KUALA LUMPUR – Some US$1.15 billion (RM4.84 billion) looted from former 1Malaysia Development Bhd (1MDB) subsidiary SRC International Sdn Bhd have fallen through the cracks, alleged a group of repurposed offshore entities.
Three such entities based in the British Virgin Islands, which were once used to apparently defraud 1MDB, said there are companies and trusts linked to the financial scandal that are yet to be uncovered.
This comes after the entities filed for bankruptcy in Florida in an effort to recover part of the US$8.5 billion allegedly stolen from the sovereign fund that may still be in the US, reported Bloomberg.
In the court documents filed, the entities – now overseen by administrators appointed by the Malaysian government – admitted to be a part of the 1MDB scheme and were likely set up to receive or transfer funds.
Various individuals and entities in the US were allegedly identified as participants or being in the know of the transactions.
“Some of the missing funds passed through US entities, including investment managers, fund managers and other US entities who provided services to the participants in the fraud,” according to court papers.
The purpose of Chapter 15 is “to provide an effective mechanism for dealing with cases of cross-border insolvency” and is known as a powerful asset recovery tool.
It also allows for assisting foreign trustees and liquidators to track down and recover assets in the US.
This comes amid jury deliberation on the 1MDB conspiracy case involving former Goldman Sachs banker Roger Ng, 49.
He is facing accusations of pocketing millions of dollars in kickbacks in the 1MDB deal, with allegations of money laundering and violating anti-bribery laws.
Ng, who worked under Tim Leissner, was charged in the federal court in New York in 2018 for bribery and laundering money siphoned from 1MDB during his time as Goldman Sachs’ head of investment banking in Malaysia and faces up to 20 years’ jail if convicted. He has pleaded not guilty.
Leissner, who is a former partner at investment and financial firm Goldman Sachs, had pleaded guilty in 2018 for his involvement in the financial scandal but has yet to be sentenced. He was also the prosecution’s star witness in Ng’s trial.
Meanwhile, the investment bank reached a deal with the US Justice Department to pay more than US$2 billion for its role.
In February, Leissner had told the court that it was “greed and ambition” that motivated his involvement in the 1MDB deal.
He said bringing 1MDB’s multi-million-dollar deal with the US investment bank “instantaneously made us heroes”.
He alleged that Ng had in 2008 fostered a relationship with fugitive Low Taek Jho, who was then the intermediary between Goldman and 1MDB. Low in 2018 was charged in absentia in the US and Malaysia.
It later led to Goldman Sachs selling US$6.5 billion in bonds for 1MDB and making US$600 million in fees.
Leissner also testified he was told that United Arab Emirates’ Deputy Prime Minister Sheikh Mansour bin Zayed Al Nahyan “wouldn’t get out of bed for less than US$100 million” as well as former Malaysian prime minister Datuk Seri Najib Razak getting his share of kickbacks.
In December, the Malaysian appellate court upheld Najib’s conviction for all seven charges involving corruption over SRC International funds.
The court said the prosecution had proven elements of the offences beyond a reasonable doubt, and upheld Najib’s RM210 million fine and 12-year jail term. – The Vibes, April 7, 2022
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