Crime

Goldman Sachs Banker Pleads Guilty In $2.7B Malaysian Money Laundering Scheme

Former Goldman Southeast Asia chairman Tim Leissner just pled guilty to money laundering and bribery to get officials in Malaysia and Abu Dhabi to sign bond agreements with the bank.

The criminal charges and guilty pleas were announced on November 1 by U.S. Federal prosecutors.

According to Federal documents just unsealed in this case, the crimes grew out of a major investment development fund created by the government of Malaysia. That fund, the 1Malaysia Development Berhad fund, or 1MDB for short, was originally created in 2009 to help grow Malaysia’s economy and reduce poverty. But in the real world the needs of the poor are always subservient to international finance and the criminal elite. The amount of money involved was so large and account-tracking so lax that Federal investors now believe as much as $4.5 billion in money was embezzled or otherwise re-routed in complex money laundering activities throughout the globe. The stolen funds were processed through everything from art auctions, to luxury real estate in New York City, and even Hollywood production companies.

The 1MDDB corruption case has been simmering for some time, in a tangled web going back almost a decade and starting with that Malaysian Prime Minister Najib Razak. Razak, also the chair of 1MDB, is himself reportedly under criminal investigation both within the country and by at least Switzerland, whose chief prosecutor is involved in tracking the money-laundering connections in the case.

Razak is also seen as a key connection point to Goldman Sachs, the Pentagon, and even the Saudi Arabia government in a complex money-for-influence scheme. The Prime Minister did receive a $681 million “donation”, as he has described it, into his personal bank account. A separate investigation revealed that the Saudi royal family is behind the donation. That donation also appears to be connected to a move by both the Saudi Arabian and the Pentagon to help spread the Saudi Wahhabi form of Islam in the country. The Wahhadi doctrines, currently being propagated through the country via Saudi-financed imams, is rapidly changing the more open, liberal culture in the nation to a stricter one.

Razak claims to have returned $620 million of the $681 million. The money is still suspicious and clearly had a positive influence on multiple policies Razak carried forward in the country.

The conversion of Malaysia to Wahhabi Islam has an added benefit for the American war industry. According to sources, the Pentagon and likely the CIA as well are leveraging the Saudi-Malaysia connection and the rise of Wahhabi muslim influence to help set up Malaysia as another area of Islamic terrorism to justify American military presence. In a region with strong Chinese influence, the installation of a militant Islam will help keep Chinese influence at bay while increasing U.S. military presence and control. Just as the United States uses Saudi-backed Islamic terrrorism to justify its activities in the Middle East and Africa, it will use it to justify the expansion of its activities in Southeast Asia.

Razak has also been linked to a Mossad-CIA plan to weaken the Malaysian government through influences like the above. Bribes going all the way to the top would only have been part of the plan. Israel prefers Wahhabism over other forms of Islam because the Wahhabist's Saudi masters are subservient to Israel, whereas Iran controlled Shia Islam is fiercely opposed to Israel and seeks to spread its influence where it can.

In the charges unveiled by the Justice Department on November 1, the 48-year-old Leissner was directly tied to laundering of at least $2.7 billion of that total. As only part of his deal, he had to agree to cooperate with the government and must turn over $43.7 million of his own money.

At the same time as Leissner’s charges were announced, the Justice Department unsealed another three-count criminal indictment involving 51-year-old-old Ng Chong Hwa, another former Goldman Sachs banker, and Low Take Jho, a well-known financier in the region. Ng was arrested October 29 in Malaysia under a provisional arrest warrant produced there in cooperation with the U.S. government. Low is still out and presumed evading arrest. His passport has been canceled and Interpol has issued an arrest warrant for him internationally.

According to Justice Department, Low was the principal architect of the 1MDB laundering scheme. One of his principal assets in this crime was his intricate and close connections with senior Malaysian government officials. One of those officials had authority to sign off on 1MDB business decisions, such as the bond deals Ng and Leissner successfully pursued in their conspiracy with Low.

One of those reportedly within Low’s power base is none other than Malaysian Prime Minister Najib Razak. It is also understood by those close to the case that Leissner had been actively cultivating relationships with Razak and others in his inner circle for some time. Leissner could have initiated connections with Razak on his own, but it is doubtful he would have made it as far without Low.

According to Malaysian sources, shortly after Razak came to power in 2009, Goldman Sachs’s application to begin fund management and corporate finance was approved in the country. In parallel, 1MDB, which had formerly been an investment fund set up by the Terengganu government-owned oil-rich state, was taken over by Najib. Low himself was already firmly entrenched in that deal, having been an advisor and known experienced dealmaker who had long advised the Terengganu Investment Authority on its deals.

Among the deals Ng and Leissner were able to secure with Low’s help were three 1MDB bond offerings for Goldman Sachs in 2012 and 2013. Goldman itself earned $593 million fees for its part in raising a total of $6.5 billion for those three deals. Ng and Leissner each received major bonuses from Goldman for their parts of the contracts, as well as illegal kickbacks from Low himself.

