Malaysia's former PM is found guilty in first trial over fraud scandal - Daily Mail

Malaysia's former PM is found guilty in first trial over multi-billion-dollar 1MDB fraud scandal and now faces decades in jail

• Former Malaysian PM Najib Razak was found guilty today in the first of two trials 
• It relates to the looting of sovereign wealth fund 1Malaysia Developmend Berhad
• Billions of dollars were stolen and spent on everything from property to artwork 

By Afp

Published: 07:09 BST, 28 July 2020 | Updated: 08:33 BST, 28 July 2020

Malaysia's former prime minister Najib Razak was found guilty today in the first of two trials over the multi-billion-dollar 1MDB scandal.

Najib could now face decades in jail after being convicted on all charges in the case related to the looting of sovereign wealth fund 1Malaysia Development Berhad.

Billions of dollars were stolen from the investment vehicle and spent on everything from high-end property to a private jet, luxury yacht and artworks by Claude Monet and Vincent van Gogh, while investment bank Goldman Sachs also became embroiled in the scandal. 

Anger at the looting contributed to Najib's shock defeat at a general election in 2018, and he was arrested and hit with dozens of charges following his defeat.

Malaysia's former PM Najib Razak (centre) arrives at the Kuala Lumpur High Court complex in the Malaysian capital today where he was found guilty of all seven charges in a fraud case

Najib Razak and his wife Rosmah Mansor wave outside the prime minister's office in Kuala Lumpur in 2009. Rosmah is also facing criminal charges over the scandal 

Police load confiscated items into a truck in Kuala Lumpur in 2018, when the investigation into Najib Razak was re-opened after he lost power at a general election 

Timeline of Malaysia's 1MDB scandal 

April 2009: Najib is sworn in as Malaysia's sixth prime minister. 1MDB is formed in July with Najib as advisory board chairman.

July 2015: A report by The Wall Street Journal alleges that nearly $700million of 1MDB money has been channeled into Najib's personal bank accounts. Najib denies the allegations. A whistle-blowing website is blocked and two newspapers are suspended over their reporting on the scandal. 

January 2016: Attorney General Apandi Ali clears Najib of any wrongdoing, saying the money in his bank accounts was a donation from Saudi Arabia's royal family.

July 2016: The U.S. Justice Department initiates moves to recover more than $1billion that investigators say was stolen from 1MDB by associates of Najib and used to buy assets.

May 2018: Najib's National Front coalition, which had ruled Malaysia since independence in 1957, loses in a general election. 

May-June 2018: Najib and his wife, Rosmah Mansor, are banned from leaving Malaysia, and the new government reopens the 1MDB probe. Police seize cash and thousands of luxury items, from jewelry to handbags, from premises linked to Najib, worth up to £200million.

July 2018: Najib is charged with three counts of criminal breach of trust and one count of abusing his power. 

August-September 2018: Najib pleads not guilty to three more counts of money laundering and asks for a trial. Many more charges follow, including tax evasion and tampering with an official report into 1MDB.  

October 2018: Najib's wife, Rosmah, pleads not guilty to money-laundering and tax evasion charges.  

December 2018: Malaysia files criminal charges against Goldman Sachs and two former executives over bond sales it organized for 1MDB. 

April 2019: Najib's first graft trial starts.

July 2019: Riza Aziz, Najib's stepson and producer of 'The Wolf of Wall Street' film, pleads not guilty to charges of laundering money belonging to 1MDB. Charges are later dropped. 

February 2020: The graft trial of Najib's wife starts.

March 2020: A new government is sworn in, including Najib's party, after the previous ruling alliance falls apart.     

July 2020: Najib is found guilty in his first corruption trial, days after a court orders him to pay 1.69billion ringgit (£310 million) in unpaid taxes. Separately, the government reaches a $3.9 billion settlement with Goldman Sachs in exchange for dropping all charges and claims against the U.S. investment bank. 

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In this first trial, Najib faced seven charges of criminal breach of trust, money laundering and abuse of power for allegedly illegally receiving nearly $10million from former 1MDB unit SRC International. He had pleaded not guilty.  

