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Malaysian Financier Low Taek Jho, Also Known As “Jho Low,” and Former Banker Ng Chong Hwa, Also Known As “Roger Ng,” Indicted for Conspiring to Launder Billions of Dollars in Illegal Proceeds and to Pay Hundreds of Millions of Dollars in Bribes

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Former Banker Tim Leissner Pleaded Guilty to Conspiring to Launder Money and to Violate the Foreign Corrupt Practices Act Related to 1MDB

A three-count crim­i­nal indict­ment was unsealed today in fed­er­al court in the Eastern District of New York charg­ing Low Taek Jho, 36, also known as “Jho Low,” and Ng Chong Hwa, 51, also known as “Roger Ng,” with con­spir­ing to laun­der bil­lions of dol­lars embez­zled from 1Malaysia Development Berhad (1MDB), Malaysia’s invest­ment devel­op­ment fund, and con­spir­ing to vio­late the Foreign Corrupt Practices Act (FCPA) by pay­ing bribes to var­i­ous Malaysian and Abu Dhabi offi­cials.  As part of the three-count indict­ment, Ng is also charged with con­spir­ing to vio­late the FCPA by cir­cum­vent­ing the inter­nal account­ing con­trols of a major New York-head­quar­tered finan­cial insti­tu­tion (Financial Institution), which under­wrote more than $6 bil­lion in bonds issued by 1MDB in three sep­a­rate bond offer­ings in 2012 and 2013, while Ng was employed at the Financial Institution as a man­ag­ing direc­tor.  Ng was arrest­ed ear­li­er today in Malaysia, pur­suant to a pro­vi­sion­al arrest war­rant issued at the request of the United States.  Low remains at large.

Also unsealed today in fed­er­al court in the Eastern District of New York was the guilty plea of Tim Leissner, 48, the for­mer Southeast Asia Chairman and par­tic­i­pat­ing man­ag­ing direc­tor of the Financial Institution, to a two-count crim­i­nal infor­ma­tion charg­ing Leissner with con­spir­ing to laun­der mon­ey and con­spir­ing to vio­late the FCPA by both pay­ing bribes to var­i­ous Malaysian and Abu Dhabi offi­cials and cir­cum­vent­ing the inter­nal account­ing con­trols of the Financial Institution while he was employed by it.  According to court fil­ings, Leissner has been ordered to for­feit $43.7 mil­lion as a result of his crimes.

Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Assistant Director in Charge William F. Sweeney Jr. of the FBI New York Field Office, and Special Agent in Charge R. Damon Rowe of IRS Criminal Investigation (IRS-CI) Los Angeles Field Office announced the charges.

The Criminal Scheme

1MDB is a Malaysian state-owned and con­trolled fund cre­at­ed to pur­sue invest­ment and devel­op­ment projects for the eco­nom­ic ben­e­fit of Malaysia and its peo­ple.  As alleged in court fil­ings, between approx­i­mate­ly 2009 and 2014, as 1MDB raised mon­ey to fund its projects, bil­lions of dol­lars were mis­ap­pro­pri­at­ed and fraud­u­lent­ly divert­ed from 1MDB, includ­ing funds 1MDB raised in 2012 and 2013 through three bond trans­ac­tions that it exe­cut­ed with the Financial Institution.  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.  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.

