Roger Ng, the former Goldman Sachs banker at the center of the multi-billion 1MDB embezzlement scandal, was sentenced to 10 years in prison on Thursday, placing a capstone on one of the largest and most bizarre financial frauds of the past decade.
A jury in Brooklyn, New York, found Ng, 50, from Malaysia, guilty of violating US anti-bribery laws, money laundering and illegally skirting Goldman’s accounting controls, after a seven-week trial.
Ng is the only Goldman banker to have been tried and convicted in the scandal. The bank agreed to pay $2.9bn to settle a US-led investigation into its role in 2020.
In a lengthy sentencing hearing defense attorneys requested that judge Margo Brodie release Ng on time served. They argued that Ng had been diagnosed with post-traumatic stress disorder after being held in Malaysian jail where he contracted rat- and mosquito-borne diseases.
“There’s no more deterrence I can think of than putting a Goldman Sachs director in a jail with a hole and contracting malaria and leprosy,” Ng’s attorney Marc Agnifilo said.
But US prosecutors, who had asked for a 15-year sentence, argued that the $35m Ng received in the scheme had not, to their certainty, been recovered.
After passing sentence, Brodie said that a 120-month sentence was “sufficient” to “reflect the seriousness of the crimes” that involved “complex financial deals that raised $6bn, paid $1.6bn in bribes, $1bn in kickbacks – money that was meant to benefit the people of Malaysia.”
After Ng was convicted, Breon Peace, the US attorney for the eastern district of New York, said the justice department was “committed to addressing corporate culture by vigorously combating white-collar crime and holding corrupt individuals who seek to enrich themselves accountable for violating US laws here and abroad”.
Prosecutors at trial accused Ng of pocketing $35m in stolen 1MDB funds. The case relied on the testimony of Tim Leissner, an ex-Goldman partner and its south-east Asia chairman, who pleaded guilty to conspiring to launder money and conspiring to violate the Foreign Corrupt Practices Act (FCPA). At trial, Ng called Leissner a “one-of-a-kind” liar.
Ng, prosecutors argued, participated in setting up three 1MDB bond offerings through Goldman that generated more than $600m in fees for the bank. The bond deals, known as “Project Magnolia,” “Project Maximus”, and “Project Catalyze”, raised around $6.5bn. US authorities said as much as $1bn was used to pay off corrupt officials in Malaysia and Abu Dhabi.
An FBI investigation into 1MDB and Goldman faced a congressional hearing into its Malaysian dealings. Goldman agreed to a record $2.9bn settlement with criminal and civil authorities in the US, UK and Singapore, as well as a separate $3.9bn Malaysian fine. The bank said it had been lied to “certain members of the former Malaysian government and 1MDB”.
The department of justice alleged that Ng acted as crucial link between 1MDB and Jho Low, a Malaysian financier now believed to be living in China.
Low is accused of using $4.5bn of misappropriated Malaysian development money to fund a wild lifestyle, funneling money into luxury real estate and jewelry and backing Hollywood films, including Martin Scorsese’s The Wolf of Wall Street, a tale of financial corruption and all-round bad behavior starring Leonardo DiCaprio.
Low’s spending spree included buying Picasso’s Women of Algiers for $179m; a $51m Jean-Michel Basquiat painting; a $23m diamond necklace; millions of dollars in Hermès handbags, a $600,000 best actor Oscar statuette given to Marlon Brando for On the Waterfront; a custom-built mega-yacht; a Beverly Hills hotel; a $415m stake in EMI music publishing; and a transparent grand piano.
In 2013, the year The Wolf of Wall Street was released, at least $681m – money the Malaysian government said was a gift from the Saudi royal family – landed in the personal bank accounts of former Malaysian prime minister Najib Razak, who was later cleared of misappropriation.
That same year, revelers including Low, DiCaprio, Jamie Foxx and Wolf of Wall Street co-star Jonah Hill flew to Australia and Las Vegas in time to celebrate new year twice.
In a pre-sentencing memorandum, Ng’s lawyer said that he is suffering from PTSD after being “stripped of his dignity in a Malaysian prison”.
