The much delayed sentencing of the former Goldman Sachs Southeast Asia head, Tim Leissner, looks set to finally take place at the end of this month, 29th May.
Leissner apparently provided much useful detail to the US Department Of Justice (DOJ) after finally pleading guilty to his role in the multi-billion dollar 1MDB fraud.
He had, after initial hesitation, agreed to cooperate following his arrest in June 2018, shortly after the May election that turfed his acknowledged protector Najib Razak from office.
Given Leissner’s role as a cooperating witness, the DOJ last week entered a lengthy plea to the judge in this case (Judge Brodie of the Eastern District of New York) emphasising the help the banker provided in supplying information that nailed the guilt of his fellow Goldman banker, Roger Ng, and has informed the cases against the fugitive Jho Low, his boss Najib and wife Rosmah, their colleagues in 1MDB’s management and several actors in the Gulf.
In return for this useful assistance and Mr Leissner’s agreement to surrender up what the DOJ assesses as being assets worth in the region of $300 million (accrued from his share of the profits from this crime) the DOJ’s lawyers have petitioned the judge to sentence Leissner lightly, instead of the maximum of life imprisonment.
However, while making their plea for leniency in favour of Mr Leissner (his information could well form the basis for a brand new case announced last month against a further unnamed co-conspirator) prosecutors have yet to respond to a request for restitution from those self-same funds to be made to the actual whistleblower in this case, the Swiss businessman Xavier Justo.
Xavier Justo Claims He Was A Victim of Leissner’s Conspiracy
Under US law, if Mr Justo can demonstrate that he suffered losses as a victim of the 1MDB conspiracy then he should be the first party entitled to compensation from the enormous amount of money that has now been frozen by the courts.
He has therefore placed a petition before the court for the restitution of damages he suffered as a result of the retaliation he suffered. (Investigators supporting Justo’s case believe that the confiscated assets are in fact worth just shy of $400 million not the $300 million cited by the DOJ).
In seeking to promote Justo’s case, his lawyers have taken some issue with the DOJ’s painting of Leissner as their key cooperating witness, compared to Justo’s own key role.
In doing so they have dug deep into the Goldman Sachs banker’s lesser known later collaboration in Jho Low and Najib’s further thefts and money laundering long after the scandal was exposed.
The facts now demonstrate that the collusion between Leissner and Jho Low went well beyond June 2016, the date the DOJ launched its asset seizures and a full year after Justo had himself been jailed in Bangkok in direct retaliation for exposing corruption at the fund in early 2015.
In short, the US authorities did not rely on Tim Leissner to launch those 1MDB investigations and asset seizures, rather the information had come from Justo over three years before Leissner turned witness.
Indeed, it is now clear that Leissner continued to participate in criminal money laundering related to 1MDB throughout the two years following that DOJ announcement, right up to the point of his arrest after the fall of Najib.
Yet, whilst Leissner has so far suffered only the removal of some his criminal proceeds and continues to live in a Beverly Hills mansion funded by criminal proceeds, Justo suffered 18 months imprisonment in Bangkok and financial ruin for no crime at all.
It is therefore Justo’s contention that Leissner by collaborating with the conspiracy for all that time and assisting in the cover-up contributed to the harm done to him and now owes him restitution under US law.
1MDB Conspirators Were Anxious To Discredit Whistleblowers
It is clear that Xavier Justo’s arrest and imprisonment was orchestrated by the 1MDB conspirators in order to discredit him and silence media coverage.
He was the original 1MDB whistleblower who provided a trove of data obtained from the fund’s joint venture partner, PetroSaudi International, where he was a former director, to the editor of this news site.
Sarawak Report’s explosive series of articles entitled Heist of the Century was published on 28th January 2015. Leissner in his testimony as confirmed that those involved in the thefts from 1MDB, who included himself, saw this publicity as a deadly threat.
The data contained the first hard evidence of the massive thefts of over $5 billion from the troubled Malaysian fund and triggered the DOJ investigation launched after the Sarawak Report editor was interviewed by the FBI the following March.
However, the story placed Xavier Justo, who had moved to Thailand, in immediate danger owing to the fact he was identified by PetroSaudi as the source of the devastating leaks.
By June 2015 he had been made subject to arrest by the Thai authorities on charges trumped up by PetroSaudi’s directors and orchestrated by the Malaysians, who portrayed him in the Malaysian media as a lying swindler, who had doctored company emails in order to commit blackmail under false pretences via articles in Sarawak Report.
Justo was then jailed for a year and a half, in excruciating circumstances in Bangkok’s notorious central prison, from where PetroSaudi director Patrick Mahony personally extorted him into issuing false confessions that he had indeed forged the evidence published by Sarawak Report.
Meanwhile the 1MDB scandal raged and the Najib government battled to deny that any money had gone missing from the fund that was directly controlled by the prime minister. In fact, all the key conspirators, including Tim Leissner, had stolen tens of millions from the fund.
