Ex-Goldman Sachs Banker Convicted for His Role in a $4 Billion Fraud

A former Goldman Sachs banker was convicted Friday on bribery and money laundering charges stemming from a global fraud scandal: the looting of more than $4 billion from a Malaysian sovereign wealth fund.

A federal jury has found former banker Roger Ng guilty after a nearly two-month trial in which the government’s key witness admitted to being a frequent liar. Still, jurors found Mr. Ng guilty on all three counts after more than two days of deliberation. He could face up to 30 years in prison.

Breon Peace, the US attorney for the Eastern District of New York, said the scheme to steal the fund, known as 1MDB, was “enormous in its scale” and “brazen in its execution.”

“Today’s verdict is a victory not only for the rule of law but also for the people of Malaysia, whom the fund was supposed to help by raising money for projects to develop their country’s economy,” said Mr. Peace. “The defendant and his cronies saw 1MDB not as an entity to do good for the people of Malaysia, but as a piggy bank to enrich themselves.”

No date has been set for sentencing. Ng’s attorney, Marc Agnifilo, did not respond to messages seeking comment.

The trial, which began in mid-February in federal court in Brooklyn, is likely to be the only criminal trial in the United States to emerge from the scandal. The stolen billions financed the lavish lifestyles of powerful Malaysians, including the country’s former prime minister, and others, bought paintings by van Gogh and Monet, paid for luxury properties from London to Beverly Hills, and helped finance the film. of Hollywood “The Wolf of Wall Street”. ”

Jho Low, a high-spending Malaysian businessman and the architect of the scheme, was charged along with Mr Ng, but is a fugitive and is believed to be living in China. Tim Leissner, a former Goldman partner and the government’s star witness during the trial, is scheduled to be sentenced in July; he pleaded guilty to bribery and money laundering charges in 2018.

Low is accused of pocketing nearly $1 billion in funds diverted from a series of bond offerings that Goldman had arranged for the 1MDB fund. Leissner received more than $60 million in bribes, and prosecutors said Ng had received $35 million in illegal proceeds.

Federal prosecutors have said that others, including former Prime Minister Najib Razak and his family, as well as officials in Abu Dhabi, received hundreds of millions of dollars in bribes for approving Goldman as the lead underwriter for the bond deals. Mr. Najib was ousted from power and later convicted by a Malaysian court and sentenced to up to 12 years in prison.

The trial was unusual almost from the start: The process was delayed several days because federal prosecutors were slow to turn over potentially critical documents to the defense, which Ng’s attorneys say hampered their ability to prepare their case and could be grounds for an appeal.

It also featured testimony from a star witness who admitted to being a prolific liar. Leissner, once a rising star at Goldman in Asia, was on the stand for 10 days, including six days of searing cross-examination. He was forced to admit that he initially lied to federal agents, to his fellow associates at Goldman, and to his girlfriends and wives.

The litany of lies that Mr. Leissner had to confess on the stand was long and in some cases unbelievable. He admitted to having been married twice to two women at the same time. He said he had served a bogus divorce decree on her current wife, model and fashion designer Kimora Lee Simmons, when she was persuading her to marry him. (The couple, who have two children, are separated.) And he said that while dating Ms. Simmons, he contacted her using a fake email account he had created in the name of her second wife, Judy Chan.

Mr. Leissner was also forced to admit that he lied to investigators about his actions regarding 1MDB, and was questioned about earlier statements that conflicted with what he said on the stand. When pressed, Leissner admitted that he “lied a lot.”

In his closing argument, Mr. Agnifilo told the jury that Mr. Leissner was “in a class of his own” when it comes to lying and could not be trusted to tell the truth about anything, including his involvement in the scheme. of bribery and kickbacks. But prosecutors said Leissner was telling the truth about the crimes Ng was charged with, including a $35 million payment that authorities said was an illegal bribe.

Mr. Ng’s wife, Hwee Bin Lim, testified that the $35 million she and her husband had received was proceeds from a $6 million investment he made many years earlier with Ms. Chan.

Early in the trial, Mr. Agnifilo told Judge Margo K. Brodie, the chief judge for the Eastern District of New York, that he was considering seeking a mistrial due to what he called “government misconduct” for failing to deliver tens of thousands of dollars. of pages of Mr. Leissner’s emails until after the trial began. Prosecutors called the delay “inexcusable” and blamed a separate legal team responsible for reviewing the documents for potential legal privilege issues.

Mr Agnifilo decided not to ask for a mistrial, but legal experts have said the delays could be used to argue for a new trial on appeal.

The trial was a rare example of a manager testifying against a subordinate. In high-profile corporate crime cases, key cooperating witnesses are often used to build cases against high-level executives in a company. But in Mr. Leissner’s case, federal prosecutors used their cooperation not only to prove the charges against Mr. Ng, but also to build a criminal case against his former employer.

Mr. Leissner’s cooperation led Goldman Sachs’ subsidiary in Malaysia to plead guilty to a single count of violating the Foreign Corrupt Practices Act – the first time Goldman had appeared before a US judge and admitted it was guilty of a crime.

The bank agreed to pay $2.3 billion in fines to federal authorities and billions more to authorities in other countries, including Malaysia. The bank itself also entered into a three-year deferred prosecution agreement with US authorities.

Mr. Ng’s trial did not shed much light on the actions of others at Goldman, but did provide details on the strategies employed to conceal Mr. Low’s involvement in orchestrating the three bond deals. Those deals raised $6.5 billion for the fund and generated $600 million in fees for Goldman.

One of the three criminal charges for which Mr. Ng was convicted involved conspiracy to violate controls and procedures at Goldman that are intended to deter the payment of bribes to foreign officials.

Prosecutors presented evidence that Mr. Ng and Mr. Leissner frequently communicated on personal email accounts, rather than their work accounts. They also said that the two men had deleted some emails after the scandal involving the 1MDB fund began to spread in Asia.

Mr. Leissner testified that he and Mr. Ng were willing to pay the bribes because they knew that getting the bonus deals was a big win for Goldman and they would be seen as “heroes” within the bank.

As part of its plea agreement, Goldman accepted a statement of facts that described a series of internal control failures that authorities said should have uncovered wrongdoing by its former employees, as well as Mr. Low’s involvement in crafting agreements.

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