Perhaps few will have been surprised to hear the recent news that Goldman Sachs’ fall guy, Tim Leissner, is queuing up (amongst several thousand other hopefuls) to receive a pardon from US President Trump having been painstakingly brought to justice over the course of a decade of investigations into the record 1MDB theft of billions from the Malaysian public.
He is merely taking a leaf out of the book from the guy at the top, prime minister Najib Razak. Also like Najib, in doing so he has demonstrated his continuing access to large sums of money to expend on lawyers to perform endless applications for delay and other special favours, despite having supposedly surrendered all the proceeds of his crimes.
Given that the US system of justice appears to have suddenly become as nakedly open to accusations of ‘undue influence’ as the “Third World sh**hole countries” the US President so openly denigrates, that pot of money could look to be pivotal.
Back in 2020, Trump immediately pardoned the wealthy Republican fundraiser, Elliott Broidy, for his greedy attempts to sabotage the ongoing US investigations into the scandal (accepting payments from Jho Low and acting to assist a Chinese state spy ring in the process), whereas the more modest player on his team, Nancy Lum Davis (of Asian background) served the sentence. Likewise, it is so far only the Malaysian Goldman Sachs banker, Roger Ng, who has seen the inside of a cell.
However, the ex-banker is not putting all his eggs in that one basket. There are other pleas which have delayed and sought to mitigate his sentence as he, like Najib, seeks the kid glove treatment and believes he deserves it.
Leissner has gained sympathy, certainly from the DOJ, for turning star witness in the case and testifying against Ng. However, given that Ng is the only criminal prosecution to have resulted from the case so far and the enormous fines and civil asset seizures largely resulted from basic anti-money laundering investigation work, it is arguable that Leissner’s main contribution was to add colour to the narrative.
The fact of what Jho Low, Najib and Goldman Sachs and their co-conspirators did is there in the black and white printouts from the banking transactions. It was published by the DOJ in their original civil asset seizure filings long before Leissner was picked up.
Yet, it seems that the extremely light sentence that was finally meted out to the banker at the end of last year, after five years of delays and postponements, is not sufficient reward in his view. While Leissner is trying to get off the hook entirely he has meanwhile also sought to delay the enforcement of his sentence – now for the third time, until February 16th.
Moreover, he has started lobbying to change the location of his incarceration from a low security category facility on the East Coast of the United States, where he was brought to justice, to one in Sunny Southern California. This happens to be where his now divorced family lives in a grand residence that he secured with stolen 1MDB money.
His ex-wife (model Kimora Lee Simmonds) apparently shows no intention of surrendering the 25 million dollar mansion that Leissner has admitted in court that he purchased using stolen 1MDB related cash passed to him via the Kuwaiti Sheikh Sabah who is now himself serving a jail sentence of ten years in his own country for agreeing to act as a front for Najib and Jho Low.
Worse, Leissner acknowledged in court when giving testimony against Roger Ng that no one at the Department of Justice has asked him to forfeit this asset that is rightly belonging to Malaysia. One assumes his cooperation in nailing his former colleague Roger Ng has bought that leniency at Malaysia’s expense. This was the dialogue as he testified in court:
Q And the FBI and the Department of Justice, they let you
live in that mansion after your arrest, right?
A [Leissner] Yes, I lived there.
Q They let you keep the mansion, right?
A They haven’t forfeited that mansion.
Q They didn’t forfeit it, right? As you sit here today, it’s still not forfeited, right?
A That’s correct. [Roger Ng Trial, Testimony of Tim Leissner]
Shares worth $400 Million Dollars plus
And this brings us to another matter relating to unreturned Malaysian money. Leissner and his former family are still squabbling with the DOJ as to who should benefit from the hundreds of millions of dollars worth of Celsius shares (a Chinese soft drinks company) that Leissener also bought into using 1MDB stolen funds.
The shares have leapt in value over the period from being worth just $3 million to over $400 million. That might look like a bit of silver lining for Malaysians, could they be hopeful of seeing the well-informed investment returned.
However, it has emerged that Leissner’s Ex reckons the money is owed to her; not only that, her own previous Ex (an American ‘Hip Hop artist’ called Russell Simmonds) thinks some should also go to him!