The counts of abuse of power and criminal breach of trust are punishable by up to 20 years in jail each, while the money-laundering charges are punishable by up to 15 years each.

The amounts involved in Najib's first case are small compared to those in his second and most significant trial, which centres on allegations he illicitly obtained more than $500million. That trial began in August last year.   

His wife Rosmah Mansor also faces charges of money laundering and tax evasion, to which she has pleaded not guilty.   

About 16 months after it began, the Kuala Lumpur High Court delivered the verdict in Najib's first trial, which centred on the transfer of money from a former 1MDB unit, SRC International, into his accounts.

Najib had vehemently denied wrongdoing.

But Judge Mohamad Nazlan Mohamad Ghazali took apart all the arguments put forward by his defence, and found him guilty on the seven charges he faced.

'In conclusion, after considering all the evidence in this trial, I find the prosecution has successfully proven the case,' the judge told the court.

The US Justice Department launched its own probe after claims that stolen Malaysian public money was laundered through the US financial system, and has filed lawsuits seeking some $1.8billion in assets allegedly purchased with the cash.

The department said more than $4.5billion was stolen from 1MDB between 2009 and 2015 by high-level officials at the fund and their associates.

Tens of millions of dollars were used in 2012 by Najib's stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film The Wolf of Wall Street, starring Leonardo DiCaprio.

Hundreds of millions were also used to purchase high-end real estate in Beverly Hills, New York and London.

A Monet painting bought for $35million, a Van Gogh for $5.5million, a $35million Bombardier jet, a $100million stake in EMI Music Publishing, and a $250million yacht were also ticked off the shopping list.

Whistleblowers say Low Taek Jho, a jet-setting Malaysian financier close to Najib but with no official position, helped set up 1MDB and made key financial decisions, while the fund was also closely overseen by Najib himself. 

Protests erupted in Kuala Lumpur when the scandal first emerged in 2015. But Malaysia's attorney general initially cleared Najib of wrongdoing, saying the money in his account was a donation from Saudi Arabia. 

However, a new government re-opened the investigation after Najib's shock election defeat in 2018, and items were loaded into a truck after police searched the former PM's home in Kuala Lumpur. 

Dozens of charges were announced in 2018 and 2019, with the first of the verdicts announced today.  

Sentencing was not handed down straight away. The 67-year-old will likely appeal and he may not be sent to jail immediately. 

If his conviction is upheld, he will also be barred from political office for several years. 

Dozens of Najib supporters, gathered outside the courthouse for hours, called for the former premier to be freed and were seen offering prayers.  

Malaysia's former prime minister Najib Razak (pictured at a news conference announcing the findings of the MH370 investigation in 2015) was found guilty today in the first of two trials over the multi-billion-dollar 1MDB scandal

Supporters of former Malaysian prime minister Najib Razak wait outside the Kuala Lumpur High Court complex today. The 67-year-old politician had claimed his innocence  

Tens of millions of dollars were used in 2012 by Najib's stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film The Wolf of Wall Street, starring Leonardo DiCaprio (pictured in the movie) 

Najib, who became PM in 2009 and was in power during the investigation into missing flight MH370, had insisted he was ignorant of the transactions.

The defence team portrayed Najib as a victim and instead sought to paint Low, a key figure in the scandal who has been charged in the US and Malaysia, as the mastermind.

But judge Ghazali said the idea that Low had tricked Najib was 'far-fetched', and also dismissed the argument the ex-leader believed the money in his account was a donation from Saudi royalty. 

Low, whose whereabouts are unknown, maintains his innocence. 

Prosecutors insisted Najib was in control of the 1MDB unit, SRC International.

'The conviction sends a strong message that leaders will be held accountable for wrongdoings in office,' opposition lawmaker Charles Santiago said. 'He can't steal people's money and expect to walk free.' 

The return of Najib's party to power as part of a coalition in March followed the collapse of Mahathir Mohamad's reformist administration.  

There were concerns that this could impact Najib's trials - particularly after 1MDB-linked charges against Riza were unexpectedly dropped in May. 

