1Malaysia Development Berhad scandal

Part of a series on the
History of Malaysia
Prehistoric Malaysia Prehistoric Malaysia
Early kingdoms Gangga Negara 2nd–11th century Langkasuka 2nd–14th century Chi Tu 2nd–6th century Pan Pan 3rd–5th century Kedah Tua 5th–9th century Pahang Tua 5th–15th century Melayu 7th–14th century Srivijaya 650–1275 Majapahit 1293–1500
Rise of Muslim states Kedah Sultanate 1136–present Samudera Pasai Sultanate 1267–1521 Brunei Sultanate 1368–present Malacca Sultanate 1402–1511 Sulu Sultanate 1450–1899 Pahang Sultanate 1470–1623 Aceh Sultanate 1496–1903 Pattani Sultanate 1516– 1902 Johor Sultanate 1528–present Sarawak Sultanate 1599–1641 Besut Kingdom 1780–1899 Setul Kingdom 1808–1916 Reman Kingdom 1810–1902 Kubang Pasu Kingdom 1839–1864
Colonial era Portuguese Malacca 1511–1641 Dutch–Portuguese War 1601–1661 Dutch Malacca 1641–1824 Pahang Kingdom 1770–1881 Straits Settlements 1786–1946 Siamese invasion of Kedah 1821–1826 Anglo-Dutch Treaty 1824 Burney Treaty 1826 Naning War 1831–1832 Kingdom of Sarawak 1841–1946 Crown Colony of Labuan 1848–1946 Pahang Civil War 1857–1863 Larut Wars 1861–1874 Klang War 1867–1874 Pangkor Treaty 1874 Perak War 1875–1876 British Malaya / Borneo 1874–1946 Jementah Civil War 1879 North Borneo 1882–1946 Pahang Uprising 1891–1895 Federated Malay States 1895–1946 Anglo-Siamese Treaty 1909 Unfederated Malay States 1909–1946 Battle of Penang 1914 Kelantan rebellion 1915
World War II Japanese occupation of Malaya / Borneo 1941–1945 Malayan campaign 1941–1942 Bornean Campaign 1941–1942 Battle of Muar 1942 Parit Sulong Massacre 1942 Battle of Singapore 1942 Sook Ching 1942 Syburi 1942 Sandakan Death Marches 1942–1945 Si Rat Malai 1943–1945 Jesselton revolt 1943–1944
Formative era BMA of Malaya/Borneo 1945–1946 Crown Colony of N. Borneo 1946–1963 Crown Colony of Sarawak 1946–1963 Anti-cession movement 1946–1963 Malayan Union 1946–1948 Federation of Malaya 1948–1963 Malayan Emergency 1948–1960 Baling Talks 1955 Malayan Independence 1957 Singapore Self-governance 1959 North Borneo Self-governance 1963 Konfrontasi 1963–1966 Sarawak Self-governance 1963 Formation of Malaysia 1963 Singapore in Malaysia 1963–1965 ASEAN Declaration 1967 Second communist insurgency 1968–1989 New Economic Policy 1971–1990 Peace Agreement of Hat Yai 1989
Barisan Nasional era Federal Territory of KL 1974 Pedra Branca dispute 1979–2008 South China Sea dispute (Spratly Islands) 1980–present Federal Territory of Labuan 1984 Memali incident 1985 Operation Lalang 1987 Constitutional crisis 1987–1988 National Development Policy 1990–2000 Vision 2020 1991–2020 Royal Immunity Amendments 1993 Financial crisis 1997–1998 1998 Commonwealth Games 1998 Reformasi Movement 1998–present Malaysia Nipah virus outbreak 1998–1999 Twin Towers Grand Opening 1999 Federal Territory of Putrajaya 2001 H1N1 pandemic in Malaysia 2009–2010 1Malaysia 2009–2018 1MDB scandal 2015–present Malaysian Citizens' Declaration 2016
Pakatan-Perikatan era GE14 2018 ICERD protest 2018 Bornean States status bill 2019 Shared Prosperity Vision 2030 2019–2030 COVID-19 pandemic 2020–present Political crisis 2020–present Movement Control Order 2020–2021 2020 Sabah Dispute 2020 State of Emergency 2021 COVID-19 vaccination 2021–present Constitutional amendment 2021
Incidents Brunei revolt 1962–1966 North Borneo dispute (Philippine militant attacks) 1962–present Singapore race riots 1964 Brunei's Limbang claim 1967–2009 Penang Hartal riot 1967 13 May incident 1969 Ligitan and Sipadan dispute 1969–2002 Malaysian haze crisis 1972–present AIA building hostage crisis 1975 National Monument bombing 1975 Campbell Shopping Complex fire 1976 Sabah Air GAF Nomad crash 1976 MH653 incident 1977 Kelantan Emergency 1977 Dawn Raid 1981 1985 Lahad Datu ambush 1985 Memali Incident 1985 Sabah Emergency 1986 Ming Court Affair 1987 1989 Taufiqiah Al-Khairiah madrasa fire 1989 Bright Sparklers Fireworks disaster 1991 Highland Towers collapse 1993 MH2133 incident 1995 Tropical Storm Greg 1996 Al-Ma'unah incident 2000 2001 Kampung Medan riots 2001 2004 tsunami in Malaysia 2004 Murder of Altantuyaa 2006 Bersih rally 2007–2016 HINDRAF rally 2007 Anti ISA rally 2009 2010 attacks against places of worship in Malaysia 2010 2013 People's Uprising Rally 2013 Black-Out rally 2013 Lahad Datu standoff 2013 Kajang Move 2014 MH370 incident 2014 MH17 incident 2014 2014–15 Malaysia floods 2014–2015 2015 Sabah earthquake 2015 Malay Dignity Rally 2015 Movida Bar grenade attack 2016 Assassination of Kim Jong-nam 2017 Darul Quran Ittifaqiyah madrasa fire 2017 Subang Temple riot 2018 ICERD protest 2018 2020–21 Malaysian floods 2021 Undi-18 protest 2021 LRT train collision 2021 Contract Doctor Hartal 2021 2021-22 Malaysia floods 2021–present
By topic Communications Economic Military
v t e

