As highlighted here, in November 2018 the DOJ announced criminal Foreign Corrupt Practices Act (and related charges) against individuals associated with Goldman Sachs – including Roger Ng (a former managing director at Goldman Sachs) – for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company. The individuals were also charged with conspiring to launder billions of dollars embezzled from 1MDB.
Unlike co-defendant Tim Leissner (the former Southeast Asia Chairman at Goldman Sach and Participating Manager Director) who pleaded guilty and is cooperating with the government, Ng is putting the DOJ to it burden of proof.
As highlighted here, in September 2021 U.S. District Court Judge Margo Brodie (E.D.N.Y) denied Ng’s motion to dismiss to certain charges paving the way for a rare FCPA trial.
The trial began earlier this week.
As reported by Law360.
“In opening arguments, Brent Wible of the U.S. Department of Justice’s Fraud Section told the jury that Ng and his cohorts hatched a “brazen” and illicit plan to siphon billions of dollars from three Goldman-underwritten bond offerings from Malaysian sovereign wealth fund 1MDB — bonds that were meant to fund Malaysian public development projects.
“The stolen money was used to pay bribes to government officials and to pay those involved in the scheme, including the defendant,” Wible said.
Goldman made approximately $600 million in fees and revenue for facilitating the corrupted bond deals, which resulted in substantial bonuses for Leissner and Ng in addition to the funds they embezzled from the deals, according to the government.
Ng “saw an opportunity to use his position at Goldman to make money by lying and cheating,” Wible said.
Wible said Ng funneled money through an offshore shell company controlled by him and his wife and that millions of dollars from the fraud passed through bank accounts in New York.
Investors would only buy the 1MDB bonds if they knew a respected lender like Goldman was involved, Wible told the jury. The involvement of Low — whose connections to high ranking government officials in Malaysia and Abu Dhabi were central to the alleged scheme — had previously raised red flags within the investment bank in prior dealings, so Ng and Leissner worked to conceal his role from others at Goldman, the prosecutor said.
Wible said the conspirators used personal email accounts to conduct their misdeeds. In 2015, when the fraud began to unravel, Ng deleted four of his email accounts in an attempt to cover up the crime, Wible said.
Ng attorney Marc Agnifilo of Brafman & Associates PC told the jury a different story, saying it was Leissner, Ng’s boss, who was in league with Low, and ran Goldman’s part in the scheme. Ng was just a “small cog in this huge machine called Goldman Sachs.”
“This is a massive crime and there are lots of guilty people, but he’s not one of them,” Agnifilo said, gesturing toward Ng.
Leissner pled guilty and is expected to be the government’s star witness at trial. Low remains at large and professes his innocence.
Agnifilo said that as far back as 2010, when Low was trying to get Goldman to be his bank, Ng told others at Goldman that he didn’t trust Low. Evidence will show that Ng said, “You’ve got to be careful with this guy. Be sure to scope him out,” according to Agnifilo.
Leissner was already an immoral man, Agnifilo said, but when he got involved with Low, his immorality “was set on fire,” and “suddenly he wants everything.”
Leissner was actually married to two different women, twice, and forged divorce papers, Agnifilo said. Leissner also had a romantic liaison with 1MDB’s general counsel, Agnifilo said, in just one example of Leissner using relationships to gain a unique and personal advantage.
“Leissner uses intimacy to get what he wants and what he wants at the end of the day is money,” Agnifilo said. “He doesn’t need Roger.”
Agnifilo said the supposedly embezzled funds that went to Ng were actually money that his wife was owed from business ventures in China that she had with Leissner’s wife.”