BROOKLYN (CN) — Roger Ng and Tim Leissner became heroes at Goldman Sachs for closing deals in Malaysia that earned $700 million for the investment bank in just six months.
With that prospect in mind, Leissner testified Wednesday, he agreed to a scheme to bribe top government officials in Malaysia and Abu Dhabi to win their support — and in the process siphon billions of dollars from 1MDB, a fund set up to benefit the people of Malaysia.
Leissner previously pleaded guilty to conspiring to launder money and to violate the Foreign Corrupt Practices Act. He has cooperated with the government leading up to the trial against Ng, 49, who faces up to 25 years in prison for similar charges and evading Goldman controls.
Ng, as former head of Goldman’s business in Malaysia, and Leissner, in charge of all of South East Asia, worked closely to obtain and carry out the illicit business, Leissner said.
“We were best friends,” Leissner said. “There wasn’t a day that we didn’t talk.”
Chatter always circled back to business, but it was all the same to Leissner: “He and I were living and breathing our work … our work was our life, basically.”
Ng’s demeanor, connections and insight into Malaysia moved business along, Leissner said. “He was a very likable banker who could open doors very easily.”
Leissner testified that he and his ex-wife pulled in $50 million to $60 million, while Ng — whose full name is Ng Chong Hwa — made $35 million off the deals, called Project Magnolia, Project Maximus and Project Catalyze. Leissner would later forfeit $43.7 million, and shares now valued at around $200 million, as part of his guilty plea.
Described earlier at trial by another Goldman employee as an aggressive businessman, Leissner, 53, admitted he didn’t tell the firm about the bribes paid as part of the three bond transactions with the 1MDB, short for 1Malaysia Development Berhad.
He also hid the fact that at the center of the bribery scheme was the exceedingly well-connected Malaysian businessman Jho Low, Ng’s co-defendant, who remains at large.
Low, whose full name is Low Taek Jho, gained tabloid fame for extravagant and star-studded parties and events, including in Las Vegas and New York City. He paid celebrities, models and musicians to attend, a marketing executive who planned approximately five of the multimillion-dollar blowouts testified.
Leonardo DiCaprio, Jamie Foxx, Kim Kardashian, P. Diddy, Fergie, Pharell, Ke$ha and Paris Hilton all appeared on guest lists.
Defense attorney Marc Agnifilo also pointed to eye-popping bar tabs that Low and his guests racked up at night clubs. One bill listed, among other high-end beverages, 65 bottles of Cristal for almost $100,000 and 43 bottles of Patron Silver for $17,500.
Low’s lifestyle in the public view, Goldman’s controls team declined to take him on as a client, citing him as a reputational risk and saying his massive fortune couldn’t be traced to legitimate sources.
But Low, with whom Ng first made contact as a potential client, was a necessary partner in crime thanks to his close connections with Malaysia’s then-Prime Minister Najib Razak and other influential figures, Leissner testified.
“There was no way we could get around Jho if we wanted to work with 1MDB,” Leissner said, even though Low had no formal role within the fund.
Leissner testified that, except for a few other employees whom Leissner said he could trust with the information, he and Ng decided not to tell Goldman about Low’s involvement.
Low, Leissner and Ng, among others, hatched the plan during a February 2012 meeting in London, Leissner said. Masterminding the deal, Low took out a sheet of white paper and drew two columns: one for Malaysia, one for Abu Dhabi. In each, he listed officials in the countries, close friends and associates, and wives of government officials, all of whom would have to be paid off to close the first deal, Project Magnolia.
“These are the people who had to be, he said, ‘taken care of,’” Leissner explained. “Jho said that without payments, we can forget this transaction completely.”
He said he and Ng also learned that they would make money on the deal. For Leissner, the bigger win was closing what he believed to be Goldman’s biggest-ever deal, even though it meant breaking the law.
“Regrettably, at that time in my life, I didn't care,” Leissner said. “I wanted to be a hero for Goldman Sachs."
Later, Low would direct transfers to and from offshore accounts opened by shell companies in the names of Liessner and Ng’s wives, Leissner said, but which the two bankers were in fact operating. As Leissner put it, “that was the money laundering part.”
Goldman Sachs paid nearly $3 billion as part of a deferred prosecution agreement related to the 1MDB scandal, while Goldman Sachs Malaysia pleaded guilty to violating anti-bribery provisions of the Foreign Corrupt Practices Act.
Agnifilo argued that his client is a scapegoat in one of the world’s largest financial scandals. “This is a massive crime, and there are lots of guilty people. He’s just not one of them,” Agnifilo, of the firm Brafman & Associates, said of Ng during opening arguments.
Direct examination of Leissner will continue when trial resumes next week.
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