The 1Malaysia Development Berhad scandal was a large-scale financial and political corruption case involving the Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB). Established in 2009 under Prime Minister Najib Razak to pursue strategic investments and support national development, the fund became the center of a complex international conspiracy in which billions of dollars were diverted through shell companies, offshore accounts and falsified transactions.^[1]

International investigators, including the United States Department of Justice, determined that more than US$4.5 billion was misappropriated from the fund between 2009 and 2014. The scheme involved high-level political figures, financial intermediaries and private associates who leveraged access to Malaysian and Middle Eastern officials to channel money through a global network of financial institutions.^[2]

The operation was widely facilitated by Malaysian financier Jho Low, who exercised significant informal influence over 1MDB despite holding no official role. Investigators found that Low coordinated transactions with officials and private partners, using the proceeds to acquire luxury real estate, artwork, jewelry, a superyacht and other high-value assets across several countries.^[3]

Prominent figures in the financial sector were also implicated. Senior Goldman Sachs executives, including Tim Leissner and Roger Ng, were found to have structured bond offerings that enabled the diversion of funds and concealed improper payments. Goldman Sachs reached a global settlement with U.S. authorities in 2020, agreeing to pay more than US$2.9 billion in penalties for violations of anti-bribery laws.^[4]

In Malaysia, the scandal precipitated a national political crisis marked by public protests, the dismissal of senior officials and sustained criticism of the government’s handling of the fund. Following the 2018 general election, Malaysian authorities reopened investigations, leading to multiple charges against Najib Razak for breach of trust, abuse of power and money laundering. He was later convicted in connection with SRC International, a 1MDB subsidiary, and sentenced to twelve years imprisonment.^[5]

The consequences of the scandal extended across multiple jurisdictions, prompting investigations in the United States, Switzerland, Singapore and several other countries. Authorities have since recovered and repatriated billions in misappropriated assets, and recovery efforts remain ongoing as international legal proceedings continue.^[6]

Background[edit | edit source]

In 2009, Najib Razak became Prime Minister of Malaysia and introduced the national development initiative 1Malaysia. As part of this programme he created the sovereign wealth fund 1Malaysia Development Berhad (1MDB) to attract foreign investment, advance major development projects and alleviate poverty. Najib chaired the advisory board and held final authority over major investment decisions. The fund was initially capitalised with approximately US$1 billion.^[7]

Najib’s wife, Rosmah Mansor, and her son Riza Aziz were frequently noted in public reporting as the family’s profile rose during 1MDB’s expansion. Allegations of irregular transactions and opaque governance later led to scrutiny of Najib’s close circle and the management practices of the fund.^[7]

Malaysian financier Jho Low served as an informal but influential intermediary during 1MDB’s early years. Although he held no official position, Low cultivated relationships with Malaysian officials and Middle Eastern royal families, enabling him to participate in negotiations and facilitate cross-border transactions. Investigators later identified Low’s central role in directing significant financial movements linked to the misappropriation of 1MDB funds.^[2]

Senior bankers from Goldman Sachs, including Tim Leissner and Malaysian executive Roger Ng, became key advisers and facilitators for 1MDB’s major bond issuances. Their efforts reflected Goldman’s broader expansion into Southeast Asia following the global financial crisis. Both men developed close working ties with Low, and later court filings described their roles in arranging transactions that enabled the diversion of significant funds.^[4]

Scheme[edit | edit source]

The United States Department of Justice reported that the 1MDB fraud evolved across several phases involving joint ventures, bond issuances and complex layers of offshore financial transfers. The initial phase began in 2009 when Najib and Jho Low met PetroSaudi executives aboard a yacht in Monaco. The delegation included Saudi royal Turki bin Abdullah Al Saud and PetroSaudi co-founder Tarek Obaid. Najib later authorised a US$2.5 billion joint venture between 1MDB and PetroSaudi. U.S. investigators determined that the arrangement enabled approximately US$1 billion to be diverted into a Swiss bank account controlled by Low’s associates.^[2]

Subsequent phases involved major bond offerings arranged by Goldman Sachs. Between 2012 and 2013 Goldman raised US$6.5 billion for 1MDB through three transactions that generated unusually high fees. Investigators found that US$1.4 billion was diverted to an account in Switzerland and US$1.3 billion to an account in Singapore. According to U.S. authorities, portions of these funds were laundered through intermediaries and used to provide improper benefits to officials in Malaysia and the United Arab Emirates.^[8]

Use of funds[edit | edit source]

International investigators estimate that more than US$4 billion was misappropriated from 1MDB and used to purchase luxury residential properties, artwork, diamonds, designer jewelry and other high-value assets. These acquisitions formed a major component of asset forfeiture actions undertaken by the United States and cooperating jurisdictions.^[8]

Filings from the U.S. Department of Justice indicate that Jho Low used funds from the PetroSaudi transaction to support an extravagant lifestyle in the United States. Approximately US$100 million was directed toward real estate in Hollywood, and roughly US$40 million was spent on apartments in New York. Low also financed celebrity events and purchased high-value gifts for entertainers and models, reinforcing his social presence in Hollywood and New York.^[7]

