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Malaysia urgently seeking ex-Goldman Sachs banker’s extradition over 1MDB saga. What gives?
Malaysia fears that Tim Leissner could be spared jail time at his expected sentencing in New York this week based on recommendations by the US Department of Justice.
Malaysia's move comes amid its perceived signs of a push by the US Department of Justice (DOJ) for banker Tim Leissner (right) to be granted a lenient sentence for his role in the IMDB scandal. (Photos: Reuters/Andrew Kelly, AFP)
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KUALA LUMPUR: Malaysia is pushing urgently for a United States judge to order the Donald Trump administration to urgently consider its request to extradite a convicted former Goldman Sachs banker involved in the 1Malaysia Development Bhd (1MDB) fiasco before he is sentenced this week.
This comes amid perceived signs by Malaysia of a push by the US Department of Justice (DOJ) for the ex-banker Tim Leissner to be granted a lenient outcome at his expected sentencing in New York on Thursday (May 29).
Malaysian government officials, who spoke to CNA on condition of strict anonymity, added that they have also received “new information” of Leissner’s alleged involvement in the 1MDB scandal.
The officials said they would be recommending through their lawyers in the US that the presiding judge either orders the DOJ to urgently consider Malaysia’s request for Leissner’s extradition or to delay sentencing until the issue of his deportation to answer charges in Malaysia can be resolved.
“We only have this small window, to get him (Leissner) back here to answer to charges and also the new information we have received of his involvement and how we deal with Goldman Sachs,” said a senior Malaysian government official involved in the ongoing 1MDB investigations.
The Malaysian officials said that there is a strong possibility that Leissner could be spared any jail time because of recommendations submitted by the DOJ to the trial judge presiding over the case.
These officials, along with lawyers here involved in several ongoing 1MDB matters, said that positive recommendations in the pre-sentence memorandum submitted on May 15 by the DOJ appeared unusual.
“The letter from the DOJ to the court shows that they have little interest in (him) serving any (jail) time,” said a Malaysian government official close to the situation.
A senior partner of a Kuala Lumpur-based law firm involved in several ongoing 1MDB matters noted that he could not recall a case where the prosecution seems to be so malleable to a guilty party.
“This is almost like canonising him (Leissner),” said the veteran criminal lawyer.
Among other things, the so-called pre-sentencing memorandum to Justice Margo K Brodie of the Eastern District Court stated that the former banker provided “extensive” and “extraordinary” cooperation for nearly seven years after he pleaded guilty in August 2018 to conspiring to launder money and bribe foreign officials involved in the 1MDB scandal.
“Leissner’s cooperation was of tremendous value and was central to the government’s ability to swiftly indict and successfully prosecute numerous individuals and entities involved in the 1MDB scheme,” the memorandum reviewed by CNA stated.
Leissner has been barred from leaving the US pending his sentencing, and Malaysian officials said that they fear that if spared jail time, he would likely return to his native Germany, a country with which Malaysia does not have an extradition treaty.
Home Minister Saifuddin Nasution Ismail submitted Malaysia’s first request for Leissner’s extradition in August 2024 and followed it up with two other supplementary requests in October and in April this year for the convicted former banker, whose sentencing has been postponed more than 10 times.
A DOJ official, when contacted by CNA on Friday, declined to comment on the ongoing matter with Malaysia and Leissner.
Leissner faces up to 25 years in jail, having admitted to pocketing US$73.4 million from 1MDB and receiving another US$80 million from Malaysian fugitive financier Low Taek Jho, the scheme’s alleged mastermind who is better known as Jho Low.
SCRAMBLE
Kuala Lumpur’s scramble to secure custody of Leissner is crucial to Prime Minister Anwar Ibrahim’s wider plan to revisit a settlement Malaysia had entered with Goldman Sachs in August 2020 during the tenure of former premier Muhyiddin Yassin.
The Anwar government has publicly declared that the US$3.9 billion settlement with Goldman Sachs, which is now subject to arbitration in London, was unsatisfactory and wants to review the deal in a bid to press the US banking giant for more money.
Goldman Sachs, which had arranged US$6.5 billion in 1MDB bonds in 2012 and 2013 and earned over US$600 million in fees for what would later turn out to be elaborate embezzlement schemes, has long maintained that the scandal was caused by rogue employees, which included Leissner and his subordinate Roger Ng Chong Hwa.
The banking giant, which was ordered to pay a penalty of US2.9 billion, declined to comment when contacted by CNA.
But Malaysian government officials now say that they have obtained fresh information that they claim shows a wider circle of the top brass at Goldman Sachs were far more involved in the 1MDB matter than previously believed.
Much of the new information is coming from Ng, according to Malaysian government officials close to the situation.
Ng, a Malaysian citizen who was convicted in the US for crimes tied to 1MDB, is currently in Malaysia and sheltered under the country’s witness protection programme.
Malaysian government officials familiar with information emerging from the ongoing debriefing sessions by state investigators with Ng told CNA that he has claimed that a substantial amount of evidence, including secret phones used by Liessner and fugitive Low, was suppressed during his trial.
A senior government investigator involved in the ongoing 1MDB matters said that apart from communication devices, Ng has claimed that other material suppressed included correspondence between the Goldman Sachs bankers and board members of the global investment bank, and details of the Malaysian government officials who were bribed to facilitate the illegal dealings at 1MDB.
