Former Goldman banker testifies that the 1MDB project is a “house of cards”

NEW YORK — A former Goldman Sachs banker testified Wednesday that he and other corrupt executives at the company built a “house of cards” that was doomed to collapse in an attempt to cover up a daring scheme to ransack a Malaysian public investment fund.

Tim Leissner told a federal jury in New York that he paid bribes, took bribes and lied to banks to maintain the scheme. Leissner has identified Roger Ng, who is on trial in this sprawling case, as a key conspirator.

Leissner testified that he, Ng and Low Taek Jho – the fugitive Malaysian financier and socialite known as Jho Low – used offshore accounts and shell companies to “hide the flow of funds”. The money laundering efforts also involved writing fake contracts with banks, he said.

“If we told a bank the truth, it wouldn’t work. … The house of cards would have fallen,” he said.

Leissner, 52, pleaded guilty in 2018 to paying millions of dollars in bribes to government officials in Malaysia and Abu Dhabi. He was ordered to forfeit $43.7 million as part of his guilty plea and agreed to testify against Ng.

Ng’s defense attorneys described the $4.5 billion looting of public investment fund 1MDB as “perhaps the biggest heist in world history.” But they argue that U.S. prosecutors scapegoated Ng for “company-wide” failures at Goldman that enabled the colossal fraud orchestrated by superiors like Leissner.

Federal prosecutors allege Ng pocketed $35 million in secret kickbacks and conspired to launder stolen funds through the US financial system. They say he also deleted personal email accounts to cover his tracks.

A former head of investment banking in Malaysia, Ng is the only Goldman banker to stand trial in the 1MDB scandal. The 49-year-old pleaded not guilty to three counts, including conspiracy to launder money and violating an anti-corruption law.

The embezzlement funded lavish spending on jewelry, art, superyacht and luxury real estate. The loot has even helped fund Hollywood movies, including Leonardo DiCaprio’s 2013 film “The Wolf of Wall Street.”

Low, who maintains his innocence, has become well known in the New York and Los Angeles club scenes. In 2012, he threw a lavish 31st birthday party with DiCaprio, Kim Kardashian and other celebrities in attendance – a party described by The Wall Street Journal as the “craziest party (Las) Vegas has ever seen”.

A subsidiary of Goldman Sachs has “knowingly and willfully” admitted to conspiring to violate US anti-corruption laws, agreeing to pay more than $2.9 billion. The penalties included approximately $600 million in profits Goldman made from the 1MDB scandal. This is on top of the $3.9 billion Goldman paid to Malaysia.

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