The scandal also extended into the film industry. Red Granite Pictures, co-founded by Riza Aziz and Joey McFarland, was alleged by U.S. authorities to have received diverted 1MDB funds used to finance the productions of The Wolf of Wall Street, Daddy’s Home and Dumb and Dumber To. In 2017 U.S. authorities seized royalty income connected to these films as part of recovery efforts, and Jho Low received a credit acknowledgement in The Wolf of Wall Street reflecting his involvement in its financial network.^[9]

Malaysian investigations and actions[edit | edit source]

Change of auditors and transparency[edit | edit source]

The RM 425 million profit declared between 25 September 2009 and 31 March 2010 raised many criticisms and controversies about the lack of transparency in 1MDB's published accounts. Tony Pua, DAP Member of Parliament for Petaling Jaya Utara, questioned Najib, 1MDB's advisory board chairman, as to whether the figures were the result of an asset injection into 1MDB by the government such as the transfer of land rights to the company.^[10][11]

During the October 2010 parliamentary session, 1MDB explained that its accounts had been fully audited and signed off by KPMG, and closed as of 31 March 2010. Deloitte was involved in the valuation and analysis of the portfolio, while Ernst & Young provided tax advice for 1MDB.

1MDB eventually rang alarm bells by asking for a six-month extension on the filing of its annual report with the Companies Commission of Malaysia (CCM) due by 30 September 2013. At the same time, the change of three auditors since its inception in 2009 was considered suspicious.^[12][13] Responding to earlier criticism, CCM said that 1MDB had responded and lodged the necessary information, including registering an address, as required by law.^[a]

The Sungai Besi airport land transfer took place in June 2011 as a precedent for the development known as Bandar Malaysia, a mixed integrated project of commercial, residential and green-technology zones.^[14] Prior to this, there had been questions in parliament by the opposition regarding the lack of progress on Bandar Malaysia even though 1MDB had already raised RM 3.5 billion in loans and Islamic bonds for the project.^[15][16] In April 2013, 1MDB awarded a RM 2.1 billion contract to Perbadanan Perwira Harta Malaysia (PPHM), a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), to develop eight relocation sites for Pangkalan Udara Kuala Lumpur.^[17] Construction of Bandar Malaysia was to commence after the relocation. As part of its debt rationalisation plan, on 31 December 2015 1MDB reached an agreement with a consortium led by Iskandar Waterfront Holdings and China Railway Engineering Corporation to sell 60 percent of its stake in Bandar Malaysia Sdn Bhd.^[18] The deal later collapsed.^[19]

On 7 September 2015, board advisor Abdul Samad Alias resigned, stating that numerous requests for information had been ignored.^[20][21] 1MDB denied this, stating that its president Arul Kanda had met Abdul Samad multiple times to discuss the company’s affairs.^[22]

1MDB had no proper external audit after 2013, partly due to Deloitte Malaysia withdrawing its audit opinions for financial years 2013 and 2014 and advising that they should no longer be relied upon.^[23][24] Rising public concern led Najib, as chairman of the advisory board, to order an audit by the Auditor General of Malaysia in March 2015.^[25]

The completed audit report was classified under the Official Secrets Act and restricted to the Public Accounts Committee.^[26][27] Unofficial copies later circulated online.^[28][29][30] Following Najib’s defeat in the 2018 general election, the new government formally declassified the audit report.^[31]

In May 2018, the incoming administration directed PricewaterhouseCoopers (PwC) to conduct a special audit and financial review of 1MDB.^[32]

Debts and rating downgrade[edit | edit source]

By early 2015, 1Malaysia Development Berhad had accumulated approximately RM 42 billion in debt, a level that raised substantial concern among financial analysts and Malaysian opposition figures. Independent reporting at the time noted pressure on the Malaysian ringgit and growing doubts about the fund’s capacity to meet its obligations.^[33] Concerns deepened when 1MDB bond prices fell, reflecting market unease over the company’s liquidity and long-term stability.^[34][35]

The financial pressures intensified when the Malaysian Cabinet denied 1MDB’s request for a RM 3 billion capital injection, narrowing the fund’s options for meeting upcoming obligations and raising questions about the effectiveness of its debt-management strategy.^[36][37][38]

Donation explanation from government[edit | edit source]

On 3 August 2015, the Malaysian Anti-Corruption Commission announced that RM 2.6 billion deposited into Najib Razak’s personal bank accounts originated from foreign donors and not from 1MDB transactions. The agency did not identify the donors or the purported purpose of the funds, contributing to significant public skepticism and political criticism.^[40][41]

Subsequent political statements offered differing explanations. UMNO leader Wan Adnan Wan Mamat asserted that the funds were donated by Saudi Arabia as gratitude for Malaysia’s role in regional security matters, including efforts against ISIS.^[42]

Saudi Foreign Minister Adel al-Jubeir later stated that the funds were a genuine donation, with no quid pro quo expected.^[43][44]

Malaysia’s attorney general Mohamad Apandi Ali later asserted that the donor was one of the sons of the late King Abdullah, specifically Turki bin Abdullah Al Saud.^[45][46] However, reporting from The Wall Street Journal disputed the government’s claims, asserting that evidence pointed to corporate entities linked to 1MDB rather than Saudi royals as the source of the funds.^[47][48][49]

Bank Negara actions[edit | edit source]

