1Malaysia Development Berhad scandal

1Malaysia Development Berhad (1MDB)

Company type	State-owned enterprise
Industry	Sovereign wealth fund
Founded	2009
Founder	Najib Razak
Headquarters	Malaysia
Area served	Malaysia
Key people	Najib Razak (Chairman of Board of Advisors), Arul Kanda (President)
Products	Strategic investments

1Malaysia Development Berhad Scandal

The 1Malaysia Development Berhad scandal, frequently referred to as the 1MDB scandal or simply 1MDB, represents a significant and ongoing case of corruption, bribery, and money laundering conspiracy involving Malaysia's sovereign wealth fund, 1MDB. This scandal centers on the systematic misappropriation and global diversion of assets. Emerging in Malaysia in 2009, its ramifications extended internationally, implicating political figures, financial institutions, and entertainment industries, leading to investigations across multiple nations. It has been characterized as "one of the world's largest financial scandals" and was labeled by the United States Department of Justice in 2016 as the "largest kleptocracy case ever recorded".

A leak of documents in 2015 exposed that Malaysia’s then-Prime Minister Najib Razak had transferred upwards of RM 2.67 billion (approximately US$700 million) from 1MDB into personal bank accounts. The individual alleged to have masterminded this scheme, Jho Low, coordinated international fund transfers utilizing shell corporations and offshore banking facilities. By 2018, the U.S. Department of Justice disclosed that Low along with accomplices from Malaysia, Saudi Arabia, and the UAE had siphoned over US$4.5 billion from 1MDB. These embezzled funds were used to purchase luxury items such as the superyacht Equanimity, finance Hollywood films including The Wolf of Wall Street through Red Granite Pictures, and support extravagant lifestyles for Low, Najib, and Najib’s spouse Rosmah Mansor. Additionally, attempts were made to channel stolen money into U.S. political contributions and lobbying efforts.

The scandal caused major political upheaval in Malaysia. Investigations led Najib to remove critics like deputy Muhyiddin Yassin and attorney-general Abdul Gani Patail, with initial charges against Najib being dropped. Former Prime Minister Mahathir Mohamad, a prominent opponent, spearheaded demands for Najib’s resignation through the Malaysian Citizens' Declaration. The Malaysian Conference of Rulers called for expedited inquiries amid diminishing public trust.

International investigations were launched in at least six countries. By 2015, 1MDB's reported debt stood at nearly RM 42 billion (US$11.73 billion). This included a $3 billion bond issued in 2013 backed by the state and underwritten by Goldman Sachs, which reportedly earned fees up to $300 million—a figure contested by the bank. Goldman Sachs faced allegations under the Foreign Corrupt Practices Act and ultimately settled with the U.S. Department of Justice for more than $2.9 billion. Other individuals charged include rapper Pras, former Goldman Sachs chairman Tim Leissner, and fundraiser Elliott Broidy.

After the general election in 2018, Prime Minister Mahathir Mohamad reopened investigations. Najib along with eleven others were prohibited from leaving Malaysia, while authorities confiscated luxury assets valued at around US$270 million linked to Najib—the largest seizure ever recorded in Malaysia. Najib faced multiple charges including criminal breach of trust, money laundering, and abuse of power; meanwhile, Jho Low became an international fugitive charged with money laundering. Najib was subsequently convicted on seven counts related to SRC International—an entity affiliated with 1MDB—and sentenced to twelve years imprisonment.

By September 2020, estimates placed stolen funds at approximately US$4.5 billion with outstanding debts amounting to US$7.8 billion. The Malaysian government assumed responsibility for these liabilities, including bonds maturing in 2039. As of August 2021, the United States had recovered and returned US$1.2 billion of misappropriated assets, joining Singapore and other countries that have initiated recovery actions or repatriated smaller sums.

Background and principal figures

In 2009, Najib Razak assumed office as the Prime Minister of Malaysia. Within his inaugural year, he launched 1Malaysia Development Berhad (1MDB), a sovereign wealth fund designed to drive strategic investments aimed at poverty reduction, aligning with his economic liberalisation agenda and the 1Malaysia initiative. The fund was allocated an investment capital of $1 billion, with Najib retaining exclusive control over investment decisions and appointments of management personnel. Najib's spouse is Rosmah Mansor, and her son from a previous relationship is Riza Aziz.

Jho Low, a businessman from Penang, Malaysia, held no official position within 1MDB but gained significant access through influential political and entertainment networks spanning Malaysia, the Middle East, and the United States. He was involved in high-level meetings and played a key role in facilitating numerous transactions.

