US to charge Malaysia businessman in 1MDB scandal: Report

Low Taek Jho. (Courtesy photo)

KUALA LUMPUR: US authorities plan to file criminal charges against a businessman suspected to be at the center of a major corruption scandal that has embroiled Malaysia’s prime minister, the Wall Street Journal reported.
Allegations that huge sums were misappropriated from the Malaysian state investment fund 1MDB have triggered a scandal which has buffeted Prime Minister Najib Razak, who founded 1MDB, though the leader has denied any wrongdoing.
Najib is a family friend of Malaysian financier Low Taek Jho, also known as Jho Low, against whom the US plans to file criminal charges of wire fraud and money-laundering, according to the report published on Tuesday.
The planned charges against Low will be separate from civil proceedings filed by the US Justice Department to seize more than $1 billion in assets believed bought with funds siphoned from 1MDB, the report added, citing people familiar with the matter.
Speaking at a global business forum in Kuala Lumpur on Wednesday, Najib did not mention the 1MDB scandal or the Wall Street Journal report, but accused his political opponents of creating “false propaganda” that the country is on the verge of bankruptcy.
“This running down of Malaysia is nothing less than economic sabotage for selfish, personal political gain,” he said.
“If it affects perceptions abroad, it won’t be opposition politicians who will suffer. It will be ordinary Malaysians.”
Global investigators from about 10 countries believe that billions of dollars were extracted from 1MDB.
Whistleblowers say Low helped establish 1MDB and made key financial decisions, even though he had no official positions in Malaysia. Low has denied any wrongdoing.
Huge sums are believed to have moved through Singapore, Switzerland and other wealth centers in order to buy art and real estate and to invest in Hollywood movies.
Singapore and Switzerland have also launched investigations into the cross-border flow of allegedly stolen 1MDB money through the global financial system.
A US Justice Department team has just visited Singapore “to conduct interviews related to Mr. Low and other aspects of the 1MDB matter,” the Wall Street Journal said, quoting two people with knowledge of the trip.
Singapore, a regional financial center known for its tough stance against corruption, was the first country to hand down criminal convictions related to the 1MDB investigations.
The city-state’s courts have jailed four private bankers so far, including Singaporean Yeo Jiawei, who was sentenced last December to 30 months in prison.
It was revealed during Yeo’s trial that he had worked closely with Low, who has not been charged in Singapore.
Singapore has also closed the local branches of two Swiss private banks — BSI and Falcon Private Bank — used in the transfer of illicit funds.
The Monetary Authority of Singapore last week banned a former Goldman Sachs banker from working in the country’s financial industry for 10 years after he was linked to the 1MDB scandal, and said it plans to impose bans on three more people.