a gold hourglass.
Low’s Spending
The panel also heard testimony about Low’s lavish spending, including more than US$3.6 million he dropped on a birthday bash in Las Vegas, which records show he paid “Wolf” star Leonardo DiCaprio US$250,000 to attend. A casino employee testified that Low wagered almost US$87 million at his resort and lost about US$26 million at baccarat. Low’s partying eventually caught the attention of bankers and authorities.
Along the way, Leissner told the jurors he created phony email accounts in which he posed as his wife to talk to his girlfriend, bought his mistress a US$10 million London home after she threatened to disclose the 1MDB fraud and was twice married to two women at the same time, both times forging divorce documents.
The US, which called 26 witnesses, argued that Ng and Leissner concealed the fraud from their superiors at Goldman, which made more than US$600 million arranging the three 1MDB bond deals in 2012 and 2013. Goldman paid Leissner at least US$12 million, while Ng got US$3 million after two of the bond deals closed, the government said.
Leissner, who pleaded guilty in 2018, spent 10 days on the witness stand, more than five of them under withering cross-examination by Agnifilo, who called him a “cunning liar”.
‘Hero’ for Goldman
The former star Goldman banker told the jury that he and Ng attended a February 2012 meeting at Low’s London home in which he said the financier charted out which Malaysian and Abu Dhabi officials would receive bribes. Low told Ng and Leissner they would also be “taken care of”, Leissner testified. After the meeting, Leissner said, he was “motivated” because he wanted to be “a hero” for Goldman, and Ng was “happy he was going to be paid some money”.
On cross-examination, Agnifilo noted that Leissner first mentioned such a chart to the FBI in 2021, almost three years after he began talking to the bureau. The defense also cited a 2010 report that said Ng raised “red flags” and gave “negative feedback” about Low and said he didn’t find the financier’s claims about his wealth “credible”. Agnifilo argued that Leissner falsely implicated Ng and lied repeatedly to gain favour with prosecutors.
The defence called only a handful of witnesses — notably Ng’s wife. Lim testified that the US$35 million infusion prosecutors called a kickback was for an unrelated transaction in China with Leissner’s former wife. The offshore entities were in Lim’s mother’s name, records show.
Prosecutors argued that emails linked to these accounts showed that while while Lim’s mother was the beneficial owner, Ng and his wife controlled the funds. Soon after investigations into 1MDB were launched in Malaysia and Singapore, Ng also deleted a series of email accounts he had used to communicate with Low and others involved in the scheme, according to the US.
The case is US v. Low Taek Jho, 18-cr-538, US District Court, Eastern District of New York (Brooklyn).