Tim Leissner, a German national and chairman of Goldman Sachs’ Southeast Asia division, was recognized for securing profitable regional agreements following the 2008 financial crisis. Introduced to Low by Goldman’s Malaysian head Roger Ng, Leissner and Ng worked closely with Low, utilizing political connections to arrange deals and execute the fraudulent scheme.

The scheme

The US DOJ described the operation in three stages. In August 2009, Najib and Low met representatives from PetroSaudi aboard a yacht in Monaco to discuss 1MDB's initial investment. Participants included Saudi royal Turki bin Abdullah Al Saud and Tarek Obaid. Subsequently, Najib authorized a $2.5 billion joint venture between PetroSaudi and 1MDB in Saudi Arabia; however, the DOJ characterized this agreement as a "facade" intended to divert $1 billion into a Swiss bank account.

Following this, Goldman Sachs raised $1.4 billion through bond issuance, which was then funneled into a Swiss account improperly. Another $1.3 billion raised by Goldman Sachs was redirected into a Singapore bank account. According to US officials, Goldman Sachs—particularly Roger Ng—was instrumental in orchestrating the fraud and laundering funds, some of which were used to bribe officials in Malaysia and the United Arab Emirates.

Allocation of funds

More than $4 billion was embezzled from 1MDB and spent on luxury assets such as art collections, diamonds, and real estate.

Low is alleged to have utilized 1MDB money to support an extravagant lifestyle in the United States. The DOJ tracked $100 million from the PetroSaudi transaction to Hollywood real estate acquisitions and $40 million toward apartments in New York City. He developed associations with musicians Swizz Beats, Alicia Keys, and Pras, socialite Paris Hilton, and expended funds on luxury gifts for model Miranda Kerr and singer Elva Hsiao.

The Hollywood production firm Red Granite Pictures, co-founded by Riza Aziz and Joey McFarland in 2010, reportedly received diverted funds. The DOJ stated these resources financed films including The Wolf of Wall Street, Daddy's Home, and Dumb and Dumber To, with royalties seized by 2017. Jho Low received personal credit in The Wolf of Wall Street.

Changes in auditing firms and transparency measures

The reported profit of RM 425 million between September 2009 and March 2010 drew scrutiny over 1MDB's transparency practices. Tony Pua, the DAP representative for Petaling Jaya Utara, raised questions about whether this profit stemmed from government asset injections, such as transfers of land rights.

In October 2010, 1MDB confirmed that its financial statements were comprehensively audited by KPMG, with portfolio valuations conducted by Deloitte and tax consultancy provided by Ernst & Young.

Concerns intensified when 1MDB sought a six-month extension to submit its annual report due in September 2013, coupled with the suspicious replacement of three auditors since its establishment. The Companies Commission of Malaysia (CCM) verified that 1MDB had met all filing obligations, including registering an official address.

The transfer of Sungai Besi airport land in June 2011 was intended to facilitate the Bandar Malaysia project, a mixed-use commercial and residential development. Despite securing RM 3.5 billion through loans and Islamic bonds, the project experienced delays amid parliamentary inquiries. In April 2013, 1MDB awarded a RM 2.1 billion contract to Perbadanan Perwira Harta Malaysia (PPHM), a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), to develop sites for relocating the military base situated on the land. Construction was planned to commence following the relocation.

As part of its debt restructuring efforts, on 31 December 2015, 1MDB agreed to sell a 60% stake in Bandar Malaysia Sdn Bhd to a consortium including Iskandar Waterfront Holdings and China Railway Engineering Corporation. However, this agreement eventually fell through.

On 7 September 2015, advisory board member Abdul Samad Alias resigned, citing unheeded requests for information. While 1MDB denied repeated requests for data, it stated that President Arul Kanda had met with him earlier that year.

Since 2013, 1MDB lacked adequate external audits; in July 2016, Deloitte Malaysia withdrew its endorsement of audit reports for the financial years 2013 and 2014. Amid rising public concern, Prime Minister Najib—who also served as Chairman of 1MDB's Board of Advisors—commissioned the Auditor General to conduct an audit in March 2015. The final audit report was classified as an Official Secret and only disclosed to the Public Accounts Committee (PAC). Subsequently, leaked copies appeared online. Following Najib’s electoral defeat in 2018, the new administration declassified the report on 12 May 2018.

After Pakatan Harapan’s victory in May 2018, Finance Minister Lim Guan Eng appointed PricewaterhouseCoopers (PwC) to undertake a special audit and review of 1MDB’s financial status.