“Our lawyers in the US are already preparing the legal strategy on how to move forward on this front,” the government official said.
These latest developments show how the DOJ investigation into the 1MDB affair that began in 2015 continues to percolate in Malaysia and elsewhere in the world.
A state-controlled entity set up by now jailed premier Najib Razak in 2009, 1MDB has become the shorthand for one of the world’s largest cases of kleptocracy.
More than US$4.5 billion was found to have been misappropriated from the fund, according to the DOJ.
The scandal toppled the Najib administration in a national election in 2018, sent the former premier to jail in August 2022, and triggered a global manhunt for rogue financier Low.
Last Thursday, a Luxembourg court fined Edmond de Rothschild Bank roughly US$28 million for its role in money laundering funds tied to 1MDB.
LESS-THAN-CORDIAL RELATIONS
Malaysia’s latest wrangle with the DOJ over Leissner, who has been slapped with a lifetime ban by the Monetary Authority of Singapore to operate in the island state’s financial sector, joins a pattern of less-than-cordial relations between the two parties.
US-based lawyers involved in the ongoing recovery of assets and funds tied to 1MDB noted that ties between Malaysia and the DOJ have long been testy, particularly over the Malaysian government’s often unilateral actions in seizing assets tied to 1MDB.
One case was Malaysia’s seizure of luxury yacht Equanimity in August 2018, when the vessel was docked in the holiday resort of Bali in Indonesia.
Lawyers and investigators familiar with the situation at the time noted that the Indonesian authorities were to hand over the Cayman-registered 92m yacht to the DOJ.
But Malaysia used its close ties to the Indonesian police to get the yacht to make its way to Port Klang, before taking possession of the ship.
Malaysian government officials have grudgingly acknowledged that relations with the DOJ were ruffled because of the Equanimity affair, but they said that the DOJ has also been sometimes less-than-cooperative in other 1MDB-related matters.
Getting the DOJ to return Ng to Malaysia was one of those testy affairs.
Ng, who was the former head of the Goldman Sachs Malaysian chapter, was extradited to the US in May 2019 under a temporary surrender arrangement that called for reviews and extensions between the two governments every six months.
Ng, who is now 52 years old, was convicted in April 2022, before being sentenced in March the following year to 10 years in jail by Justice Brodie, the same judge currently presiding over the Leissner matter.
In mid-July 2023, the Anwar administration, through the Home Ministry, issued a formal request to the US to surrender Ng under the temporary surrender pact.
As previously reported by CNA, that petition quickly turned into a diplomatic wrangle after Washington insisted that Ng would only be handed over if Kuala Lumpur provided assurances that he would immediately begin serving his jail term in a Malaysian prison.
The Anwar government baulked.
Home Minister Saifuddin engaged a legal team in the US that subsequently obtained a ruling from Justice Brodie in October 2023 ordering Ng to be returned to Malaysia.
The court decision, which came just a day before Ng was scheduled to begin his 10-year sentence in the US, quickly ran into another previously undisclosed sideshow.
According to a senior Malaysian government official involved in the Ng affair, Justice Brodie’s court order that Ng be handed over prompted the DOJ to send its Southeast Asian representative based in the Philippines capital of Manila to meet with Saifuddin in the administrative capital of Putrajaya.
At the meeting, Saifuddin was informed by the DOJ representative that the US agency was not only facing trouble securing landing rights in secure locations in the region, but it was short on available aircraft and US Marshal officers to accompany Ng back to his home country.
At the meeting, Saifuddin offered that Malaysia would take on all logistics related to Ng’s deportation. The Home Ministry went on to arrange a private jet and deployed security personnel from Malaysia to handle the deportation.
A senior Home Ministry official contacted by CNA said that he could not discuss details of Ng's return to Malaysia because of national security considerations.
SANCTION, NOT PRAISE
All eyes are on how Justice Brodie will rule in the upcoming Leissner sentencing, which will prove crucial for the Anwar administration in its campaign to revisit the settlement the previous Muhyiddin government entered with Goldman Sachs.
In its pre-sentencing memorandum to the court, DOJ prosecutors, who have asked for leniency for Leissner, noted that the convicted former banker was cooperating in ongoing US investigations of other crimes.
The memorandum to Justice Brodie, reviewed by CNA, contained a paragraph that was redacted on grounds that the DOJ said were necessary to “protect the integrity of an ongoing investigation, including the safety of witnesses and law enforcement personnel”.
The DOJ is not the only party that offered recommendations to the court ahead of Leissner’s sentencing.
In a sharply contrasting memorandum, Goldman Sachs submitted a highly sullied characterisation of its former employee.
Apart from accusing Leissner of being a “serial liar”, Kathryn Ruemmler, general counsel for Goldman Sachs, noted that the former banker has never taken responsibility for his role in the scheme to siphon billions (of dollars) from 1MDB.
Ruemmler also disagreed with the DOJ's position that Leisnner should “receive cooperation credit for his insight in explaining how he carried out his crimes”.
“From Goldman’s perspective, Mr Leissner’s efforts in this regard are deserving of sanction, not praise,” she said in the memorandum.
