1MDB is one of the biggest frauds, financial frauds in history. We woke up one morning
in July, 2015, to realize that almost $700 million had gone into the prime minister's account. The disappearance of billions of dollars from Malaysia's state fund is one of the biggest financial scandals, not just in Malaysia,
but around the world. Of the $8 billion that
1MDB raised via bond sales, it's alleged more than half was stolen. That's different from a stock fraud or pumping up a stock, and then
cashing out on your options. This is actual theft of money. 1MDB in Malaysia had been
actually some kind of a piggy bank for various players. The stolen money went
to buy a private jet, luxury real estate, artworks
by Picasso and Monet, as well as jewelry for Mr. Najib's wife. Up to 300,000 taking
to the streets calling for Najib's head. They are fed up with the government that they believe is chronically corrupt. The projects that were developed by 1MDB were sold as development projects that
would be to the benefit of everyone, but it was later realized that, you know it costs the country
probably more than it helped. This was cash grab by a handful of people who had put themselves in the
position to make themselves rich. It was a betrayal of the
people on a grand scheme. I arrived at the 1MDB expose through a sort of process of having started to report on the consequences of Malaysian corruption on the ground that was the destruction
of the Borneo rainforest. As I looked into it, it was plainly caused by political corruption. There was no logical or sensible reason if you were governing the country for the benefit of the
democratic electorate that you would just rip out a jungle. That was done for pure profit for a handful of decision-makers. So I started looking at that story because it was an enormous story with huge global ramifications. British journalist Clare
Rewcastle Brown grew up in the Malaysian state of Sarawak. In 2010, she set up the Sarawak Report to expose corruption in
the country of her birth. I found that I could reach the public in Malaysia and get through what had been a very oppressive media environment, to actually get information
to ordinary people in Malaysia about how their country was being run. 1MDB was presented by Najib Razak, the new prime minister, as
a wonderful opportunity. He was going to raise huge sums of money for this so-called sovereign
wealth fund to invest, he was also the finance
minister of course, as well as the prime minister. So he would be investing the money in all sorts of money-making activities that would then be beneficial to Malaysians in need of development. But all that money was disappearing, there was no accountability and by the time I looked at it, we're talking about 2014, there had been five years
of massive fundraising and then a total black hole as far as where that money had gone. I think we were talking
about an $11 billion deficit, unaccounted deficit by 2014. There were certain characters associated with the fund who were also
dabbling in my area of interest which was the rainforest state of Sarawak. Particularly a young
Chinese advisor to the fund and to the prime minister, named Jho Low. Jho Low in particular had been gaining an international reputation for himself as a massive spender,
catching the headlines in New York, Las Vegas,
and indeed Hollywood. He was creating a stir. He was the highest spender
in all the top nightclubs and yet had no explanation,
really, for his wealth. As a lot of you in this room know, I like to plan my evenings and make sure that I always
go to the best parties. So those of us who are
looking at this from Malaysia were wondering whether
his advisory role at 1MDB where all these billions
were not being accounted for, might be connected to this acquisition of extraordinary wealth by a 26-year-old who'd come from nowhere. I first got my teeth into this story with the launch of a major, $100 million Hollywood movie, 'Wolf of Wall Street' which is all about a bunch of crooks who'd stolen money
and were spending it. The real question is
this, was all this legal? Absolutely not. Which is exactly what the funders of the movie were doing
of course through 1MDB. Because I was able to join some dots and I realized that the Malaysia
money funding this film, more than likely came from this fund because the producer of
the movie was none other than the son of the
Malaysian prime minister, who was in control of the fund that was losing all this money. Wow, this is an incredible,
incredible honor. Riza Aziz and Jho Low even got a shout-out at the Golden Globes. I want to thank Joey, Riz, and Jho thank you for being not only collaborators but taking a risk on this movie. So the 1MDB scandal
could not have happened on just a localized basis. It was necessary for the ringleader, the alleged, you know,
an accused ringleader, this Jho Low to find
accomplices and people that he could deal with in other
countries around the world. As you look back and
unwind the development of 1MDB and who the early partners were, there was clearly a certain amount of collusion from interested parties in Saudi Arabia and the
United Arab Emirates. The PetroSaudi data, which was passed to me by a whistleblower,
former director of the company, it showed the internal
workings behind the original setting up of the first
joint venture of 1MDB with this Saudi shell company that was purporting to be an oil company. Right at the start of this extended scandal, you see the emails which show a bunch of young men agreeing
to pull off this scam. But at the end of the
letter, they said, of course we would also be willing to act as a front if that would be useful for
some of your operations? So it was all there, along with the data that showed
the transfers of money. The initial deal, the
PetroSaudi bond deal and joint venture, siphoned nearly $2 billion out of the fund. That was the first information
I got hard data on. Jho Low has been charged
in the United States with being basically the
ringleader of this fraud. The guy who orchestrated it, even though he had no title within 1MDB. I've been asked whether or not he's like a brilliant guy or, you
know, criminal genius? I don't think so. It's more, he's financially
very sophisticated. He understood, according
to the charging documents in the U.S. how to setup shell companies and how to hide the
identity of certain entities and to create that first
level of obfuscations. People like Jho Low and some
other individuals were able to construct an elaborate set of deceptions and shell companies that
sounded just like real companies in order to divert the money,
launder it, cover it up, and make it appear as