In early 2016, Bank Negara Malaysia revoked three permissions previously granted to 1MDB for overseas investments totaling US$1.83 billion, concluding that the fund had obtained approval using incomplete or inaccurate information. The central bank’s review marked a significant escalation in domestic regulatory pressure surrounding the fund.^[50][51]

Following its review, Bank Negara formally recommended criminal prosecution of 1MDB for regulatory violations.^[52][53] 1MDB responded that the funds could not be repatriated because they had already been deployed for investment purposes.^[54]

Police reports[edit | edit source]

On 28 August 2015, an UMNO member filed a civil lawsuit against Najib Razak alleging a breach of fiduciary duties, claiming that the prime minister failed to disclose or properly account for political donations deposited into his personal bank accounts. The suit also sought an injunction to prevent the plaintiff’s removal from UMNO during litigation.^[55] The plaintiff, Anina Saadudin, was subsequently expelled from UMNO.^[56][57][58]

A separate UMNO member, Abdul Rashed Jamaludin, lodged a police report in Johor alleging wrongdoing concerning the transfer of funds into Najib’s accounts.^[59][60]

UMNO member Khairuddin Abu Hassan and lawyer Matthias Chang submitted evidence on the scandal to Swiss authorities, prompting inquiries into whether Swiss banks had facilitated questionable transactions connected to 1MDB.^[61][62] Khairuddin also filed a report in Hong Kong concerning companies believed to have engaged in transactions linked to 1MDB.^[63][64]

Both Khairuddin and Chang were subsequently barred from leaving Malaysia, leading to criticism from civil society groups and several prominent political figures.^[65][66][67]

The two men were later charged under the Security Offences (Special Measures) Act on allegations that they had attempted to undermine Malaysia’s financial and banking sectors. Their prosecution drew widespread criticism and raised concerns regarding the use of national-security laws in cases involving political accountability.^[68][69][70]

Local lawsuits[edit | edit source]

Domestic political pressures over 1MDB led to several civil actions in Malaysian courts. In August 2015, the People’s Justice Party (PKR) filed a suit against Najib Razak, Tengku Adnan Tengku Mansor, 1MDB and the Election Commission, alleging that funds linked to 1MDB were used to finance campaign activities in violation of federal election spending limits. The action sought judicial review of the alleged irregularities and challenged the legality of the campaign expenditures in question. The High Court subsequently dismissed the case, ruling that PKR lacked the legal standing required to bring the claim and that the pleadings did not establish a justiciable controversy under Malaysian electoral law.^{[71][72][73][74]}

In March 2016, former Prime Minister Mahathir Mohamad initiated a separate civil action against Najib Razak, alleging that Najib’s removal of senior officials and restructuring of investigative bodies constituted interference with ongoing inquiries into 1MDB and the RM 2.6 billion deposited into his personal accounts. Mahathir claimed that such actions hampered independent oversight mechanisms and undermined lawful investigations. The filing drew international attention due to its unprecedented nature, as it represented a sitting prime minister being sued by a predecessor over alleged obstruction of state institutions.^[75][76][77]

Government actions[edit | edit source]

Government reshuffles and disciplinary actions followed mounting public criticism over 1MDB. In July 2015, Deputy Prime Minister Muhyiddin Yassin was removed from office after questioning the administration’s handling of the controversy, and his portfolio was reassigned to Home Minister Ahmad Zahid Hamidi. The same reshuffle also removed Rural and Regional Development Minister Shafie Apdal, another critic of the fund’s management. Both men were later expelled from UMNO as the scandal widened.^[78][79][80]

The administration also removed Attorney General Abdul Gani Patail, who had been part of a multi-agency task force examining 1MDB-linked allegations, and replaced him with Federal Court judge Mohamed Apandi Ali. The change effectively halted several pending lines of inquiry and contributed to a broader reorganization of oversight bodies involved in financial and administrative review.^[81][82][83]

Ramifications and debt restructuring default[edit | edit source]

The Public Accounts Committee (PAC) concluded in April 2016 that senior 1MDB executives had acted without board authorisation and repeatedly misled external auditors about the fund’s transactions. The committee reported that improper approvals, incomplete documentation and misleading representations led to serious failures in management oversight. It recommended that law enforcement investigate former chief executive Shahrol Azral Ibrahim Halmi and reiterated that responsibility also rested with the board chaired by Najib Razak, whose supervisory controls were judged to be inadequate.^{[84][85][86][87][88]}

The PAC report disclosed that US$3.5 billion in payments were made to a company named Aabar Investments PJS Limited, incorporated in the British Virgin Islands. The legitimate Abu Dhabi firm, International Petroleum Investment Company (IPIC), issued a statement confirming that neither it nor its subsidiary Aabar Investments PJS had any connection to the BVI entity. The revelation deepened concerns about misappropriation and raised questions about the authenticity of payment instructions used by 1MDB and its intermediaries.^[89][90][91]

IPIC later informed the London Stock Exchange that 1MDB had failed to meet a US$1.1 billion obligation under a debt-restructuring arrangement, and declared the agreement terminated. The announcement placed 1MDB in technical default on obligations tied to the restructuring framework, increasing pressure on Malaysia’s Ministry of Finance to respond to demands from IPIC for reimbursement.^[92][93][94]

Renewed investigations after 14th general election[edit | edit source]

The 2018 general election, which ended six decades of Barisan Nasional rule, reopened long-stalled inquiries into 1MDB. The new administration under Prime Minister Mahathir Mohamad established a special task force chaired by former Attorney General Abdul Gani Patail to revive investigations, recover assets and coordinate with foreign enforcement agencies.^[95]