As alleged, Low’s close rela­tion­ships with high-rank­ing gov­ern­ment offi­cials in Malaysia and Abu Dhabi were cen­tral to the scheme.  Ng, Leissner, and oth­ers at the Financial Institution alleged­ly knew Low was close to these gov­ern­ment offi­cials, includ­ing a high-rank­ing Malaysian gov­ern­ment offi­cial who had author­i­ty to approve 1MDB busi­ness deci­sions (Malaysian Official #1).  According to alle­ga­tions in court fil­ings, begin­ning in approx­i­mate­ly 2009 and con­tin­u­ing through 2014, Low, Ng, Leissner, and the oth­er co-con­spir­a­tors used Low’s rela­tion­ships to obtain and retain busi­ness for the Financial Institution through the promise and pay­ment of hun­dreds of mil­lions of dol­lars in bribes, includ­ing to ensure 1MDB award­ed the Financial Institution a role on three bond trans­ac­tions known inter­nal­ly at the Financial Institution as “Project Magnolia,” “Project Maximus,” and “Project Catalyze.”  As a result of its work for 1MDB dur­ing that time, the Financial Institution alleged­ly received approx­i­mate­ly $600 mil­lion in fees and rev­enues along with increased rep­u­ta­tion­al pres­tige.  At the same time, Ng, Leissner and oth­ers alleged­ly received large bonus­es and enhanced their own rep­u­ta­tions at the Financial Institution.  In total, accord­ing to alle­ga­tions in court fil­ings, more than $2.7 bil­lion was mis­ap­pro­pri­at­ed from 1MDB and Low, Ng, Leissner and oth­ers con­spired to laun­der this mon­ey through the U.S. finan­cial sys­tem to pay bribes to for­eign offi­cials and for the per­son­al ben­e­fit of them­selves and their rel­a­tives.

Project Magnolia 

In ear­ly 2012, accord­ing to alle­ga­tions in court fil­ings, fol­low­ing a series of meet­ings in Malaysia and the United Kingdom, Low, Leissner, Ng and the co-con­spir­a­tors agreed that, with the assis­tance of the Financial Institution, 1MDB would issue $1.75 bil­lion in bonds guar­an­teed by an enti­ty whol­ly-owned and con­trolled by the gov­ern­ment of Abu Dhabi.  Low alleged­ly explained to Ng, Leissner, and oth­ers at the time that, to com­plete the trans­ac­tion, bribes would need to be paid to offi­cials in Malaysia and Abu Dhabi and hun­dreds of mil­lions of dol­lars were alleged­ly paid to offi­cials in these coun­tries.  Court fil­ings also allege that Low, Ng, Leissner, and oth­er co-con­spir­a­tors knew that Low intend­ed to use funds mis­ap­pro­pri­at­ed from the bond trans­ac­tion to bribe and influ­ence the offi­cials to obtain the nec­es­sary approvals and any addi­tion­al assis­tance to exe­cute Project Magnolia for the Financial Institution and to pay kick­backs to Ng, Leissner, and oth­ers.

In or around March 2012, 1MDB alleged­ly select­ed the Financial Institution to be the sole bookrun­ner and arranger for Project Magnolia.  As part of the scheme, Low and oth­er co-con­spir­a­tors alleged­ly enlist­ed the assis­tance of 1MDB offi­cials, promis­ing to pay them bribes and kick­backs.  In one instance, as alleged in court fil­ings, in con­nec­tion with Project Magnolia, Low told one 1MDB offi­cial that he would “[g]ive [the offi­cial a] big present” when the trans­ac­tion closed.  According to alle­ga­tions in court doc­u­ments, the fact that bribes and kick­backs were being paid in con­nec­tion with Project Magnolia was known to Ng, Leissner, and oth­er employ­ees of the Financial Institution.

After Project Magnolia closed on or about May 21, 2012, more than $500 mil­lion of the bond pro­ceeds were alleged­ly mis­ap­pro­pri­at­ed and divert­ed from 1MDB through numer­ous wire trans­fers to bank accounts in the name of shell com­pa­nies ben­e­fi­cial­ly owned and con­trolled by Low, Leissner, Ng, and oth­er co-con­spir­a­tors, includ­ing a high-lev­el offi­cial at the Abu Dhabi enti­ty that guar­an­teed the Project Magnolia bonds and a close rel­a­tive of Malaysian Official #1.  As alleged, the bond pro­ceeds trans­ferred to Malaysian Official #1’s close rel­a­tive were lat­er used by the relative’s U.S. motion pic­ture com­pa­ny to assist in the pro­duc­tion of the film “The Wolf of Wall Street.” 

