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Monday, May 20, 2024 | Back issues
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Malaysian embezzlement scandal puts Goldman banker away for 10 years

The sentence given to Roger Ng is just two years lighter than that of the former Malaysian prime minister.

BROOKLYN (CN) — A federal judge gave a 10 year prison sentence Thursday to former Goldman Sachs banker Roger Ng for his role in the theft of billions of dollars from a Malaysian public fund, one of the largest financial schemes in history

Said to have made $35 million off corrupt bond deals, Ng was the only banker to go to trial over the massive scheme siphoning money from 1Malaysia Development Berhad, otherwise known as 1MDB. The plot rose to the ranks of then-Prime Minister Najib Razak, who received a 12-year sentence in Malaysia for his participation. 

Another Goldman banker, Ng’s former boss Tim Leissner, testified against Ng after pleading guilty to charges. A third defendant who is widely understood to have masterminded the criminal plan, Low Taek Jho, known as Jho Low, remains at large. 

Defense attorneys argued that Ng, who maintains his innocence, had been made the fall guy, one of about two dozen co-conspirators implicated by the government, many of them high-up government officials or senior to Ng at Goldman. 

Before his May 2019 extradition to the United States, the now 50-year-old Ng spent six months in jail in Malaysia. The squalid conditions nearly cost Ng his life, his attorney said during the sentencing hearing: Ng developed severe leptospirosis from exposure to rat urine, and malaria from mosquitoes that swarmed his small, concrete cell with a latrine that overflowed when it rained. 

A court-appointed evaluator found that Ng, whose full name is Ng Chong Hwa, suffers from post-traumatic stress disorder.

U.S. District Chief Judge Margo K. Brodie agreed that the “horrific” state of Ng’s incarceration warranted a sentence reduction but said prison time could not be avoided, noting that it was difficult to grasp the scope of the 1MDB heist. At least $4.5 billion is believed to have been looted from the fund in total, money that could have gone to infrastructure in Malaysia like better roads and energy systems. 

“This is one of the biggest financial crimes in the history of the world,” said Brodie, an Obama appointee, citing a need to deter “crimes of pure greed like this one.” 

Jurors convicted Ng of conspiring to violate the Foreign Corrupt Practices Act on two counts, via bribery and circumventing accounting controls, as well as conspiring to launder money from the scheme. 

Three bond deals raised $6 billion in just two years, with billions paid to government officials in Malaysia and Abu Dhabi, earning millions for Goldman Sachs. As part of a deferred prosecution agreement, the bank paid nearly $3 billion, while Goldman Sachs Malaysia pleaded guilty to violating U.S. anti-bribery laws. 

“These sorts of crimes threaten confidence in democracy and in government,” Brodie told Ng. “The only explanation for your conduct is greed.” 

Brodie did not order Ng to pay a fine since financial records don’t show that Ng could pay one. The issue of forfeiture remains open. Ng handed over the full contents of 11 bank accounts to the Malaysian government before his extradition, raising questions for Brodie about whether she has the authority to order him to disgorge $35 million as requested by the government.  

Marc Agnifilo, Ng’s attorney, plans to appeal. He told reporters after the hearing that he was disappointed and surprised by the sentence. 

“The judge acknowledged all our arguments,” said Agnifilo, of the firm Brafman & Associates. “I thought I reached her, I thought she really heard me, and she came out with what she came out.” 

Agnifilo had advised Ng to waive extradition and come to the United States, fearing he would die in the Malaysian prison cell, but the trial delay due to Covid made for a difficult five years for his client, the attorney said. 

Ng spoke to the court before Brodie handed down his sentence. 

“This has branded me an outcast, and I know I will struggle to support my family,” Ng said. “I am embarrassed. I am ashamed. I have failed, and I have burdened them.” 

Ng said his 10-year-old daughter, to whom he reads on nightly video calls, has faced “prejudice” in school because of his tarnished reputation. 

“It destroys me that my family will be further punished because of me,” Ng said.  

Tenzin Norgay, a monk from the Buddhist temple where Ng prays, sat in the first row of the gallery and also addressed the judge on Ng’s behalf. 

“I see him as a very good person with a good heart, and that’s all I have to say,” Norgay said. 

Malaysia had created the fund known as 1MDB in 2009 as a way to stimulate economic growth, but the project was quickly infiltrated by a multibillion-dollar embezzlement scheme whose proceeds were laundered around the world. 

As traced in court papers, the money flowed among other places through art auctions, luxury New York City real estate and Hollywood production companies, one of which produced the Oscar-nominated Martin Scorsese film “The Wolf of Wall Street.”

Behind it all was the fugitive Jho Low, whose dealings are detailed in the 2018 book “Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood and the World.” 

During his two weeks on the stand, Leissner described a February 2012 meeting at Low’s London apartment where the bribery plan was hatched. Low charted out the plan by hand on a piece of paper, Leissner said, and promised the schemers — including Ng — kickbacks. 

As part of his guilty plea, Leissner was ordered to forfeit $43.7 million. The banker is married to Kimora Lee Simmons, a model and TV personality with whom he has a son. His sentencing is set for September. 

U.S. Attorney Breon Peace called the sentence both a just punishment for Ng and a warning to would-be corporate criminals. 

“Roger Ng was a central player in a brazen and audacious scheme that not only victimized the people of Malaysia, but also risked undermining the public’s confidence in governments, markets, businesses and other institutions on a global scale,” Peace said in a statement. 

Ng was ordered to surrender on May 4. His attorneys plan to make an application for him to remain out on bail pending his appeal.

Follow @NinaPullano
Categories / Business, Criminal, Financial, International, Trials

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