1MDB
entry · 2009–2018 · status: archived · DOJ called it "the largest kleptocracy case"
summary
1Malaysia Development Berhad (1MDB), Malaysia's sovereign wealth fund, was looted of approximately $4.5 billion between 2009 and 2014. The U.S. Department of Justice has called it the largest kleptocracy case ever brought by the U.S. government. The principals: then-Prime Minister Najib Razak; financier Jho Low; and Goldman Sachs, which raised the $6.5 billion in bond issuances that supplied the looting fund and earned ~$600 million in fees in the process.
the receipts
- $681 million deposited directly into Najib Razak's personal bank account from 1MDB-linked sources between 2011 and 2013. Najib's defense — that the funds were a personal donation from a Saudi prince — was rejected at trial.
- Najib Razak: Convicted July 2020 on seven charges (criminal breach of trust, money laundering, abuse of power). Originally sentenced to 12 years and a fine of RM 210 million (~$50 million). Currently serving a reduced six-year sentence under a 2024 royal pardon process.
- Jho Low: Indicted by Malaysian and U.S. prosecutors. Remains a fugitive — believed to be in China.
- Goldman Sachs: Pled guilty to one count of conspiracy under the Foreign Corrupt Practices Act in 2020. Paid a $2.9 billion U.S. settlement and a separate $3.9 billion Malaysian settlement — combined ~$7 billion. Two senior bankers (Tim Leissner, Roger Ng) charged personally; Leissner pled guilty 2018, Ng convicted 2022.
- The Wolf of Wall Street connection: 1MDB-linked funds financed the production of the 2013 Martin Scorsese film The Wolf of Wall Street via Red Granite Pictures, founded by Najib's stepson Riza Aziz. Looted public funds laundered through a Hollywood film about Wall Street fraud.
- Recovered: ~$5+ billion globally through asset forfeiture (yacht, paintings, real estate, jewelry — including a $27.3 million pink diamond purchased for Najib's wife). Significant portions remain unrecovered.
why this matters to PRIOR
1MDB demonstrates the architecture in its purest international form: a sovereign wealth fund (designed to invest national resources for the public good) was used as a private piggy bank by a sitting prime minister, with a Wall Street investment bank serving as the structuring agent. Goldman raised the bond issuances knowing — internal communications surfaced this — that the funds were being misdirected. The bank paid a $7 billion combined settlement and continued operating without significant operational consequence. The institution paid the fine. The institution kept the franchise.
"a sovereign wealth fund laundered through a hollywood movie about wall street fraud. the irony was not the point. the laundering was."