Project Maximus and Project Catalyze 

Court fil­ings fur­ther allege that from May 2012 and con­tin­u­ing through 2013, Low, Ng, Leissner, and their co-con­spir­a­tors con­tin­ued to work to ensure that the Financial Institution obtained and retained addi­tion­al 1MDB busi­ness, includ­ing the bond trans­ac­tions known as “Project Maximus” and “Project Catalyze,” which trans­ac­tions gen­er­at­ed sub­stan­tial fees and rev­enues for the Financial Institution.  As alleged, although both trans­ac­tions were designed to raise more than $4 bil­lion for 1MDB’s invest­ment and devel­op­ment projects, Low, Ng, Leissner, and oth­er co-con­spir­a­tors used the trans­ac­tions to fur­ther the crim­i­nal scheme, ulti­mate­ly laun­der­ing hun­dreds of mil­lions of dol­lars of divert­ed funds from these trans­ac­tions into bank accounts ben­e­fi­cial­ly owned and con­trolled by, among oth­ers, the co-con­spir­a­tors, includ­ing Low, Leissner and offi­cials in Malaysia and Abu Dhabi.  As alleged in court fil­ings, through­out this time, Ng, Leissner, and at least one oth­er employ­ee of the Financial Institution knew that Low would and did pay bribes to influ­ence offi­cials in Malaysia and Abu Dhabi to obtain the nec­es­sary approvals to exe­cute Project Maximus and Project Catalyze.  Low, Ng, Leissner, and oth­ers also alleged­ly knew that large por­tions of the bond pro­ceeds would be ille­gal­ly divert­ed to them­selves and oth­ers, includ­ing to for­eign gov­ern­ment offi­cials.

As part of the scheme alleged in court fil­ings, Low, Ng, Leissner and oth­er co-con­spir­a­tors again used a series of wire trans­fers to laun­der bil­lions of dol­lars of mis­ap­pro­pri­at­ed and fraud­u­lent­ly divert­ed funds from Project Maximus and Project Catalyze.  Following the close of Project Maximus, approx­i­mate­ly $790 mil­lion of the bond pro­ceeds was alleged­ly trans­ferred through a series of shell com­pa­ny accounts ben­e­fi­cial­ly owned and con­trolled by Low, Leissner and oth­ers, includ­ing accounts of offi­cials in Malaysia and Abu Dhabi.  In par­tic­u­lar, Leissner and Ng alleged­ly caused mil­lions of dol­lars of these funds to be trans­ferred to accounts of 1MDB offi­cials or rel­a­tives of such offi­cials in exchange for their assis­tance in obtain­ing and retain­ing busi­ness for the Financial Institution.  Over $35 mil­lion of the bond pro­ceeds also alleged­ly was used by a co-con­spir­a­tor to help acquire a con­do­mini­um in New York, New York ben­e­fi­cial­ly owned by Low.

Similarly, accord­ing to alle­ga­tions in court fil­ings, after Project Catalyze closed in March 2013, more than $1 bil­lion of divert­ed funds, trace­able to the trans­ac­tion, were laun­dered, at Low’s direc­tion, to bank accounts in the name of enti­ties ben­e­fi­cial­ly owned and con­trolled by Low, Leissner, and oth­ers, includ­ing 1MDB offi­cials.  As alleged, more than $4 mil­lion of the funds were trans­ferred to a bank account ben­e­fi­cial­ly owned by a rel­a­tive of Ng.  Additionally, as part of the scheme, Low alleged­ly used a shell com­pa­ny account to receive more than $1 bil­lion of the Project Catalyze bond pro­ceeds and spent approx­i­mate­ly $137 mil­lion of these funds to pur­chase works of art at a high-end art auc­tion house in New York, New York. 

Post-Catalyze 1MDB Transactions at the Financial Institution

The Financial Institution con­tin­ued to seek busi­ness from 1MDB after Project Catalyze.  As alleged, Leissner and oth­ers were par­tic­u­lar­ly focused on secur­ing a role for the Financial Institution on a pro­posed ini­tial pub­lic offer­ing (IPO) of 1MDB’s ener­gy assets.  To influ­ence cer­tain offi­cials to award the Financial Institution a role in the pro­posed IPO, Low and Leissner alleged­ly con­tin­ued to pay bribes to cer­tain offi­cials at 1MDB.