1MDB lawsuit against Amicorp Group for alleged fraud

In a significant development related to the 1Malaysia Development Berhad (1MDB) controversy, on 20 December 2024, 1MDB initiated legal action in the British Virgin Islands against Amicorp Group and its CEO Toine Knipping. The suit seeks damages exceeding $1 billion over allegations of fraud. The Malaysian sovereign fund accuses Amicorp—a corporate services firm based in Hong Kong—of facilitating fraudulent transactions totaling more than $7 billion between 2009 and 2014 through shell companies, fictitious deals, and misleading financial arrangements. These schemes purportedly concealed misappropriated funds routed via jurisdictions including Barbados, Curaçao, Hong Kong, and the British Virgin Islands.

According to 1MDB, Amicorp played a role in enabling access to global financial systems that allowed fund entities to cycle assets repeatedly, creating a false impression of legitimate returns. This lawsuit forms part of wider initiatives aimed at recovering assets stolen in connection with the multibillion-dollar scandal that has prompted investigations across the United States, Switzerland, and Singapore. It follows an earlier claim filed against Amicorp in June 2024 alleging dishonest assistance.

Amicorp denies any misconduct and intends to challenge the $1 billion claim, maintaining that resolution should occur within the jurisdiction of the British Virgin Islands Court of Justice.

The scandal has had profound political and economic consequences, including the conviction of former Malaysian Prime Minister Najib Razak on corruption charges. The ongoing litigation underscores the intricate challenges involved in international finance and asset recovery related to large-scale financial crimes.

Debt accumulation and credit rating decline

By the beginning of 2015, 1MDB's liabilities had escalated to nearly RM 42 billion, causing its bonds to plummet to unprecedented lows. The Malaysian cabinet declined a proposal for a RM 3 billion capital injection, thereby restricting the company's ability to fulfill its debt commitments promptly.

Government's clarification on the donation

On 3 August 2015, the MACC announced that the RM 2.6 billion found in Najib's personal bank account originated from donors rather than 1MDB itself, though it did not disclose the identities of these donors or explain why this information was revealed late. Wan Adnan Wan Mamat, head of UMNO’s Kuantan division, asserted that the funds came from Saudi Arabia as gratitude for combating ISIS and were transferred into Najib’s personal accounts instead of UMNO’s.

Saudi Foreign Minister Adel al-Jubeir acknowledged knowledge of the contribution, affirming its authenticity and stating there were no conditions attached. Attorney-General Mohamad Apandi Ali named Turki bin Abdullah Al Saud, son of the late Saudi King Abdullah, as the benefactor. Contrarily, WSJ finance editor Ken Brown challenged this claim, presenting evidence suggesting the funds originated from entities connected to 1MDB rather than Saudi donors.

Actions taken by Bank Negara

In early 2016, Bank Negara Malaysia withdrew 1MDB’s authorization to invest $1.83 billion abroad due to inaccurate or incomplete disclosures. After probing 1MDB’s fund transfers, Bank Negara recommended that the Attorney General pursue criminal charges. 1MDB responded by stating it was unable to recover the $1.83 billion as those funds had already been expended.

Police complaints

On 28 August 2015, an UMNO member initiated a civil lawsuit against Prime Minister Najib Razak for breaching trustee responsibilities and failing to disclose or account for the donated funds. The lawsuit demanded repayment of $650 million allegedly held in a Singapore bank account and sought information on other related accounts. The plaintiff was promptly expelled from UMNO.

Several other UMNO members also lodged police reports against Najib concerning 1MDB-related financial misconduct. Notably, Khairuddin Abu Hassan and his attorney Matthias Chang submitted evidence to Swiss authorities requesting an investigation into Swiss banks’ involvement with 1MDB. They further filed a police report in Hong Kong targeting Najib and Jho Low over four companies tied to 1MDB. Subsequently, Khairuddin and Matthias were prohibited from leaving Malaysia and charged under the Security Offences Act for purported attempts to undermine Malaysia’s banking system.

Domestic legal actions

The opposition party People's Justice Party (PKR) pursued legal action against Najib Razak, Tengku Adnan Tengku Mansor, 1MDB, and the Election Commission, alleging misuse of 1MDB funds for election campaign purposes in violation of electoral laws. However, the Malaysian High Court dismissed this case, ruling that PKR lacked standing to sue Najib and 1MDB. Additionally, former Prime Minister Mahathir Mohamad filed a lawsuit accusing Najib of obstructing official investigations into both 1MDB and the RM 2.6 billion political donation.