In commenting about Leissner and Goldman Sachs’ role in working with 1MDB, Wong Chen, an opposition member of Malaysia’s parliament, clearly saw something wrong with the connections. He said in a recent interview that, while “There’s no law against bankers meeting with heads of state,” he felt “That’s a bit too cozy, a bit too overly generous.”

Goldman Sachs has not been charged in the case for any direct complicity, though that could be coming. What is clear is that Leissner and Ng could not have done much of what they have done without the clear complicity of the firm to some extent, regardless of comments they have made that they had reviewed what Leissner was doing and found it compliant with appropriate legal requirements.

Goldman’s links to the U.S. Government are also deep, including its former CEO Hank Paulson’s stint as Secretary of the Treasury under George W. Bush starting in 2006. That makes possible connections between Goldman and other powerful allies of the United States, such as Saudi Arabia, Israel, and the Mossad, all of which have been linked to attempts to destabilize and manipulate the Malaysian government, all the more credible.

U.S. Federal prosecutors refused to comment further on this case other than what was revealed in their press release about it.

Goldman Sachs, itself currently not charged in the Malaysian case, has also recently found itself involved in several more criminally-suspicious ventures and has a very long history of criminal and unethical activity that it usually gets away with or pays small fines for. Hardly a year has gone by in the last two decades in which Goldman Sachs has not been fined for at least some of its many crimes. Following are just a very few items from a very long rap-sheet.

  • In 2002 it was fined $1.65 million by the industry regulatory body NASD (now FINRA) for failing to preserve e-mail communications.
  • In 2003 it paid $110 million as its share of a global settlement by ten firms with federal, state and industry regulators concerning alleged conflicts of interest between their research and investment banking activities.
  • Also in 2003, it paid $9.3 million in fines and disgorgement of profits in connection with federal allegations that it failed to properly oversee a former employee who had been charged with insider trading and perjury.  
  • In 2004 Goldman was one of four firms each fined $5 million by NASD for rule violations relating to trading in high-yield corporate bonds; Goldman also had to make restitution payments of about $344,000.
  • In 2005 the U.S. Securities and Exchange Commission (SEC) announced that Goldman would pay a civil penalty of $40 million to resolve allegations that it violated rules relating to the allocation of stock to institutional customers in initial public offerings.
  • Also in 2005, it paid a fine of $125,000 to NASD for violating rules relating to the sale of restricted securities during initial public offerings. Shortly thereafter, it was fined $140,000 by NASD for late and/or inaccurate reporting of municipal securities transactions.
  • In 2006 Goldman was one of 15 financial services companies that were fined a total of $13 million in connection with SEC charges that they violated rules relating to auction-rate securities. In another case relating to auction-rate securities brought by the New York State Attorney General, Goldman was fined $22.5 million in 2008.
  • In July 2010 the SEC announced that Goldman would pay $550 million for its role in the massive Abacus Fund fraud of shorting the very junk mortgages it was promoting as AAA investments. Britain's Financial Services Authority also fined the company £17.5 million for that particular scam.
  • In 2016, Goldman Sachs admitted its guilt in the 2008 financial crisis it helped orchestrate and execute and agreed to pay $5.06 billion for its role in a scheme that made trillions vanish into various rabbit holes. None of its executives went to jail for their roles in orchestrating the greatest financial fraud of all time.
  • In August 2018, the Federal Reserve fined Goldman $36.3 million in a case where an employee stole confidential information from the Federal Reserve Bank of New York. The individual pleaded guilty to stealing government property. Besides the Federal Reserve fines, Goldman Sachs also paid a separate $50 million fine to New York State regulators for its part in the matter.

On October 14, 2018 it won an important legal dispute with Libya’s sovereign wealth fund, when a corrupt court ruled that Goldman did not exercise undue influence with the fund. The case, which alleged the banking firm had taken advantage of an inexperienced group of investors in the country’s Libyan Investment Authority, an organization set up in 2006 to invest Libya’s oil wealth shortly after long-standing international sanctions were lifted. That followed the U.S.-EU forced removal of secular Libyan ruler Muammar el-Qaddafi and the installation of Saudi-CIA-Mossad controlled Islamic militants. As a matter of record, Goldman did help convince the fund to make investments deemed unsuitable for a Sovereign Wealth Fund, pocketed over $200 million in fees for its services, and left the fund with over $1 billion in losses as a result—which is pretty typical for Goldman Sachs and the types of crimes it often gets away with.

Goldman Sachs is not just another Wall Street bankster, it is a key part of a well managed international criminal enterprise that connects the CIA, Mossad, Saudi Arabia, the Russian Jewish mafia and a cadre of billionaires heavily invested in the war industry. 

In March 2012 Goldman executive director Greg Smith published a telling op-ed in the New York Times announcing his departure from what he called a “toxic and destructive” environment at the firm, saying he could "no longer in good conscience identify with what it stands for."

With Donald Trump in the White House it is likely that Goldman Sachs will continue to stand for greed and evil and will continue to get away with most of its crimes.