44 million dollars (39 million euros) were confiscated from the ex-Southeast Asia boss.
(Photo: Bloomberg)
new York It was an explosive statement: Executives at the major US bank Goldman Sachs are said to have known that the dubious financier Jho Low was involved in transactions with the plundered Malaysian sovereign wealth fund 1MDB. At least that’s what the German-born ex-Southeast Asia head of the bank, Tim Leissner, said on Wednesday on the witness stand.
Leissner is a key witness in the bribery trial of his former subordinate Roger Ng. He described Goldman’s role in the billion dollar scandal to the jury in the Brooklyn, New York, courtroom. Er, Ng “and our colleagues knew that Jho Low was the key decision maker, so we also had to involve Jho Low in all important aspects of the lucrative 1MDB transactions,” explained Leissner.
He and Ng hid Low’s involvement and paying bribes from Goldman’s compliance experts. However, other top bankers at the bank were well aware of Low’s involvement. Specifically, Leissner accused his ex-boss, Michael Evans, then Goldman’s Asia boss, and several other former executives of having known about the dubious events.
Low’s close relationship with then Malaysian Prime Minister Najib Razak and his family made it possible for Goldman to play a central role in 1MDB, Leissner said. He and Ng were hailed as “heroes” by Goldman bosses after the deal was closed.
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Long imprisonment threatened
Before he fell out of favor, Tim Leissner had lived the dream of many bankers: As a Goldman manager, he associated with heads of state, earned millions and married the famous ex-model Kimora Lee Simmons. The son of a Volkswagen employee studied at the University of Siegen and did an MBA in Connecticut in 1992. He joined Goldman in 1998, became a partner eight years later and head of the Southeast Asia division in 2014.
His business in the region was booming. Leissner was one of the first advisors to 1 Malaysia Development Bhd (1MDB), a government investment fund. Over the course of two years, Goldman earned about $600 million in fees overseeing three bonds that brought $6.5 billion to 1MDB — an unusually high fee for government-related transactions. These and other deals helped Leissner earn “big year-end bonuses,” the prosecution alleges.
>> Read here: Sovereign wealth fund 1MDB wants to recover billions through lawsuits
The problem: According to the investigators, things were not going well with the shops. Accordingly, Leissner paid bribes to get the orders from 1MDB, and he also embezzled money from the fund. According to court records, more than $2.7 billion of the $6.5 billion in revenue was diverted. The scandal came to light when $681 million in Malaysian PM’s private bank accounts surfaced, sparking an investigation. Goldman put Leissner on leave in January 2016.
Leissner has pleaded guilty to bribery and money laundering fraud worldwide. 44 million dollars (39 million euros) were confiscated from him.
Ng, who spearheaded 1MDB’s operations as head of investment banking in Malaysia, is the only other ex-Goldman banker on trial. Both face decades in prison. Ng wants to fight through the process. His lawyers portray him as Leissner’s aide, a conscientious banker who was the first to warn Goldman compliance about the doings of Malaysian financier Jho Low.
Did the bank still allow the dubious transactions? In fact, Goldman paid a $5 billion fine in 2020 and apologized for breaking the law. The bank declined to comment when asked. Now Wall Street is watching the proceedings with eagle eyes.
With material from Bloomberg.
More: German ex-Goldman banker becomes key witness in 1MDB trial