1Malaysia Development Berhad scandal

rdf:langString 1Malaysia Development Berhad scandal

rdf:langString The 1Malaysia Development Berhad scandal, often referred to as the 1MDB scandal or just 1MDB, describes a corruption, bribery and money laundering conspiracy in which the Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB) was systematically embezzled, with assets diverted globally by the perpetrators of the scheme. International in scope, it implicated political, banking and entertainment figures and institutions and led to criminal investigations in several countries. The 1MDB scandal has been described as "one of the world's greatest financial scandals" and declared by the United States Department of Justice as the "largest kleptocracy case to date" in 2016. In 2015, a document leak reported in The Edge, Sarawak Report, and The Wall Street Journal showed that Malaysia's then-Prime Minister Najib Razak had channeled over RM 2.67 billion (approximately US$700 million) into his personal bank accounts from 1MDB, a government-run strategic development company. The alleged mastermind of the scheme, Jho Low, was central in the movement of 1MDB funds internationally through shell companies and offshore bank accounts. The U.S. Department of Justice later found that more than US$4.5 billion was diverted from 1MDB by Low and other conspirators including officials from Malaysia, Saudi Arabia and the United Arab Emirates. These were used to purchase luxury items and properties, including superyacht Equanimity, and finance the American film company Red Granite Pictures and its production of The Wolf of Wall Street. 1MDB funds supported lavish lifestyles for Low, Najib and his wife Rosmah Mansor, and established Najib's stepson Riza Aziz in Hollywood. Attempts were also made for embezzled funds to be put towards political donations and lobbying in the United States. The revelations became a major political scandal in Malaysia, triggering protests and backlash. After several Malaysian investigations were opened, Najib responded by dismissing several of his critics from government positions, including his deputy Muhyiddin Yassin and attorney-general Abdul Gani Patail. Charges against Najib were subsequently dismissed. Among Najib's critics was former ally and Malaysia's fourth Prime Minister Mahathir Mohamad, who chaired the Malaysian Citizens' Declaration, bringing together political figures and other organisations in calling for Najib Razak's resignation or removal. The Malaysian Conference of Rulers called for prompt investigation of the scandal, saying that it was causing a crisis of confidence in Malaysia. Outside of Malaysia, investigations into financial and criminal activity relating to 1MDB opened in at least six countries. According to its publicly filed accounts, 1MDB had nearly RM 42 billion (US$11.73 billion) in debt by 2015. Some of this debt resulted from a $3 billion state-guaranteed 2013 bond issue led by the American investment bank Goldman Sachs, which had been reported to have received fees of up to $300 million for the deal, although the bank disputes this figure. Nevertheless, Goldman Sachs was charged under the Foreign Corrupt Practices Act and agreed to pay over $2.9 billion in a settlement with the U.S. Department of Justice (DOJ). American rapper Pras, former Goldman Sachs chairman Tim Leissner and fundraiser Elliott Broidy were among those charged in the United States in connection with 1MDB. After the 2018 election, the newly elected prime minister, Mahathir Mohamad, reopened Malaysian investigations into the scandal. The Malaysian Immigration Department barred Najib and 11 others from leaving the country, while the police seized more than 500 handbags and 12,000 pieces of jewellery estimated to be worth US$270 million from property linked to Najib, the largest seizure of goods in Malaysian history. Najib was later charged with criminal breach of trust, money laundering and abuse of power, while alleged mastermind Jho Low, by then an international fugitive, was charged with money laundering. Najib was subsequently found guilty of seven charges connected to SRC International, a 1MDB subsidiary, and was sentenced to twelve years imprisonment. In September 2020, the alleged amount stolen from 1MDB was estimated to be US$4.5 billion and a Malaysian government report listed 1MDB's outstanding debts to be at US$7.8 billion. The government has assumed 1MDB's debts, which includes 30-year bonds due in 2039. In August 2021, the United States had recovered and returned a total of US$1.2 billion of 1MDB funds misappropriated within its jurisdiction, joining countries such as Singapore and several others which have also initiated recovery or that have already repatriated smaller recovered amounts.