Government interventions

In response to backlash over the 1MDB scandal, Deputy Prime Minister Muhyiddin Yassin was removed from his position and succeeded by then-Home Minister Ahmad Zahid Hamidi. Additionally, Rural and Regional Development Minister Shafie Apdal, who had also voiced criticisms regarding 1MDB, was dismissed; both individuals were expelled from UMNO in June 2016.

Attorney General Abdul Gani Patail, who was spearheading investigations into alleged misappropriations involving Najib Razak and 1MDB, was replaced by former Federal Court judge Mohamed Apandi Ali following his dismissal. The Public Accounts Committee (PAC), which was probing the financial losses linked to 1MDB, was indefinitely postponed after four of its members accepted positions within Najib’s cabinet.

In July 2015, the Malaysian Home Ministry imposed a three-month suspension on The Edge Malaysia and The Edge Financial Daily due to reports considered to be misleading about 1MDB. Meanwhile, the Malaysian Communications and Multimedia Commission (MCMC) blocked access to the website Sarawak Report. Authorities issued an arrest warrant for Clare Rewcastle Brown, the manager of Sarawak Report, accusing her of activities detrimental to parliamentary democracy and disseminating false information about Najib.

UMNO member Khairuddin Abu Hassan was detained after lodging police reports overseas alleging financial misconduct related to 1MDB. His legal counsel indicated that Khairuddin aimed to meet with the FBI to encourage an investigation into money laundering tied to 1MDB; however, the FBI denied any prior communication.

Former Kedah Menteri Besar Mukhriz Mahathir resigned in February 2016 following public criticism from Najib concerning his remarks on 1MDB. Subsequently, he was expelled from UMNO in June, with his father, former Prime Minister Mahathir Mohamad, also departing UMNO and withdrawing support for Najib.

Opposition Member of Parliament Rafizi Ramli faced arrest and charges under the Official Secrets Act after leaking details from the Auditor General’s report on 1MDB.

Efforts by the Home Ministry and Interpol to locate key figures related to 1MDB investigations—including businessman Jho Low and several former executives—were unsuccessful.

The MCMC blocked access to platforms such as Medium.com due to articles published by Sarawak Report. Similarly, Asia Sentinel and The Malaysian Insider were restricted after releasing reports alleging sufficient evidence implicating Najib in corruption. These website restrictions were lifted following the government transition after the 2018 Malaysian general election.

Consequences and debt restructuring default, 2016

The Malaysian Public Accounts Committee (PAC) inquiry into 1MDB uncovered that fund management operated without board authorization and repeatedly provided misleading information to auditors. This prompted demands for a police investigation targeting the fund’s former management. The PAC concluded that the board, led by Najib Razak as chairman, failed in its duty of financial oversight. Following these revelations, the entire 1MDB board of directors resigned. The PAC reported that US$3.5 billion had been transferred to a company named Aabar Investments PJS; however, International Petroleum Investment Company (IPIC) denied any association with a British Virgin Islands-based entity called Aabar BVI or receiving payments from it.

On the London Stock Exchange, IPIC announced that 1MDB defaulted on a US$1.1 billion payment required under their debt restructuring agreement, resulting in termination of the arrangement between the two parties.

Renewed investigations 2018-2021

After the 14th Malaysian general election on 9 May 2018, which ended the Najib Razak-led Barisan Nasional coalition's long-standing governance, Pakatan Harapan assumed power with Mahathir Mohamad as Prime Minister. The new administration formed a dedicated task force headed by former Attorney General Tan Sri Abdul Gani Patail to revive inquiries into the 1MDB scandal.

Authorities prohibited Najib from traveling abroad and confiscated assets linked to him and his wife Rosmah Mansor, valued between RM900 million and RM1.1 billion (approximately $220–269 million). This seizure included more than 12,000 jewelry items, 423 timepieces, and 567 handbags from 37 luxury brands—marked as the largest asset confiscation in Malaysia’s history. Najib was detained by the Malaysian Anti-Corruption Commission (MACC) and by April 2019 faced 42 charges involving abuse of power, money laundering, criminal breach of trust, and misuse of authority related to RM2.3 billion ($556 million).

The government also issued arrest warrants targeting Jho Low and former SRC International director Nik Faisal Ariff Kamil amid ongoing 1MDB corruption investigations. On 28 June 2018, 1MDB removed its president and CEO Arul Kanda for neglecting his responsibilities. Concurrently, MACC froze bank accounts associated with UMNO as part of the probe.

In August 2018, Malaysian police charged Jho Low and his father Larry Low with money laundering involving US$457 million allegedly embezzled from 1MDB funds, much of which financed the acquisition of the superyacht Equanimity. The yacht was auctioned between October and November 2018 before being purchased by Genting Group for $126 million.