though everything was fine. Jho Low was very smart
about covering his tracks. One of the first things he did, right when 1MDB was getting
up and running in 2009, Jho Low basically established an account at a bank or a company in the
Seychelles called Good Star. After, you know, the
deal was struck to invest in this joint venture with sign-off from the 1MDB board, a mysterious loan obligation appears that $700 million of the first $1 billion committed to this
venture is going to go to pay back a loan from PetroSaudi, the U.S. government discovered
that there was no such loan, but under the excuse
that a $700 million loan had to be paid immediately out
of the first billion dollars, a transfer took place from 1MDB's primary bank to, it
was said, it was described, it was going to go to PetroSaudi, but in fact, it went to this small shell company called Good Star. And the ownership was hidden, it was a like one share, a bearer bond, that was owned by Jho Low. But none of that was obvious. So he was smart enough to
disguise that first transaction and have a cover story
that Good Star was actually the name of the venture. Perhaps the most famous
example of Jho Low's ability to disguise, hide, or obscure the source or the destination of the funds was an outfit that he, you
know, one of his colleagues came up with called Blackstone Asia Real Estate which sounds remarkably like a, you know, very successful U.S. private
equity firm; Blackstone. But it has nothing to do
with the real Blackstone. It was clearly, it was
just a shell company that used the name
Blackstone to sort of give it a level of credibility. You know, this happened
over and over again coming up with bogus
names that sounded good or that sounded like,
or might be similar to so that the banks who were unknowingly basically passing along money from one company to another it wouldn't raise any obvious red flags. Today, the Department of Justice has filed a civil complaint
seeking to forfeit and recover more than $1
billion in assets associated with an international
conspiracy to launder funds stolen from 1 Malaysia
Development Berhad or 1MDB. What makes this such a potent and devastatingly successful
theft, if you will, is basically he had the support of the government of Malaysia in the
form of the prime minister. If somebody has transgressed the law then they have to face the music. The money spread around the world, and a great deal of it,
was laundered in the U.S. You can see this
extraordinary constellation of luxury properties and
homes in Beverly Hills, in New York and in London. Famous pieces of art, luxury boats, gambling sprees in Las Vegas. It's one thing for us to
care about money being looted from people in countries around the world, but also when that
money's coming to the U.S. and coursing through our system, all this dirty money is
a major cause of concern. As pressure mounted on the Malaysian prime minister Najib Razak, he was ousted from power in May, 2018. The new prime minister Mahathir Mohamad, wins partly on a platform that
calls for an investigation into the missing billions from 1MDB. There are many charges that can be proven against those involved. Soon after the election, police raid properties linked to Mr. Najib and his wife, Rosmah Mansor, and seize hundreds of
boxes of luxury goods. We have sealed the bags, but we
know they contain money, and we know they contain jewelry. Police carted away 284 boxes containing luxury handbags and 72 bags stuffed with cash and jewelry. The haul, which authorities later value at $273 million, includes 567 handbags, 423 watches, 234 pairs of sunglasses, and 14 tiaras. In amongst the trinkets
was $29 million in cash. The couple maintain the luxury goods were gifts, and that the cash was political donations. The country and the people suffer. We must get hold of every cent that has been taken out from the country. After facing trial for
just some of the charges, Najib Razak has been sentenced to 12 years in prison and fined $50 million. He's appealing the decision. What do you say to those who say that you've acted
dishonestly about the funds? You know, you've been
called all sorts of things, including a thief. What's your response to that? There's no evidence of that. I mean, you cannot just,
you know, accuse somebody. But you have admitted
that the funds did end up in your accounts even though it was a donation from the Saudi government. Yeah. It's been,
it's been cleared, there's been no wrongdoing. There is an appeal process in Malaysia, which is extremely lenient
towards the rich and powerful and which continues for years. And so therefore Najib
continues to walk free and he indeed continues to vote in Parliament while his case is under appeal. The 1MDB case is far from over. It's spread to all corners of the globe. Jho Low is a fugitive and there's plenty of money still missing. Not to mention the
amount Malaysia is paying in interest on those
original shady bond deals. More than $11 billion of
debt racked up in five years. There are a lot of people, you know, when you talk about it, you know,
their eyes just glaze over. It's numbers that we're talking about. Hundreds of millions, billions of dollars, financial concepts that not
all people are familiar with. Ultimately when this
type of thing happens, the people who benefit are just
that, that cream at the top the kleptocrats and the people
who lose, the people who remain impoverished are
the people who were like, nominally intended to benefit from the development of the oil wells or the mining concession or whatever. The scandal has revealed just
how easily money laundering can take place and how
far corruption can reach. The complicity of the
global financial system continues to be exposed. The department filed
criminal charges in New York against the Goldman Sachs group and its Malaysian subsidiary, charging each with conspiracy to violate the anti-bribery provisions of the foreign corrupt practices act. Malaysian and Goldman agreed on a settlement of $3.9 billion. Financial scandal after financial scandal involving big banks. To be able to divert that much money from basically a government
sponsored enterprise and then use a network of global banks is just astounding.
So we going to blame it all on Jho Low?
Means our Political representative memang clueless?
We elect them, does that make us dumbo jumbo ?
this fella sure brought 'opportunities/benefits of networking' to a new height
Legend.
Imagine if he uses his skill and networking experience and ability to do great things. He can even be a good politician or minister. Sometimes can cheat some money but as long as not $4 billion scale I think, we'll be fine.