27 May 2020
A decade after billions of dollars were wired to Swiss banks, the country is holding its first trial into whether a local banker failed to stop a $700 million transfer into an account controlled by Low Taek Jho, the alleged mastermind behind the 1MDB scandal.
The compliance officer, who can only be identified as A., was an employee of Coutts & Co, where Low, the fugitive financier commonly known as Jho Low, had an account. A., 52, was the designated money laundering reporting officer for Coutts, according to the indictment.
The 1MDB scandal which led to the fall of former Malaysian Prime Minister Najib Razak, was breathtaking for the audacity with which little known financier Jho Low built an $8-billion dollar fund intended to develop the Malaysian economy. Instead, Low allegedly pilfered the money to fuel a spending spree on parties, sports cars, luxury properties priceless art, and even a film studio that financed the hit film “Wolf of Wall Street.”
Low established a Seychelles-registered company Good Star in May 2009 and opened an account at Coutts’ Singapore branch less than a month later, prosecutors said in the indictment. By September of that year, Low was asking to cease all communication with Coutts in Singapore and to receive updates only from Coutts’ Swiss unit to a gmail address he had created: firstname.lastname@example.org.
That unusual request prompted internal inquiries, prosecutors said. Low’s request to transfer $700 million from 1MDB to his Good Star account at Coutts raised further eyebrows, prompting Low to fly to Zurich to reassure officials at the lender.
Despite being an unknown Seychelles-registered company with a limited track record, Good Star was an investment firm that 1MDB was choosing to invest with, Low explained. Besides, Low added, he had close relationships with the king and prime minister of Malaysia. The deposit was eventually approved.
Swiss prosecutors pursued A. at least in part because he approved the $700 million transfer. In the indictment, they cite an Oct. 2, 2009, email in which he wrote “Please unblock the account 11116073 Good Star Ltd. The due diligence is so far good and we have sufficient evidence that the payment is true and valid.”
For this and other compliance lapses, the prosecutors write, “the culpability of the accused A. weighs heavily.”
By Hugo Miller, Bloomberg, 25 May 2020
Read more at Bloomberg
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