Authorities barred Najib Razak from leaving the country and carried out extensive searches of residences linked to Najib and Rosmah Mansor, seizing valuables and cash estimated between RM 900 million and RM 1.1 billion. Police described the seizure as the largest in Malaysian history, comprising thousands of jewellery pieces, hundreds of watches and more than five hundred luxury handbags.^[96][97]

Najib was arrested in July 2018 and later charged with multiple counts of corruption, abuse of power and money laundering related to SRC International and other 1MDB-linked transactions.^[98][99]

Arrest warrants were also issued for Jho Low and former SRC International director Nik Faisal Ariff Kamil.^[100]

In June 2018, the MACC froze political bank accounts linked to UMNO as part of its inquiries.^[101]

Later that year, Malaysian prosecutors filed money-laundering charges in absentia against Jho Low and his father, Larry Low, alleging that US$457 million was siphoned from 1MDB to acquire luxury assets including the superyacht Equanimity. The vessel was seized in Indonesia and later auctioned to the Genting Group.^{[102][103][104][105]}

In December 2018, the Attorney-General’s Chambers filed criminal charges against subsidiaries of Goldman Sachs, former bankers Tim Leissner and Roger Ng, former 1MDB official Jasmine Loo and Jho Low over bond offerings arranged by Goldman in 2012–2013. Prosecutors sought more than US$2.7 billion in penalties and additional custodial sentences for alleged misappropriation of bond proceeds.^{[106][107][108]}

A January 2020 release of audio recordings by Malaysian anti-corruption officials alleged that Najib Razak asked the then crown prince of the United Arab Emirates, Mohammed bin Zayed, to fabricate a loan agreement to suggest his stepson’s financing came from IPIC rather than from 1MDB.^[109]

On 28 July 2020, Najib was convicted on all seven charges related to SRC International and sentenced to twelve years in prison and a RM 210 million fine.^[110]

The Court of Appeal (December 2021) and Federal Court (August 2022) upheld the conviction, concluding that Najib had misappropriated RM 42 million from SRC funds.^[111][112]

On 1 September 2022, Rosmah Mansor was convicted on three counts of corruption and sentenced to ten years’ imprisonment and a RM 970 million fine.^[113]

Investigations by foreign law enforcement agencies[edit | edit source]

Australia[edit | edit source]

The Australian fund management company Avestra Asset Management, which managed up to RM 2.32 billion in 1MDB funds, is being liquidated, and is under investigation by the Australian Securities and Investments Commission for reported breaches of the law and potential losses to its members.^{[114][115][116]} The Australian High Court has ordered five investment schemes run by Avestra to close down after discovering undisclosed related-party transactions, with 13 potential breaches of corporate law and failure to invest according to the fund's individual mandates.^[117][118]

Hong Kong[edit | edit source]

Hong Kong police have begun investigations regarding $250 million in Credit Suisse branch deposits in Hong Kong linked to Najib Razak and 1MDB.^[119][120]

Indonesia[edit | edit source]

Indonesia seized the superyacht Equanimity on 28 February 2018 on the island of Bali at the request of the U.S. Department of Justice, as part of a corruption investigation linked to the 1MDB scandal.^[121] The Indonesian government returned the yacht to Malaysia in August 2018, following the activation of the Mutual Legal Assistance Treaties between Indonesia, the United States and Malaysia.^[122][123]

Luxembourg[edit | edit source]

State prosecutors in Luxembourg have also started money laundering investigations concerning 1MDB as it involved transfers of several hundred million dollars to an offshore company involving a bank account from Luxembourg.^{[124][125][126][127]} The bank in question is a private bank of the Edmond de Rothschild Group that manages money on behalf of wealthy clients.^{[128][129][130]}

Seychelles[edit | edit source]

The Seychelles's Financial Intelligence Unit is helping an international investigation into the troubled state fund 1MDB, by providing detailed information relating to offshore entities registered in Seychelles that are related to the international investigation.^{[131][132][133]}

1MDB has not contested, and appears unlikely to contest, any lawsuit which has arisen from the investigations of foreign investigating authorities.^[134]

Singapore[edit | edit source]

In Singapore, the Monetary Authority of Singapore (MAS) and the Commercial Affairs Department have seized a number of bank accounts in Singapore for possible money-laundering offences related to investigations into alleged financial mismanagement at 1MDB.^{[135][136][137]} One of the bank accounts frozen belonged to Yak Yew Chee, who was the relationship manager for 1MDB Global Investments Ltd, Aabar Investment PJS Limited and SRC International and Low Taek Jho.^{[138][139][140]} Singaporean Yeo Jiawei, an ex-BSI banker, has been charged with money laundering and cheating offences as part of the Singapore probe into 1MDB, and Yeo's dealings with firms linked to 1MDB, Brazen Sky Ltd. and Bridge Partners Investment Management.^[141][142] A second individual, Kelvin Ang Wee Keng, was charged with corruption in connection with the Singaporean investigation into 1MDB.^[143][144]

According to a joint statement from the Attorney General's Chambers and the Monetary Authority of Singapore, assets totalling S$240 million have been seized during their investigations into 1MDB.^[145][146] Of the bank accounts and properties seized were S$120 million belonging to Jho Low and his family.^{[147][148][149]}

In March 2017, MAS issued a 10-year prohibition order against former Goldman Sachs banker Tim Leissner for making false statements on behalf of his bank without its knowledge.^[150] The prohibition order, which prevents him from performing any regulated activity under the Securities and Futures Act and from managing any capital market services firm in Singapore, was extended in December 2018 from 10 years to lifetime after he admitted to charges related to an investigation into the 1MDB scandal.^[151][152]

