1MDB is one of the biggest frauds,
financial frauds in history.
We woke up one morning in July, 2015, to realize
that almost $700 million had gone
into the prime minister's account.
The disappearance of billions of dollars
from Malaysia's state fund is one
of the biggest financial scandals,
not just in Malaysia, but around the world.
Of the $8 billion that 1MDB raised via bond sales,
it's alleged more than half was stolen.
That's different from a stock fraud
or pumping up a stock, and then cashing out on your options.
This is actual theft of money.
1MDB in Malaysia had been actually some kind of
a piggy bank for various players.
The stolen money went to buy a private jet,
luxury real estate, artworks by Picasso and Monet,
as well as jewelry for Mr. Najib's wife.
Up to 300,000 taking to the streets calling
for Najib's head.
They are fed up with the government
that they believe is chronically corrupt.
The projects that were developed
by 1MDB were sold as
development projects that would be to the benefit of everyone,
but it was later realized that, you know
it costs the country probably more than it helped.
This was cash grab by a handful of people
who had put themselves in the position to make themselves rich.
It was a betrayal of the people on a grand scheme.
I arrived at the 1MDB expose
through a sort of process of having
started to report on the consequences
of Malaysian corruption on the ground
that was the destruction of the Borneo rainforest.
As I looked into it, it was plainly
caused by political corruption.
There was no logical or sensible reason
if you were governing the country
for the benefit of the democratic electorate
that you would just rip out a jungle.
That was done for pure profit
for a handful of decision-makers.
So I started looking at that story
because it was an enormous story
with huge global ramifications.
British journalist Clare Rewcastle Brown grew up
in the Malaysian state of Sarawak.
In 2010, she set up the Sarawak Report
to expose corruption in the country of her birth.
I found that I could
reach the public in Malaysia
and get through what had been
a very oppressive media environment,
to actually get information to ordinary people in Malaysia
about how their country was being run.
1MDB was presented by Najib Razak,
the new prime minister, as a wonderful opportunity.
He was going to raise huge sums of money
for this so-called sovereign wealth fund to invest,
he was also the finance minister of course,
as well as the prime minister.
So he would be investing the money
in all sorts of money-making activities
that would then be beneficial
to Malaysians in need of development.
But all that money was disappearing,
there was no accountability
and by the time I looked at it,
we're talking about 2014,
there had been five years of massive fundraising
and then a total black hole
as far as where that money had gone.
I think we were talking about an $11 billion deficit,
unaccounted deficit by 2014.
There were certain characters associated
with the fund who were also dabbling in my area of interest
which was the rainforest state of Sarawak.
Particularly a young Chinese advisor to the fund
and to the prime minister, named Jho Low.
Jho Low in particular had been gaining
an international reputation for himself
as a massive spender, catching the headlines
in New York, Las Vegas, and indeed Hollywood.
He was creating a stir.
He was the highest spender in all the top nightclubs
and yet had no explanation, really, for his wealth.
As a lot of you in this room know,
I like to plan my evenings
and make sure that I always go to the best parties.
So those of us who are looking at this from Malaysia
were wondering whether his advisory role at 1MDB
where all these billions were not being accounted for,
might be connected to this acquisition
of extraordinary wealth by a 26-year-old
who'd come from nowhere.
I first got my teeth into this story
with the launch of a major,
$100 million Hollywood movie,
'Wolf of Wall Street'
which is all about a bunch of
crooks who'd stolen money and were spending it.
The real question is this, was all this legal?
Absolutely not.
Which is exactly what the funders
of the movie were doing of course through 1MDB.
Because I was able to join some dots
and I realized that the Malaysia money funding this film,
more than likely came from this fund
because the producer of the movie was none other
than the son of the Malaysian prime minister,
who was in control of the fund
that was losing all this money.
Wow, this is an incredible, incredible honor.
Riza Aziz and Jho Low even got a shout-out
at the Golden Globes.
I want to thank Joey, Riz, and Jho thank you
for being not only collaborators
but taking a risk on this movie.
So the 1MDB scandal could not have happened
on just a localized basis.
It was necessary for the ringleader,
the alleged, you know, an accused ringleader,
this Jho Low to find accomplices and people
that he could deal with in other countries around the world.
As you look back and unwind the development
of 1MDB and who the early partners were,
there was clearly a certain amount
of collusion from interested parties
in Saudi Arabia and the United Arab Emirates.
The PetroSaudi data, which was passed
to me by a whistleblower, former director of the company,
it showed the internal workings behind the original
setting up of the first joint venture of 1MDB
with this Saudi shell company
that was purporting to be an oil company.
Right at the start of this extended scandal,
you see the emails which show a bunch
of young men agreeing to pull off this scam.
But at the end of the letter, they said, of course
we would also be willing to act as a front
if that would be useful for some of your operations?
So it was all there, along
with the data that showed the transfers of money.
The initial deal, the PetroSaudi bond deal
and joint venture,
siphoned nearly $2 billion out of the fund.
That was the first information I got hard data on.
Jho Low has been charged in the United States
with being basically the ringleader of this fraud.
The guy who orchestrated it, even though
he had no title within 1MDB.
I've been asked whether or not he's like
a brilliant guy or, you know, criminal genius?
I don't think so.
It's more, he's financially very sophisticated.
He understood, according to the charging documents
in the U.S. how to setup shell companies
and how to hide the identity of certain entities
and to create that first level of obfuscations.