After he was finally released, Justo was banished by Thailand for a hundred years, forcing him to sell off his business, a newly developed resort complex on Koh Samui, for a nominal amount.
Papers submitted by Justo to the US court state that in the course of this ordeal the Swiss businessman lost over $18 million (interest taken into account).
The statement deposited on Thursday challenges Leissner’s status as a reformed individual who was only involved in a white collar crime, saying he was fully engaged in the conspiracy where the perpetrators had decided that Justo’s false incarceration was vital for the cover-up.
Leissner – ‘There From The Very Beginning To The Very End’
Justo’s deposition points out Goldman Sachs’ involvement in the 1MDB conspiracy began well before the bank was engaged in raising a notorious $6.5 billion in bonds under the guise of so called power purchase and investment projects during 2012 and 2013.
Leissner and Roger Ng had met Jho Low in Sarawak back in 2008 and had learnt of his connections to Najib. With an eye to future prospects, say Justo’s lawyers, Leissner has testified that he agreed that Goldman Sachs would support Jho Low in his role as advisor to 1MDB’s predecessor fund, the Terengganu Investment Authority for a nominal fee.
Going forward, Leissner leveraged Goldman Sachs’ involvement to provide crucial credibility for 1MDB’s rampant borrowing. In return, the bank believed it was protected by Najib’s enormous personal power in Malaysia:
“In reality, [Leissner] was an architect of the 1MDB scheme—helping to establish 1MDB’s predecessor; devising the original bond fraud; and facilitating the ongoing cover-up of the scheme as a whole. By his own sworn admissions, Mr. Leissner participated in the scheme for nine years, leveraging the might of his co-conspirators Jho Low and Najib Razak—specifically, their political clout and ability to squash any investigation into 1MDB to shield him personally and the scheme as a whole.”
The original bond fraud concerned the five billion ringgit ($1bn) bond raised for the TIA through local banks in early 2009, from which Jho Low was able to skim over $140 million by gaining preferential advance sales channelled through his own companies.
The Goldman bankers believed the fraudsters would be shielded, as Leissner has previously testified, thanks to Najib’s powerful position at the head of a political party that appeared to hold permanent political power.
This all took place in advance of the first so-called joint venture with PetroSaudi in September 2009, whereby the fund (by then reconstituted as 1MDB) invested that borrowed money only to see the whole lot disappear into the bank accounts of Jho Low and the PetroSaudi directors, Tarek Obaid, Prince Turki and Patrick Mahony.
By 2012, as Leissner has admitted in plea deal testimony to the DOJ, he had entered the bank directly into the next stage of the mega-scam by raising a further $6.5 billion through three more bond issues, this time run solely through Goldman Sachs which underwrote the notes and distributed them to private clients, thereby concealing the deal from scrutiny on the open market
Leissner had arranged for Najib and Jho Low to meet with the bank’s CEO, Lloyd Blankfein, in New York in November 2009, despite the fact that by that date the bank’s compliance department had placed a ‘Red Alert’ against Jho over his unexplained wealth.
In his testimony at the trial of Roger Ng, Lessner’s now convicted junior colleague, the banker detailed how he and Ng had met with Jho Low and the 1MDB’s top managers in early 2012 and had conspired in advance over how they planed to steal the bulk of the money raised by those Goldman bonds and how they would distribute the proceeds amongst themselves and protectors like Najib.
Goldman Sachs would itself make $600 million dollars from the wildly inflated fees it charged for handling the suspicious bond offers.
A Conspiracy To Silence Sarawak Report And Xavier Just
Besides his involvement from the start in assisting Jho Low’s criminal schemes, Justo’s lawyers argue the top US banker was also engaged in the nefarious cover-up that deprived Justo of his liberty and ruined him financially in a bid to discredit the exposes by Sarawak Report and later news reports.
Leissner has fully admitted that negative publicity was one of the biggest concerns of the 1MDB conspirators, given they had planned to cover up their thefts by floating the fund and using the proceeds to pay off debts:
“Indeed, Mr. Leissner testified repeatedly at Mr. Ng’s trial that one of the largest threats to the scheme was “criticism in the press and questions from the press” around 1MDB’s transactions. The “highly critical” media attention was a “recurring” subject of concern with Mr. Leissner and his co-conspirators…. Mr. Leissner further testified that he and his co-conspirators attempted to discredit journalist Clare Rewcastle Brown’s articles in the well-known Sarawak Report that threatened the 1MDB scheme through counter-narratives and other counter-measures.” [Court Submission by Xavier Justo]
Justo’s lawyers therefore argue that, whether by directly assisting PetroSaudi and Najib over his arrest in Bangkok or by simply keeping silent, Leissner formed part of the conspiracy to jail and discredit Justo, despite knowing that Sarawak Report was publishing the truth about thefts he himself was party to.
For that reason, under the US laws of restitution, profits confiscated from Leissner must be used to compensate Justo.