For exam­ple, as alleged, in an online chat between Low and Leissner in June 2014, Low and Leissner dis­cussed the need to “suck up to” a 1MDB offi­cial and to send “cakes” to a per­son believed to be the wife of Malaysian Official #1.  A few months after this chat, a bank account owned and con­trolled by Leissner and his rel­a­tive was used to trans­fer approx­i­mate­ly $4.1 mil­lion to a high-end New York jew­el­er, in part, to pay for gold jew­el­ry for the wife of Malaysian Official #1.

The charges in the indict­ment as to Low and Ng are mere­ly alle­ga­tions, and those defen­dants are pre­sumed inno­cent until proven guilty beyond a rea­son­able doubt in a court of law.

The inves­ti­ga­tion was joint­ly con­duct­ed by the FBI’s International Corruption Unit and IRS-CI.  The government’s crim­i­nal case is being han­dled by the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) and Fraud Section and the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York.  MLARS Trial Attorneys Jennifer E. Ambuehl, Woo S. Lee, and Mary Ann McCarthy, Fraud Section Trial Attorneys Katherine A. Nielsen and Nikhila Raj, and Assistant U.S. Attorneys Jacquelyn M. Kasulis and Drew Rolle of the Eastern District of New York are pros­e­cut­ing the case.  Additional Criminal Division Trial Attorneys and Assistant U.S. Attorneys with­in U.S. Attorney’s Offices for the Eastern District of New York and Central District of California have pro­vid­ed valu­able assis­tance with var­i­ous aspects of this inves­ti­ga­tion, includ­ing with civ­il and crim­i­nal for­fei­tures.

The Criminal Division’s Office of International Affairs pro­vid­ed crit­i­cal assis­tance in this case.  The Department also appre­ci­ates the sig­nif­i­cant coop­er­a­tion and assis­tance pro­vid­ed by the U.S. Securities and Exchange Commission and the Board of Governors of the Federal Reserve System along with the Federal Reserve Bank of New York.  The Department also appre­ci­ates the sig­nif­i­cant assis­tance pro­vid­ed by the Attorney General’s Chambers of Malaysia, the Royal Malaysian Police, the Malaysian Anti-Corruption Commission, the Attorney General’s Chambers of Singapore, the Singapore Police Force-Commercial Affairs Division, the Office of the Attorney General and the Federal Office of Justice of Switzerland, the judi­cial inves­ti­gat­ing author­i­ty of the Grand Duchy of Luxembourg, and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg.

The International Unit of the Criminal Division’s MLARS is home to the Kleptocracy Asset Recovery Initiative—a team of ded­i­cat­ed pros­e­cu­tors work­ing to pros­e­cute indi­vid­u­als and for­feit the pro­ceeds of for­eign offi­cial cor­rup­tion that has affect­ed the U.S. finan­cial sys­tem and, where appro­pri­ate, return those pro­ceeds to ben­e­fit the peo­ple harmed by these acts of cor­rup­tion and abuse of office.  MLARS’s Bank Integrity Unit inves­ti­gates and pros­e­cutes banks and oth­er finan­cial insti­tu­tions, includ­ing their offi­cers, man­agers, and employ­ees, whose actions threat­en the integri­ty of the indi­vid­ual insti­tu­tion or the wider finan­cial sys­tem.

The Criminal Division’s Fraud Section is respon­si­ble for inves­ti­gat­ing and pros­e­cut­ing all FCPA mat­ters.  Additional infor­ma­tion about the Justice Department’s FCPA enforce­ment efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Individuals with infor­ma­tion about pos­si­ble pro­ceeds of for­eign cor­rup­tion locat­ed in or laun­dered through the United States should con­tact fed­er­al law enforce­ment or send an email to kleptocracy@usdoj.gov.

The Defendants

LOW TAEK JHO and NG CHONG HWA

E.D.N.Y. Docket No. 18-CR-538 (MKB)

TIM LEISSNER

E.D.N.Y. Docket No. 18-CR-439 (MKB)

Malaysian Financier Low Taek Jho, Also Known As “Jho Low,” and Former Banker Ng Chong Hwa, Also Known As “Roger Ng,” Indicted for Conspiring to Launder Billions of Dollars in Illegal Proceeds and to Pay Hundreds of Millions of Dollars in Bribes

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