Former Prime Minister of Malaysia Najib Razak has been identified by the US Securities and Exchange Commission (SEC) as receiving kickbacks from bonds raised by investment bank Goldman Sachs.
According to filings by the SEC on Tuesday, millions of dollars were transferred to shell companies controlled by scandal-embroiled 1Malaysia Development Berhad (1MDB) officials. On top of that, US$1.3 million (S$1.76 million) was used to purchase jewellery from a New York jeweller for Najib’s wife Rosmah Mansor.
The filing indicated that former Goldman Sachs executive Tim Leissner misappropriated over US$2.7 billion (S$3.66 billion) of the US$6.5 billion (S$8.81 billion) in bond transactions, which was then distributed to officials in Abu Dhabi and Malaysia including Najib.
The ex-premier is currently standing trial in Malaysia on corruption charges for accepting RM42 million (S$13.76 million) from SRC International, a subsidiary of 1MDB.
The filing by the SEC added that Mr Leissner had also paid kickbacks to others who participated in the scheme as well as their family members.
“Leissner knew that a large portion of the proceeds of Project Maximus would be illegally diverted to himself and others including government officials through shell companies beneficially owned and controlled by himself and others,” SEC said.
Project Maximus is the internal code name used by Goldman Sachs for the bond issue that the bank facilitated.
“Leissner also knew at the time that Najib Razak and government officials from Abu Dhabi and 1MDB officials would receive money from the proceeds of Project Maximus that passed through various shell companies.”
“Along with Low Taek Jho or Jho Low and others, it was Leissner’s intended purpose that the payments were to flow to these government officials to influence them to execute the bond transaction with Goldman Sach.”
“A close relative of Najib Razak and a senior official with the Middle Eastern Sovereign Wealth Fund, were among others who had received some of these funds,” said the filing.
The SEC made the filing after it announced that the charges against Mr Leissner for engaging in a corruption scheme had been settled. In addition to a permanent bar from the securities industries for violating anti-bribery laws in the US, Mr Leisser is required to pay disgorgement of US$43.7 million (S$59.25 million). The amount will be offset by amounts paid in pursuant to a forfeiture order as part of a resolution in a parallel criminal action by the US Department of Justice.
Charles Cain, SEC Enforcement Division unit chief said in a statement that Mr Leissner had abused his leadership role in the investment bank by engaging in a massive bribery scheme which targeted the highest level of two foreign governments.