Prosecutors also dropped dozens of charges against Najib ally Musa Aman, the former leader of Sabah state. 

Malaysia had charged Goldman Sachs and some current and former staff, claiming large amounts were stolen when the bank arranged bond issues for 1MDB.

But the two sides agreed to a $3.9 billion settlement last week in exchange for charges being dropped. 

Among the purchases linked to ill-gotten gains from the Malaysian investment fund was this 300ft yacht Equanimity, later renamed Tranquility  

Items were piled high in shopping trolleys after police seized them during the investigation into Najib Razak in 2018

How Malaysia's 1MDB corruption scandal unfolded 

Malaysia's extraordinary 1MDB corruption scandal allegedly saw top officials loot billions from state coffers and go on a worldwide spending spree - buying a $250million yacht and a painting by Van Gogh, and financing a Hollywood blockbuster.

Najib Razak, the then-prime minister, was a key figure in the plundering of sovereign wealth fund 1Malaysia Development Berhad (1MDB), and was convicted Tuesday in his first corruption trial linked to the fraud.

- What was 1MDB? -

1MDB was a state investment fund which Najib launched in 2009 shortly after becoming prime minister.

Its portfolio included power plants and other energy assets in Malaysia and the Middle East, as well as real estate in Kuala Lumpur.

The fund was closely overseen by Najib.

Whistleblowers say Low Taek Jho, a jet-setting Malaysian financier close to Najib but with no official position, helped set up 1MDB and made key financial decisions.

Concerns escalated in 2014 as 1MDB slid into an $11-billion debt hole, and intensifying public scrutiny revealed missing funds.

The scandal first came to light through the Sarawak Report news portal, and gained further traction in 2015 when The Wall Street Journal published documents showing Najib received at least $681 million in payments to his personal bank accounts.

- Rich living -

The US Justice Department launched its own probe after claims that stolen Malaysian public money was laundered through the US financial system, and has filed lawsuits seeking some $1.8billion in assets allegedly purchased with the cash.

The department said more than $4.5billion was stolen from 1MDB between 2009 and 2015 by high-level officials at the fund and their associates.

Tens of millions of dollars were used in 2012 by Najib's stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film 'The Wolf of Wall Street', starring Leonardo DiCaprio.

Hundreds of millions were also used, mainly by Riza and Low, to purchase high-end real estate in Beverly Hills, New York and London.

A Monet painting bought for $35million, a Van Gogh for $5.5million, a $35million Bombardier jet, a $100million stake in EMI Music Publishing, and a $250million yacht were also ticked off the shopping list.

- Political turbulence -

Najib desperately sought to contain the scandal, targeting critics and introducing repressive laws, but the allegations hit the popularity of his long-ruling coalition and contributed to a shock election defeat in 2018.

A new government headed by veteran politician Mahathir Mohamad, now aged 95, came to office on a wave of public anger, and re-opened investigations.

Najib was hit with dozens of charges, and his first trial over the scandal finally started in April last year.

But in February, the reformist alliance collapsed after bitter infighting, and a new coalition that included Najib's scandal-plagued party seized power.

There were concerns this could impact Najib's trials - particularly after 1MDB-linked charges against Riza were unexpectedly dropped in May.

- The trial -

But those fears proved unfounded after a judge Tuesday found Najib guilty of all seven charges in his first trial linked to 1MDB. He could now face decades in jail.

The case centred on allegations that 42 million ringgit ($9.9 million) was transferred to the 67-year-old's bank accounts from SRC International, a former unit of the fund.

His lawyers insisted he had no knowledge of the transfers and claimed that Low was the true mastermind behind the scam.

But Judge Mohamad Nazlan Mohamad Ghazali said the idea that Low had tricked Najib was 'far-fetched', and also dismissed the argument the ex-leader believed the money in his account was a donation from Saudi royalty.

It is not the most significant of the trials he is facing. That one began in August last year, with Najib accused of illicitly obtaining 2.28billion ringgit ($535million) from 1MDB.

 

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2020-07-28 06:09:12Z
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