Senior Goldman staff knew about Jho Low, Leissner testifies in 1MDB trial

 

Former Goldman Sachs partner Tim Leissner says he and his colleagues knew that Jho Low was the key decision maker in the 1MDB scandal.

NEW YORK: Senior executives at Goldman Sachs Group Inc knew that financier Low Taek Jho, or Jho Low, was involved in transactions related to 1MDB, former star banker Tim Leissner testified.

Leissner, who is the US government’s key witness in the federal bribery trial of his former subordinate, Roger Ng, told jurors in a Brooklyn, New York, courtroom that he and Ng “and our colleagues knew that Jho Low was the key decision maker, so therefore we had to include Jho Low as well” in all major aspects of the lucrative 1MDB transactions.

He said that while he and Ng concealed from Goldman compliance officials Low’s efforts and the bribes they paid to get the business, other Goldman colleagues knew about Low’s involvement.

Leissner, 52, named for the jury his own boss at the time, Michael Evans, then Asia chairman, and several other former executives of the bank.

He said Evans went with him to visit 1MDB executives after Goldman earned US$220 million in the first bond transaction, known as Magnolia, and that Evans thanked the chief executive officer of 1MDB at the time for using Goldman.

“Don’t thank me,” Leissner said the CEO responded. “Thank Jho Low.”

“So Mike knew from that moment”, he said, and added, “Mike asked me during Magnolia if Low was involved and I lied outright and said no.”

He also named Andrea Vella, a former co-head of investment banking in Asia, saying he and Vella discussed Low’s role as a key decision maker in the 1MDB transactions.

He told the jury former executives Toby Watson and John Donne also knew Low was involved.

“There were others at Goldman Sachs, on the business side, who we talked to about Jho Low’s involvement,” Leissner said.

He said he and Ng did not alert colleagues in compliance to the intermediary’s participation “because had they known, it would’ve raised red flags and stopped any transaction at Goldman Sachs”.

Leissner testified that he never disclosed to his fellow bankers the “full scope” of what he knew about Low and the bond transactions.

“They only knew of his influence and rumours or other things that Low may be doing,” he said.

Low’s close relationship with Malaysia’s prime minister at the time, Najib Razak, and his family allowed the financier to play a central role in 1MDB and provoked “rumours”, he said.

He said that after the deals closed, he and Ng were hailed as “heroes” by Goldman superiors.

Leissner, who was the bank’s Southeast Asia chairman, has pleaded guilty to charges stemming from the global scheme. On the stand on Wednesday, he told jurors that zeal for US$6.5 billion in 1MDB transactions drove him and Ng to bribe foreign officials, because without them “these transactions would have never happened”.

Ng, who he said was the lead banker on the 1MDB deals, as head of investment banking in Malaysia, is charged with conspiring with Leissner to launder money and violate US anti-bribery laws. He is the only former Goldman banker to go on trial in the scandal.

Leissner told the jury he was “best friends” with Ng and that they worked together to deceive Goldman superiors about bribes paid out in the scam, which prosecutors say Low hatched.

He said Low, who was also charged in the scheme, had decision-making power at 1MDB and that Leissner and Ng decided the chance to get a piece of the 1MDB business – which he called the largest set of deals in Goldman’s history – and the kickbacks they got made it worth the risk.

Leissner testified that Low was a critical player because of his close relationship with Najib and with officials in Abu Dhabi, who provided a crucial guarantee for the bond transactions.

“The actual success of these transactions relied upon bribes and kickbacks being paid,” he told the court.

It has been almost four years since Leissner pleaded guilty to his role in the fraud that stretched from Asia to Wall Street. The 1MDB affair included investigations in Asia, the US and Europe. Authorities spent years tracking about US$4.5 billion that was allegedly siphoned from 1MDB and flowed into high-end art, real estate and a super yacht and helped fund the hit movie “The Wolf of Wall Street,” which chronicled an earlier era of financial crimes.

Prosecutors claim Ng conspired to circumvent Goldman’s internal controls and engaged in the money-laundering plot with Leissner, who they say paid him US$35 million to take part in the scheme. Ng’s lawyers have argued that he played no role in it and that Leissner misled Goldman compliance officials about Low’s involvement in the 1MDB bond transactions.

Leissner pleaded guilty in August 2018 to conspiring to violate US anti-bribery laws and launder money. He admitted to bribing officials in Malaysia and the United Arab Emirates to get bond deals for Goldman. He was ordered to forfeit US$44 million.

In opening statements on Monday, Ng’s lawyer, Marc Agnifilo, assailed Leissner’s credibility and argued he was a “double bigamist” who was testifying for the US only to save himself.

Goldman Sachs in 2020 agreed to pay more than US$5 billion, including a record US$2.3 billion fine in the US, and entered its first-ever guilty plea for its role in the scandal. The bank got a deferred-prosecution agreement while its Malaysian unit pleaded guilty.

Leissner faces the possibility of decades in prison when he is sentenced this year. - FMT