In September 2018, the Singapore State Courts granted the return of 1MDB monies with a total value of S$15.3 million to Malaysia while solicitors for the Malaysian government stated that efforts to recover other unlawfully misappropriated assets were ongoing.^[153][154]

Switzerland[edit | edit source]

Swiss authorities under the direction of the Office of the Attorney General of Switzerland began to freeze bank accounts amounting to several million US dollars linked to 1MDB.^{[155][156][157]} The Swiss attorney general's office said its investigation revealed indications that funds estimated to be US$4 billion may have been misappropriated and said it was looking into four cases of potential criminal conduct.^[158][159] The Swiss prosecutor has said that money had been deposited into Swiss bank accounts of former Malaysian public officials and current and former officials of United Arab Emirates.^{[160][161][162]} Swiss Financial Market Supervisory Authority (Finma) has begun investigations into several Swiss banks as part of the money laundering probe involving 1MDB.^{[163][164][165]}

On 15 March 2018, the Swiss parliament rejected a motion to return seized monies from their investigations into 1MDB to the Malaysian people, as had been lobbied for by Swiss politicians and non-governmental bodies.^[166] However, on 10 July 2018, Swiss Attorney General Michael Lauber indicated that Switzerland would not enrich itself by keeping illicit or stolen assets and be able to have the monies returned by legal obligations.^[167]

United Arab Emirates[edit | edit source]

The United Arab Emirates has issued travel bans and frozen bank accounts of former Abu Dhabi sovereign-wealth fund International Petroleum Investment Company's employees Khadem al-Qubaisi and Mohammed Badawy Al Husseiny who had close connections to 1MDB, and may have used the British Virgin Islands-based Aabar Investments PJS to funnel money from 1MDB into various accounts and companies around the world.^[168][169]

United Kingdom[edit | edit source]

In September 2020, the U.S. Department of Justice initiated civil forfeiture proceedings against funds held by law firm Clyde & Co in London, United Kingdom. The US$330 million were misappropriated 1MDB money, apparently intended for an oil project in Venezuela that later failed.^[170][171]

United States[edit | edit source]

The Wall Street Journal reported in 2015 that the Federal Bureau of Investigation had begun investigations into money laundering involving 1MDB.^{[172][173][174]} The international corruption unit of the US Department of Justice (DOJ) began a probe into property purchases in the United States involving Najib Razak's stepson Riza Aziz and the transfer of millions of dollars into Najib Razak's personal account.^[175][176] The probe was looking at properties purchased by shell companies belonging to Riza Aziz and close family friend Jho Low.^[177][178] Investment banks such as JPMorgan Chase & Co., Deutsche Bank AG and Wells Fargo were asked by the DOJ to retain and turn over records that might be related to improper transfers from 1MDB.^{[179][180][181]} The FBI issued subpoenas to several past and present employees of film production company Red Granite Pictures, co-founded by Riza Aziz, also its chairman, in regards to allegations that US$155 million was diverted from 1MDB to help finance the 2013 film The Wolf of Wall Street.^{[182][183][184][185]}

Also under scrutiny by the FBI and DOJ was the role of global investment bank Goldman Sachs in alleged money laundering and corruption.^{[186][187][188]} The FBI probed the connection between Najib and a regional top executive of Goldman Sachs, and the nature of the latter's involvement in multibillion-dollar deals with 1MDB.^[189] Tim Leissner, the former chairman of Goldman Sachs' Southeast Asia branch and husband of Kimora Lee Leissner, was issued a subpoena by the DOJ as part of their investigations.^{[190][191][192]} In the July 2016 DOJ civil lawsuit,^[193] a high-ranking government official having control over 1MDB, who was referred to more than 30 times as "Malaysian Official 1" ("MO1"), was alleged to have received around US$681 million (RM 2.8 billion) of stolen 1MDB money via Falcon Bank in Singapore on 21 and 25 March 2013, of which US$650 million (RM 2.0 billion) was sent back to Falcon Bank on 30 August 2013.^[194] In September 2016, Najib Razak was identified as "MO1" by Datuk Abdul Rahman Dahlan, then Minister in the Prime Minister's Department.^[195][196] The wife of "MO1", Rosmah Mansor, was also alleged to have received US$30 million worth of jewels financed from pilfered 1MDB funds.^[197]

In June 2017, the DOJ began actions to recover more than US$1 billion from people close to Najib and 1MDB,^{[198][199][200][201]} seizing assets including high-end properties in Beverly Hills, Los Angeles, Manhattan, New York City and London,^[202][203] as well as fine artwork, a private jet, a luxury yacht and royalties from the film The Wolf of Wall Street and its production company Red Granite Pictures.^{[204][205][206]} On 7 March 2018, in California courts, the producers of the film agreed to pay US$60 million to settle DOJ's claims that they financed the movie with money siphoned from 1MDB.^[207] The claims were settled in August 2018, with the settlement stipulating that the payment should not be construed as "an admission of wrongdoing or liability on the part of Red Granite".^[208]

On 1 November 2018, the DOJ announced that two former Goldman Sachs bankers, Tim Leissner and Roger Ng, as well as Malaysian fugitive financier Jho Low, were charged over funds misappropriated from 1MDB and paying bribes to various Malaysian and Abu Dhabi officials. Tim Leissner admitted in a plea that more than US$200 million in proceeds from 1MDB bonds flowed into accounts controlled by him and a relative.^{[209][210][211]} He agreed to forfeit US$43.7 million (RM 185 million) and pleaded guilty to conspiring to launder money and violate the Foreign Corrupt Practices Act, while Roger Ng was arrested in Malaysia at the request of DOJ and extradited to the US for prosecution before returning and facing charges in Malaysia.^{[212][213][214][215][216]} According to Roger Ng's lawyers, he was infected with Dengue fever and leptospirosis while in Malaysian jail and lost a significant amount of weight.^[217][218]

