PROSECUTORS yesterday accused a former Goldman Sachs banker of seeking to make millions of dollars laundering money looted from Malaysia’s 1Malaysia Development Board (1MDB) sovereign wealth fund, at the outset of a trial that could shed light on the bank’s response to warnings of corruption.
Roger Ng, Goldman’s former head of investment banking in Malaysia, is charged with conspiring to launder money and violate an anti-bribery law.
“The defendant saw an opportunity to make millions of dollars by cheating, and he took it,” Brent Wible, a lawyer with the US Department of Justice, said in an opening statement yesterday.
Ng has pleaded not guilty and his lawyer has said he is a “fall guy” for one of the biggest financial scandals in Wall Street history.
The trial in Brooklyn federal court could last up to six weeks.
The scandal stems from some US$6.5 bil in bonds that Goldman helped 1MDB, launched by former Malaysian Prime Minister Najib Razak to spur economic growth, sell from 2009 to 2014.
US prosecutors say Goldman earned US$600 mil in fees from the deals, but that around US$4.5 bil of the funds raised was embezzled.
The bank in 2020 paid a US$2.3 bil fine, returned US$600 mil in ill-gotten gains and agreed for its Malaysian subsidiary to plead guilty in US court as part of a deal, known as a deferred prosecution agreement (DPA).
Wible said Ng helped two co-conspirators – his former boss, Timothy Leissner, and Malaysian intermediary Jho Low – launder funds embezzled from 1MDB and used some of the stolen money to bribe officials in the Southeast Asian country to win business for Goldman.
Ng received US$35 mil in kickbacks from Leissner, Wible said.
Leissner to be prosecution witness
Leissner, a former partner for Goldman Sachs in Asia, in 2018 pleaded guilty to conspiracy to launder money, and conspiracy to violate the Foreign Corrupt Practices Act (FCPA), in part by helping to pay US$1.6 bil in bribes. He is expected to testify as a government witness against Ng.
Wible said Leissner, who has not yet been sentenced, would testify against Ng as part of a cooperation agreement with prosecutors and as a result would get a lighter punishment. But Wible said Leissner’s testimony would be backed up by other evidence.
Defence lawyer Marc Agnifilo countered that Ng had no role in the scheme perpetrated by Low and Leissner, and that he even warned Goldman management not to trust Low. He said the funds prosecutors called kickbacks in fact belonged to Ng’s wife and were derived from a business venture she had with Leissner’s ex-wife.
Agnifilo focused his opening statement largely on undermining Leissner, who is expected to testify for the government.
“They’re not partners-in-crime. There’s a gulf between these two men a mile wide,” he said. “Leissner uses people. You will see this time and time again. He is trying to use my client … to serve his jail time.”
Low, who was indicted alongside Ng in 2018, has not been arrested by US or Malaysian authorities. Malaysia has said he is in China, which Beijing has denied. – Feb 15, 2022.
