BROOKLYN (CN) — An “inexcusable” discovery failure is set to delay the landmark foreign corruption trial of former Goldman Sachs banker Roger Ng.
The 49-year-old is charged with conspiring to bribe officials in Malaysia and Abu Dhabi to get Goldman business deals with 1MDB, a fund set up in 2009 to benefit the people of Malaysia. In all, at least $4.5 billion was robbed from the fund, and investigators say Ng was among those who got kickbacks for his involvement.
Ng's trial kicked off earlier this month, but prosecutors revealed in a letter filed just after 2 a.m. on Wednesday that the government has not yet turned over roughly 15,500 documents, including records from email accounts and a laptop that belonged to Tim Leissner, Ng’s former boss who took the stand last week and is still on direct examination.
The papers were improperly held by a unit within the Department of Justice, when they were not in fact privileged, according to the government's letter.
“The error by the Privilege Team is inexcusable,” a team of assistant U.S. attorneys and trial lawyers wrote to the court, undercutting their report prior to jury selection that they had reviewed and released all documents in its possession.
Marc Agnifilo, Ng’s attorney, said his team was “utterly deceived” by the mistake and denied access to evidence that gets at the heart of his defense.
“This is as serious as it gets from our perspective,” Agnifilo said in court Wednesday.
Discovery timelines had already been a concern for Agnifilo, who raised issues with the protracted process during pretrial hearings. The night after opening arguments, the government turned over more than 120,000 pages of discovery. Agnifilo said that, due to Covid restrictions, he was able to take only one trip to Asia to prepare for trial in late 2021, and had to do so without hundreds of thousands of documents.
“At this point, the government has goaded us into moving for a mistrial. I’m not doing that yet,” Agnifilo said, adding that such a motion may be in the pipeline if, once “every stitch of evidence” is turned over, it appears the trial can’t fairly continue.
Agnifilo said he may also file a motion to dismiss the indictment based on evidence supporting his argument that the $35 million Ng is accused of getting from 1MDB actually came from separate business between Ng and Leissner’s respective wives.
Chief U.S. District Judge Margo K. Brodie agreed to adjourn the trial before Leissner’s direct examination begins, and to give Agnifilo as much time as he needs to review the new materials. She declined Agnifilo’s request to tell the jury the reason for the delay.
“It’s especially troubling to be sitting here … after I specifically asked the government whether or not all disclosures were made,” Brodie said.
The judge acknowledged that the proceedings can’t be postponed forever.
“I don’t know what the solution is going to be ultimately,” Brodie said, “but we’re going to take it one step at a time.”
Ng, whose full name is Ng Chong Hwa, is the only Goldman banker going to trial over the scandal encompassing 1Malaysia Development Berhard. Goldman Sachs Malaysia pleaded guilty to violating anti-bribery provisions of the Foreign Corrupt Practices Act, while its Manhattan-headquartered parent company paid $3 billion as part of a deferred prosecution agreement.
Leissner also pleaded guilty to bribery and money-laundering charges and forfeited $43.7 million in the process. He also had to give up shares now valued at around $200 million, Leissner said in court.
During his first day on the stand, Leissner gave an overview of the 1MDB heist reportedly masterminded by Malaysian businessman, and Ng’s fugitive co-defendant, Jho Low.
He has continued explaining to the jury in detail how he and Ng worked Low’s close ties with then-Malaysian Prime Minister Najib Razak, and government officials in Abu Dhabi, to close three bond deals between 2012 and 2013 that earned $700 million for Goldman.
Lured by the prospect of becoming “heroes” at Goldman, Ng and Leissner hid Low’s involvement from the investment bank, which had declined to take on the financier as a client because of his tabloid-famous lavish spending and parties with paid celebrities like Leonardo DiCaprio and Paris Hilton, and the inability to trace Low’s fortune.
On Wednesday, Leissner described a meeting in London where Low, full name Low Taek Jho, outlined the plan to bribe Najib and Sheikh Mansour bin Zayed Al Nahyan, a member of the royal family of Abu Dhabi.
The two had to be paid the same amount in bribes to approve Goldman deals, Low told Leissner and Ng — and Mansour “wouldn’t get out of bed for less than $100 million,” Leissner testified. The rest of the details would be firmed up later — but Low promised a cut to each of the bankers, Leissner said.
“Obviously this was an activity that, I certainly realized, was illegal,” Leissner said, and “had to be kept between the two of us.”
He and Ng used personal email accounts to conduct the illicit business, Leissner testified, and followed Low’s instructions at times not to use any names.
Follow-up meetings in Abu Dhabi, Los Angeles and New York City moved along the first 1MDB transaction, dubbed Project Magnolia, Leissner said.
Guaranteeing that deal on 1MDB’s behalf was the International Petroleum investment Company, an investment organization owned by the Abu Dhabi government. Leissner said he met with the organization’s CEO, Khadem al-Qubaisi, at the Emirates Palace hotel following the London meeting.
Leissner hand-delivered a letter from Najib to Qubaisi that was intended for Mansour — but he lied to Goldman and said he had met with the Sheikh himself.
For a separate meeting at the hotel L'Ermitage in Beverly Hills, Ng asked another Goldman employee to get him approval to stay at the hotel since it was co-owned by a “client,” but didn’t disclose that the client was in fact Low, according to emails shown in court.
Ng faces up to 25 years in prison if convicted on all three counts against him in the Eastern District of New York.
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