On 30 November 2018, the DOJ announced that George Higginbotham, a former DOJ employee, pleaded guilty to conspiracy to deceive US banks about the source and purpose of foreign funds for a lobbying campaign against the US investigations into the 1MDB scandal. The DOJ filed a lawsuit to recover more than US$73 million (RM 305 million) in American bank accounts that Higginbotham helped open on behalf of Jho Low to finance the lobbying campaign.^{[219][220][221]} Further in May 2019, the DOJ announced that it had charged Jho Low and former Fugees rapper Pras for conspiring to funnel US$21.6 million from overseas accounts into the 2012 presidential election.^[222]

On 1 November 2019, Barron's reported that Jho Low had forfeited over $100 million in luxury homes as part of a settlement with prosecutors in the United States. Overall, he agreed to give up some $700 million in assets to the U.S. Department of Justice to have charges dropped, without admitting guilt.^[223]

Elliott Broidy’s name surfaced in some public media reports during the period when materials stolen through a foreign hacking operation were being circulated to journalists and political actors. However, subsequent court filings in the United States identified Broidy as a target of that operation rather than a participant, and later media reports based on those compromised documents were shown to be inaccurate or retracted. Because these disclosures did not originate from verifiable or independent evidence, they are not regarded as reliable indicators of any direct involvement in the matter.^{[224][225][226]}

On 23 February 2022, the star witness in the bribery trial of former Goldman Sachs Group Inc banker Roger Ng being held in New York, testified that ex-Goldman chief Lloyd Blankfein met in 2009 with then Malaysian prime minister Najib Razak just ahead of big bond deals for the country’s 1MDB fund — and that the meeting came with an agenda. In return for the lucrative business, Goldman was to get Najib’s three children jobs at the bank.^[227] On 24 February, Najib's daughter Nooryana Najwa Najib has confirmed that she did try to apply for a job at Goldman Sachs. She said she once met two former Goldman Sachs employees, Roger Ng and Tim Leissner as part of her networking efforts to land a "competitive job".^[228] Ultimately, an officer within Goldman rejected progressing with any job offer within the group.^[229]

On 24 February 2022, it was announced that the trial of Roger Ng had been paused because the prosecutors did not share more than 15,000 documents with the defense lawyers rešresenting Robert Ng.^[230] Ng was convicted of conspiring to launder money and bribe officials in Malaysia and the United Arab Emirates as well as violating the internal accounting controls of his employer under the Foreign Corrupt Practices Act.^[231][232] $4.5 billion of the stolen money was laundered through U.S. financial institutions.^[233]

Recovery of 1MDB assets[edit | edit source]

Malaysia has so far^[when?] recovered US$322 million (RM1.3 billion) worth of 1MDB assets since its renewed investigations into the 1MDB scandal after the 14th General Election in May 2018.^[234]

Steps have been taken to preserve the value of the assets caught up in the case, including the sale of the Park Lane Hotel in New York in November 2018, a step endorsed by the U.S. DOJ, in accordance with the rule of law and on the basis of no admission of wrongdoing or liability.^[235] In August 2018, Malaysian authorities seized a yacht allegedly purchased by Low, selling it some eight months later to minimize the costs associated with maintaining it. A spokesperson for Low described the seizure as "illegal".^[236][237] Leonardo DiCaprio returned gifts received from Low to US authorities in 2017, including an Oscar received by Marlon Brando and paintings by Picasso and Jean-Michel Basquiat.^[238]

The recovered funds include the sum of US$126 million from the Equanimity judicially sold to the Genting Group, US$139 million to be returned by the United States after sale of Jho Low's interest in Park Lane Hotel in Manhattan, and US$57 million from a forfeiture settlement of Red Granite Pictures, which has been repatriated to Malaysia after deducting the costs incurred for investigations, seizures and litigation.^[234]

Apart from the above, another sum of S$50 million (RM152 million) related to 1MDB has been ordered by the Singapore Courts to be repatriated.^[234]

Malaysia has been working with at least six countries to recover about US$4.5 billion worth of assets allegedly stolen from 1MDB,^[239] in which US$1.7 billion (RM7 billion) worth of assets have been sought by the DOJ to forfeit.^[234]

On 15 April 2020, it was reported that the DOJ had returned US$300 million in funds stolen during the 1MDB scandal to Malaysia.^[240]

On 24 July 2020, it was announced that the Malaysian government would receive US$2.5 billion in cash from Goldman Sachs, and a guarantee from the bank they would also return US$1.4 billion in assets linked to 1MDB bonds.^[241] Put together this was substantially less than the US$7.5 billion that had been previously demanded by the Malaysian finance minister. At the same time, the Malaysian government agreed to drop all criminal charges against the bank and that it would cease legal proceedings against 17 current and former Goldman directors. Some commentators argued that Goldman had got away with a very good deal.^[242]

In January 2022, the Malaysian government received RM 333 million ($111 million) as a fine from the local affiliate of KPMG in settlement of the lawsuit filed against it.^[243]

Reports by Offshore Alert indicate that actions to recover further misappropriated assets are ongoing in various jurisdictions.^[244]

Media coverage[edit | edit source]