People like Jho Low and some other individuals were able to
construct an elaborate set of deceptions
and shell companies that sounded just like real companies
in order to divert the money, launder it, cover it up,
and make it appear as though everything was fine.
Jho Low was very smart about covering his tracks.
One of the first things he did,
right when 1MDB was getting up and running in 2009,
Jho Low basically established an account
at a bank or a company in the Seychelles called Good Star.
After, you know, the deal was struck to invest
in this joint venture with sign-off
from the 1MDB board,
a mysterious loan obligation appears
that $700 million of the first $1 billion
committed to this venture is going to go to
pay back a loan from PetroSaudi,
the U.S. government discovered that there was no such loan,
but under the excuse that a $700 million loan
had to be paid immediately out of the first billion dollars,
a transfer took place from
1MDB's primary bank to, it was said, it was described,
it was going to go to PetroSaudi,
but in fact, it went to this
small shell company called Good Star.
And the ownership was hidden,
it was a like one share, a bearer bond,
that was owned by Jho Low.
But none of that was obvious.
So he was smart enough to disguise that first transaction
and have a cover story that Good Star was actually
the name of the venture.
Perhaps the most famous example of Jho Low's
ability to disguise, hide, or obscure
the source or the destination of the funds
was an outfit that he, you know, one of his colleagues came
up with called Blackstone Asia Real Estate
which sounds remarkably like a, you know,
very successful U.S. private equity firm; Blackstone.
But it has nothing to do with the real Blackstone.
It was clearly, it was just a shell company
that used the name Blackstone to sort of give it
a level of credibility.
You know, this happened over and over again
coming up with bogus names that sounded good
or that sounded like, or might be similar to
so that the banks who were unknowingly
basically passing along money
from one company to another
it wouldn't raise any obvious red flags.
Today, the Department of Justice
has filed a civil complaint seeking to forfeit
and recover more than $1 billion in assets associated
with an international conspiracy to launder funds
stolen from 1 Malaysia Development Berhad or 1MDB.
What makes this such a potent
and devastatingly successful theft, if you will,
is basically he had the support of the
government of Malaysia in the form of the prime minister.
If somebody has transgressed the law
then they have to face the music.
The money spread around the world,
and a great deal of it, was laundered in the U.S.
You can see this extraordinary constellation
of luxury properties and homes in Beverly Hills,
in New York and in London.
Famous pieces of art, luxury boats,
gambling sprees in Las Vegas.
It's one thing for us to care about money being looted
from people in countries around the world,
but also when that money's coming to the U.S.
and coursing through our system,
all this dirty money is a major cause of concern.
As pressure mounted on
the Malaysian prime minister Najib Razak,
he was ousted from power in May, 2018.
The new prime minister Mahathir Mohamad,
wins partly on a platform that calls for an investigation
into the missing billions from 1MDB.
There are many charges
that can be proven against those involved.
Soon after the election,
police raid properties linked to
Mr. Najib and his wife, Rosmah Mansor,
and seize hundreds of boxes of luxury goods.
We have sealed the bags, but we know they contain money,
and we know they contain jewelry.
Police carted away 284 boxes
containing luxury handbags and
72 bags stuffed with cash and jewelry.
The haul, which authorities later value
at $273 million,
includes 567 handbags,
423 watches, 234 pairs of sunglasses,
and 14 tiaras.
In amongst the trinkets was $29 million in cash.
The couple maintain the luxury goods
were gifts,
and that the cash was political donations.
The country and the people suffer.
We must get hold of every cent
that has been taken out from the country.
After facing trial for just some of the charges,
Najib Razak has been sentenced to
12 years in prison and fined $50 million.
He's appealing the decision.
What do you say to those who say
that you've acted dishonestly about the funds?
You know, you've been called all sorts of things,
including a thief.
What's your response to that?
There's no evidence of that.
I mean, you cannot just, you know, accuse somebody.
But you have admitted that the funds did end
up in your accounts even though it was
a donation from the Saudi government.
Yeah. It's been, it's been cleared,
there's been no wrongdoing.
There is an appeal process in Malaysia,
which is extremely lenient towards the rich and powerful
and which continues for years.
And so therefore Najib continues to walk free
and he indeed continues to vote
in Parliament while his case is under appeal.
The 1MDB case is far from over.
It's spread to all corners of the globe.
Jho Low is a fugitive and there's
plenty of money still missing.
Not to mention the amount Malaysia is paying
in interest on those original shady bond deals.
More than $11 billion of debt racked up in five years.
There are a lot of people, you know, when
you talk about it, you know, their eyes just glaze over.
It's numbers that we're talking about.
Hundreds of millions, billions of dollars,
financial concepts that not all people are familiar with.
Ultimately when this type of thing happens,
the people who benefit are just that, that cream at the top
the kleptocrats and the people who lose, the people who
remain impoverished are the people who were like,
nominally intended to benefit
from the development of the oil wells
or the mining concession or whatever.
The scandal has revealed just how easily money laundering
can take place and how far corruption can reach.
The complicity of the global financial system
continues to be exposed.
The department filed criminal charges in New York
against the Goldman Sachs group
and its Malaysian subsidiary,
charging each with conspiracy to violate
the anti-bribery provisions
of the foreign corrupt practices act.
Malaysian and Goldman agreed on
a settlement of $3.9 billion.
Financial scandal after financial scandal
involving big banks.
To be able to divert that much money
from basically a government sponsored enterprise
and then use a network of global banks
is just astounding.