When the duo originally made this seemingly preposterous claim back in 2021 the DOJ was robust in its rebuttal. A company in their name had been, Nu Horizons, had indeed been used by Leissner to hold the c 3.3 million shares he had purchased using 1MDB cash. It was merely to disguise his ownership given they were the proceeds of his crime.
Therefore, detailed the rebuttal, neither the Ex nor the Ex’s Ex had put up the money to buy the lucky shares: they had merely provided the cover to hide the ill-gotten assets, meaning they were by no means deserving of any of them:
“the only payment towards the purchase of the Celsius Shares was a wire transfer from an account held by another entity, Asian Sports Ventures HK, which was personally arranged by defendant Leissner. Thus, it is evident that neither Nu Horizons nor Petitioner [Russell Simmonds] gave anything of value in exchange for the Celsius Shares necessary to qualify as a purchaser” [Government rebuttal of Russell Simmonds claim to the $400 million Celsius Shares Nov 2023]
However, the duo have persisted, even though Simmonds had exited his share of the front company in 2018 before he realised it was sitting on a gold mine. They both want their cut and have claimed they had made the original investments back in 2015. This despite the fact that Leissner had already poured millions into the model’s ‘Baby Phat’ venture (he testified that he bought 70% of it with the stolen money).
The persistence appears to have paid off, as once again the DOJ looks set to carve a lenient deal towards them in a settlement that would also give the department, which has already exacted massive fines from Goldman Sachs, a nice slice of the money. Nothing to Malaysia is so far mooted, although previously the proceeds of confiscated assets were returned.
It should not be forgotten either that from the statements produced in court it seems evident that some $170 million is still missing from the overall equation following the sale of Leissner’s 1MDB funded company Midas Commodities on the day after the 2018 election. This is money that has apparently never been accounted for and the evidence suggests Leissner has it waiting for him in Central European tax havens, once he has finished his soft prison sentence.
The story of 1MDB has thus gradually evolved from a promising narrative of US enforcement bringing white-collar criminals to rightful justice to a more tawdry looking tale of bargaining, double standards and departmental greed.
Meanwhile, the most salient admissions of all in Mr Leissner’s testimony were quietly put to one side by the Department of Justice, once Goldman Sachs had agreed to pay a bonus inspiring record fine of $2.9 billion to the US authorities.
The claim by their star witness, made in court, which the DOJ simply failed to probe further was this:
“During the course of the conspiracy, I conspired with other employees and agents of Goldman Sachs very much in line of its culture of Goldman Sachs to conceal facts from certain compliance and legal employees of Goldman Sachs, including the fact that Jho Low, who is identified as Co-Conspirator Number 1 in the information, was acting as a intermediary for on behalf of Goldman Sachs, 1MDB, and Malaysian and Abu Dhabi officials”
Leissner went on during his court testimony to specifically name four senior Goldman Sachs bankers who definitively knew, and agreed to keep secret, that the officially ‘Red Flagged’ Jho Low was the main player behind the bond deals which had raised record profits for the bank (meaning record bonuses all round).
These included Andrea Vella the head of capital markets and investments who he describe as the most senior role to be paid on 1MDB transactions. “He was really, I would say, the deal captain” Leissner explained. Vella was already the subject of fraud allegations from the Libyan Investment Authority at the time, which had lost huge sums of money on investments managed by Goldman Sachs.
And yet, no-one further up the ladder at Goldman Sachs or any colleague of Leissner and Ng has ever been pursued over this admitted conspiracy, of which Leissner plainly has evidence. Vella escaped with the loss of his job and a ban by the Federal Reserve from any further engagement in the banking industry. There was no fine or admission of wrongdoing required from the wealthy banker who had scooped fat bonuses from ripping off Malaysia.
The other colleagues and seniors, who could plainly make what Leissner described as an ‘Asian Conclusion’ about what was going on (bribes to officials), were left to continue as before.
Therefore, whilst Malaysian corruption has been taken very seriously (and rightly so) the appetite to tackle US and other versions of the same disease appears to have subsequently and very publicly collapsed.