Sarawak Report: US Prosecutors now targeting bigger fish over 1MDB?

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The most plausible reason for such a postponement is that DOJ prosecutors have now obtained the cooperation of both men in going after the big fish in Goldman Sachs.

A strange development went virtually unreported a few days ago in New York. At a scheduled hearing in a court in Brooklyn on July 6th, two convicted Goldman Sachs bankers were due to receive their sentences for their part in the 1MDB conspiracy and theft.

However, instead of announcing the expected jail time on Roger Ng and Goldman’s former Southeast Asia boss, Tim Leissner, the judge postponed the sentencing and extended the bail terms for both men.

Roger Ng will not hear his sentence till November, reported Bloomberg. Tim Leissner, who pleaded guilty and acted as the key prosecution witness against Ng, has had his sentencing delayed until February 2023. Both men walked free, for now.

Notably, the judge declined to give any reason whatsoever for this highly unusual decision, which Sarawak Report suspects could signal a significant development.

The most plausible reason for such a postponement is that DOJ prosecutors have now obtained the cooperation of both men in going after those in the highest echelons of America’s arguably most powerful and influential financial institution, whose greed and complicity were laid bare in the course of the earlier trial.

It is plain that both men have more information than came out at the trial about who knew what further up in the bank. They would prove valuable witnesses, in a case where the bank itself has already pleaded guilty to criminal actions but so far tried to pin all the blame on these lowly players.

Ng and Leissner were undoubtedly guilty of conspiring with Jho Low and Najib Razak, receiving giant backhanders from the thefts they helped to facilitate. However, compelling evidence from the trial confirmed what was obvious from the start, which was that these relatively junior fall-guys were operating within a culture at the bank that encouraged each and every one of their actions within a tacit framework.

Leissner went out of his way to cultivate decision-makers and drum up business in political circles in Malaysia, hiring Roger Ng as a known ‘connector’ in the business. The bosses approved at Goldman Sachs, praising his huge deals with outlandish commissions, despite the obvious suspicious circumstances.

Moreover, during the trial Leissner specifically named senior figures who he said knew exactly what was going on (such as ex-Asia boss Andrea Vella) and who guided their junior through the process of getting the corrupted 1MDB bond deals past the compliance procedures of the bank.

The jury unanimously agreed that the evidence stood the test for conviction as far as the man on trial was concerned. By extension, the men who knew and helped them at the bank and who received enormous record bonuses as a consequence are likewise implicated.

Then there is the question of the highest echelon at the bank who scrutinised and supervised these deals directly. A whole raft of senior people clearly knew their 2013 record bonus owed to dodgy dealings at the expense of a nation and had the opportunity to intervene but didn’t.

It raises questions over a culture of corruption at Goldman Sachs, questions which have been raised often enough before in response to other scandals, including the world financial crash which was largely provoked by deceptive actions by the bank.

In 2018 the reforming PH government in Malaysia issued charges against 17 bankers linked to the Goldman Sachs subsidiaries involved in 1MDB, including then head of the international bank in London, Mike Sherwood. Those charges were dropped by the successor coup regime in return for a quick fix pay-out of $2.5 billion from the bank (the destination of the money has been classed an Official Secret).

But this story goes right to the very top of the bank, as Sarawak Report and others have often pointed out. The decision to raise the massive bond deals bringing the largest ever margins of profit recorded by the bank was passed by the top Investment Committee comprised of the most senior executives on the board. All those individuals accordingly received huge bonus payments at a time the rest of the financial world was struggling with recession.

At least one of the class action suits against Goldman Sachs by its own shareholders has named the former CEO Lloyd Blankfein, present CEO David Solomon, and ex-President Gary Cohn as responsible parties in their claims of negligence and worse.

Blankfein suddenly and unexpectedly resigned from his post shortly after the fall of the BN/UMNO regime, having denied for years in the face of mounting evidence over 1MDB that there had been any wrong-doing on the part of the bank or indeed himself. SR has surmised he realised at last the game was up. He stated he left was because he had decided to leave his job ‘on a high’.

For the bank itself the game was most certainly up however. As an institution it has pleaded guilty to criminal breaches of the law and paid huge fines to the Department of Justice and Securities Commission in America under a so-called Deferred Prosecution Agreement, as well as its pay-outs to Malaysia.

Yet, the power of Goldman Sachs bankers to avoid personal retribution for the actions of their bank is legendary indeed. Its former employees have penetrated positions of political power across the western world (President Macron and PM hopeful, Rishi Sunak being just two examples).

The cultish clubbiness of those who have survived the punishing induction process to higher levels in the bank and relentless cultivation of those in public office has led to rightful concerns that this financially self-interested institution exerts unhealthy influence in the corridors of power.

Dubbed the Masters of the Universe many believe there is a sense of dangerous impunity at the bank with its top managers believing themselves untouchable by the law.

So, if this is the widely recognised problem with this bank could 1MDB turn out to be the case that breaks its hold?  For prosecutors and the wider public cutting the powerful money men back down to size would seem long overdue. For any ambitious prosecutor it would be a scalp akin to Al Capone.

Consider what we already know. Jho Low was a toxic individual post-2010, red-flagged by the bank’s compliance unit against any engagement with Goldman Sachs. The bond issues agreed with 1MDB were predicated on specific denials that he had any role in the process whatsoever despite all the evidence to the contrary and the knowledge of senior bankers.

Yet, back in 2009, the trial heard, Jho Low together with Najib met the top man, Lloyd Blankfein in New York at the behest of Tim Leissner to discuss the possible investments for the new 1MDB venture itself.

Moreover, a devastating report by the Financial Times which has never been denied revealed that later, at the height of the multi-billion-dollar bond negotiations in December 2012, Jho Low personally visited Blankfein at his New York offices – twice.

One one occasion he had a private audience the FT has reported. Even more damningly, on the other occasion he was accompanied by Mohammed al Husseiny, the CEO of the IPIC subsidiary Aabar, which as everyone knows was the ‘co-guarantor’ enmeshed in each of the three bond issues Goldman raised for 1MDB. Mohammed al Husseiny has been convicted in Abu Dhabi of corruption and receiving kickbacks.

There can be little other conclusion but that the head of Goldman Sachs was therefore of the dynamics behind 1MDB’s bond issues and of Jho Low’s integral involvement as a highly suspicious character supposedly banned from doing business with the bank.

If the convicted duo, Ng and Leissner (who pleaded guilty) have been allowed months of delay in their sentencing and continued bail in the United States one can equally conclude that they have agreed to cooperate with the prosecutors on the case, and that those prosecutors have now taken the decision to go for the bigger fish and to finally deal with those behind a bank ‘gone rogue’. – Sarawak Report