Leissner Assisted Jho For Profit Till Najib’s Last Day In Office
There is further evidence to show that, far from stepping back, Tim Leissner continued to be heavily involved in 1MDB’s money laundering schemes and cover-ups, in return for huge kickback payments to himself, long after the DOJ exposed the fraud in 2016.
The banker had already been sacked by Goldman Sachs in January of that year after he attempted to obtain an account for Jho Low despite the Malaysian fraudster having been barred as a suspect client. Yet he continued clandestinely to assist in laundering cash to pay 1MDB debts and fund Jho Low’s attempts to purchase an off-shore bank.
This later stage of the fraud involved the further billions raised by Najib through the inflation of public contracts handed to Chinese state companies in 2016/17 (the East Coast Rail Link and two pipeline contracts). The Chinese companies had agreed to secretly channel back the money through Jho Low’s proxies.
From September 2016 to August 2017 over one billion dollars was forwarded by the Chinese company CCCC into accounts at the Chinese ICBC Bank in Kuwait belonging to companies fronted by a son of the prime minister, Sheikh Sabah Jaber Al-Mubarak, but controlled by Jho Low.
Under the guise of the Sheikh, Jho Low employed the cash to cover pressing debts after being barred from the global banking system and in an attempt to buy his own off-shore bank. Tim Leissner played a lucrative role in those transactions.
For example, in September 2016 a €10 million option was purchased in the name of Sheikh Sabah in a company called Blackfish belonging to Tim Leissener in Mauritius. That payment was traced to Jho Low’s Thai based proxy, Phengphian Laogumnerd.
Leissner then, in apparent collaboration with Jho Low, used Blackfish to buy a further option in Century Bank Corporation, owned by a Qatari Sheikh, Ghanim Bin al-Sa’ad, also in Mauritius. Phengphian Laogumnerd became Chairman of the bank.
In December 28th 2016 Al Mouniratyen International, one of Jho Low’s proxy companies funded by the kickbacks channelled to Kuwait, sent €372 million to Century Bank, presumably in an attempt to fulfil the option and complete the purchase of that bank.
However, the bid collapsed after Leissner himself applied to sit on the board of the bank and the Mauritian authorities rejected him, apparently owing to his by then notorious association with 1MBD. The money was returned to Kuwait on 3rd January 2017 .
It appears Mauritius then investigated Leissner’s ownership of another company, Khaleesi International, which on 29th February 2017 was sent €145 million by the same proxy Kuwait company, Al Mouniriatyn, for a bogus bitumen contract. These funds were again retuned owing to intervention by the authorities.
It emerged from the trial of Roger Ng that Leissner then re-named Khaleesi International, Midas Commodity Agents Ltd on March 31st 2017. He went on to open a new account for the same company in the Bahamas.
On 17th April 2017 Al Mouniriatyn again paid the amount of €145 million to Midas Commodity Agents’ new Bahamas account.
This time the transaction was made successfully although, since no bitumen was ever exported to Kuwait, Al Mouniriatyn’s nominal owner, Sheikh Sabah, made a pretence of demanding the money back and instigating legal action (which went nowhere, according to his later trial judgement in Kuwait).
With that money Leissner paid €39 million to 1MDB in order to assist the fund in making a coupon payment on one of the bonds he himself had raised at Goldman Sachs. It represents a clear instance of his continuing collaboration in the conspiracy to cover up the thefts from 1MDB.
Records further show the ex-Goldman banker retained the remainder of that cash and transferred some €106 million to Midas Commodities Delaware LLP which he used to buy his Beverley Hills house and make other investments.
Such enormous profits well outstripped what Leissner has admitted to receiving as a result of the earlier bond deals which, by comparison, was a mere $73.4 million.
During these continuing cover-up conspiracies involving Jho Low and Leissner Justo languished first in jail in Bangkok and later on bail in Switzerland, facing prosecution for releasing data (that case is now dropped). His ability to work in the financial sector had been ended.
As Justo’s lawyers have pointed out, it was only on the very day of the Malaysian election, as Najib’s power to protect him crumbled, that Leissner finally severed his ties and sought to liquidate the company that had received so much money from Malaysia.
On May 9th 2018 he sold Midas (valued at $170 million) to a Hong Kong company, Newlands Inc, which was ostensibly owned by the same Qatari businessman, Ghanim Bin al-Sa’ad, who had attempted to sell Leissner the Mauritian Century Bank Corporation.
There remain questions over to what extent Jho Low himself was connected to that purchase and what happened to the purchase money which Leissner himself appears to have not declared.
Perhaps answers may emerge from the up-coming further 1MDB related prosecution where Leissner may very well turn out to be a key DOJ witness once again.
Yet, despite the fulsome praise and thanks offered by DOJ lawyers as part of Leissner’s plea deal, it was clearly not he who exposed 1MDB. The DOJ have Xavier Justo to thank for that, whilst Leissner kept up his criminal activity until the day the game was up