In January 2015, around 227,000 leaked documents related to the fraud were provided to the Wall Street Journal and activist blogger Clare Rewcastle-Brown, who writes Sarawak Report.^[245] The documents were leaked by Swiss national Xavier Justo, a former PetroSaudi International employee.^[246] In February 2015, The Sunday Times newspaper and the Sarawak Report blog, referencing leaked email correspondences, that Penang-based Low Taek Jho, who has ties Najib Razak, siphoned out US$700 million from a joint venture deal between 1MDB and PetroSaudi International through an entity named Good Star Ltd.^{[247][248][249][250][251]} Although Low never received an official position in 1MDB, he is described as someone who was regularly consulted about 1MDB without having any decision-making authority.^[252] An email revealed that Low had the loan approval from Najib for $1 billion without getting any approval from Bank Negara.^[253][254]

Within Malaysia, The Edge was one of the few media outlets which published investigations on the scandal. Its license was suspended by the Malaysian government, in a move that its publisher suggested was censorship.^[255]

Wall Street Journal reporting[edit | edit source]

It was claimed through a report by The Wall Street Journal that 1MDB made overpriced purchases of power assets in Malaysia through Genting Group in 2012. Genting then allegedly donated this money to a foundation controlled by Najib, who used these funds for election campaign purposes during the 2013 general elections.^{[256][257][258]} According to a news report quoting 1MDB, the company denied that it overpaid for its energy assets. 1MDB was quoted as saying that their energy acquisitions were made only when the company was convinced of its long-term value.^[259]

Further allegations were made by The Wall Street Journal that $700 million was transferred from 1MDB and deposited in AmBank and Affin Bank accounts under Najib's name.^[260][261] A task force to investigate these claims had frozen six bank accounts linked to Najib and 1MDB.^[262][263] The Malaysian Anti-Corruption Commission (MACC) subsequently, in August 2015, cleared 1MDB of this allegation. MACC issued a statement saying, among other things, "Results of the investigation have found that the RM2.6bil which was allegedly transferred into the account belonging to Najib Razak came from the contribution of donors, and not from 1MDB".^[264]

Najib Razak had originally denied allegations that stolen money was found in his bank accounts, saying "If I wanted to steal, surely I won’t steal the money and bring it into an account in Malaysia.^[265] The WSJ responded by revealing the bank account details online to rebut the denials by Najib and his supporters.^{[266][267][268]} Singapore police had frozen two Singapore bank accounts in connection with their own investigation into the alleged financial mismanagement at 1MDB, after reports stated that $700 million worth of deposits was moved through Falcon Bank in Singapore into Najib's personal accounts in Malaysia.^[269][270] However, 1MDB denied having any knowledge of their accounts being frozen, and said they have not been contacted by any of the foreign investigating authorities.^[271]

The WSJ also reported that 1MDB transferred around $850 million via three transactions in 2014 to a British Virgin Islands-registered company with a name disguising that it was controlled by International Petroleum Investment Company (IPIC), a United Arab Emirates state investment vehicle, according to wire transfer documents.^{[272][273][274]}

The WSJ released a report stating that 1MDB failed to pay $1.4 billion to IPIC. The money was owed to IPIC after it had guaranteed a US$3.5 billion bond issued by 1MDB to fund its purchase of power plant assets in 2012.^{[275][276][277]} The WSJ released another report saying that a further $993 million was missing that 1MDB was supposed to pay IPIC.^{[278][279][280]} 1MDB responded to the WSJ report, saying that the company continues to enjoy a strong business relationship with IPIC, as proven by the execution of a binding term sheet that saw IPIC assume obligation for a $3.5 billion bond, currently held by 1MDB, and followed a $1 billion cash payment made by IPIC to 1MDB in June.^[281] Earlier in October 2015, IPIC reaffirmed their commitment to working with 1MDB and the Malaysian Ministry of Finance.^[282]

Another report by the WSJ pointed out that 1MDB, in connection with a United States political fundraiser DuSable Capital Management LLC, signed a joint venture agreement creating a fund, Yurus PE Fund, to develop solar power plants in Malaysia.^[283][284] Six months after the joint venture agreement was signed, 1MDB bought out DuSable's stake of 49% of Yurus for $69 million before any construction took place.^[285][286] Based on bank transfer information, the WSJ reported that Najib spent close to $15 million on clothes, jewellery, and a car in places such as the United States, Singapore, and Italy using a credit card that was paid from one of several private bank accounts owned by Najib, to which 1MDB funds had been diverted.^{[287][288][289][290]}

Timeline[edit | edit source]

See also[edit | edit source]

• Jho Low
• Red Granite Pictures
• History of Malaysia
• Corruption in Malaysia
• Goldman Sachs controversies
• Murder of Shaariibuugiin Altantuyaa

Notes[edit | edit source]

References[edit | edit source]

Bibliography[edit | edit source]

• Recastle Brown, Clare (2018). The Sarawak Report: The Inside Story of the 1MDB Exposé. Gerak Budaya. p. 496. ISBN 9789670311166. Archived from the original on 2018-09-17.
• Wright, Tom; Hope, Bradley (2018). Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World. Hachette UK. p. 400. ISBN 978-0-316-43648-9.

External links[edit | edit source]

• The Guardian, "1MDB: The inside story of the world’s biggest financial scandal", 28 July 2016.
• Global Witness:
  • "The Real Wolves of Wall Street – The banks, lawyers and auditors at the heart of Malaysia’s biggest corruption scandal" (HTML), March 2018.
  • "The Real Wolves of Wall Street – The banks, lawyers and auditors at the heart of Malaysia’s biggest corruption scandal" (PDF), March 2018.
• Bloomberg News, "A Guide to the Worldwide Probes of Malaysia's 1MDB Fund", 8 March 2018.