By December 2018, Malaysia’s Attorney-General had filed charges against Goldman Sachs subsidiaries, former employees Tim Leissner and Roger Ng Chong Hwa, ex-1MDB staff member Jasmine Loo, and Jho Low concerning bond issuances arranged by Goldman Sachs in 2012–13. Prosecutors demanded fines exceeding $2.7 billion for funds misappropriated from bond proceeds, $600 million in fees paid to Goldman Sachs, along with prison sentences for those indicted.

In January 2020, audio recordings surfaced revealing Najib’s request to UAE Crown Prince Mohammed Bin Zayed to create a fictitious loan agreement aimed at concealing financing linked to IPIC rather than to 1MDB.

On 28 July 2020, Najib was found guilty on seven charges related to SRC International and sentenced to twelve years in prison plus a RM210 million ($49.5 million) fine. His conviction for misappropriating RM42 million from SRC International was upheld by the Court of Appeal in December 2021 and confirmed by the Federal Court in August 2022. On 1 September 2022, Rosmah Mansor was convicted on three counts of corruption and received a ten-year prison sentence along with a RM970 million fine.

Australia

Avestra Asset Management, an Australian fund manager responsible for handling up to RM2.32 billion of 1MDB-related funds, is currently undergoing liquidation and investigation by the Australian Securities and Investments Commission due to suspected legal violations and possible investor losses. The Australian High Court mandated the closure of five Avestra investment schemes following discoveries of undisclosed related-party transactions, thirteen potential infringements of corporate law, and failure to invest in accordance with fund mandates.

Cyprus

The Cypriot cabinet revoked Jho Low's passport following a formal decision.

Hong Kong

In 2015, authorities in Hong Kong initiated probes into deposits amounting to $250 million at a Credit Suisse branch, which were connected to Najib Razak and the 1MDB scandal.

Indonesia

On 28 February 2018, Indonesian officials confiscated the superyacht Equanimity in Bali at the request of the U.S. Department of Justice, as part of the 1MDB corruption investigation. The vessel was subsequently repatriated to Malaysia in August 2018 under Mutual Legal Assistance Treaties involving Indonesia, the United States, and Malaysia.

Kuwait

In 2023, Jho Low received a 10-year prison sentence in absentia issued by Kuwaiti courts.

Luxembourg

Authorities in Luxembourg launched investigations into money laundering tied to 1MDB, concentrating on transfers totaling several hundred million dollars routed through a Luxembourg-based bank account linked to an offshore entity. The bank under scrutiny is a private institution within the Edmond de Rothschild Group, known for managing assets for affluent clients. This inquiry forms part of a wider global examination of 1MDB’s financial dealings, including its bond issuance in 2012.

Saudi Arabia

On 3 August 2015, the Malaysian Anti-Corruption Commission (MACC) announced that RM 2.6 billion deposited into Prime Minister Najib Razak’s personal bank account came from donors rather than from 1MDB. Attorney General Mohamad Apandi Ali identified Prince Turki bin Abdullah Al Saud as the source; Prince Turki was among eleven princes detained in November 2017. In August 2023, following legal proceedings, he was sentenced to 17 years imprisonment.

Seychelles

In 2016, Seychelles’ Financial Intelligence Unit contributed to an international probe into 1MDB by supplying comprehensive data on offshore companies registered within its jurisdiction. To date, 1MDB has neither challenged nor appears inclined to contest lawsuits emerging from these overseas investigations.

Singapore

Singapore’s Monetary Authority of Singapore (MAS) alongside the Commercial Affairs Department froze multiple bank accounts suspected of being involved in money laundering connected to 1MDB. One such account belonged to Yak Yew Chee, who served as relationship manager for entities including 1MDB Global Investments Ltd, Aabar Investment PJS Limited, SRC International, and Low Taek Jho. Former BSI banker Yeo Jiawei faced charges related to money laundering and fraud involving companies linked to 1MDB. Additionally, Kelvin Ang Wee Keng was charged with corruption in connection with the investigation.

A joint announcement by Singapore’s Attorney General’s Chambers and MAS disclosed asset seizures amounting to S$240 million, with S$120 million attributed to Jho Low and his family. In March 2017, MAS imposed a decade-long prohibition order on former Goldman Sachs banker Tim Leissner for providing false information about the bank’s involvement in the 1MDB affair; this ban was extended indefinitely in December 2018 after he admitted to related offenses.

In September 2018, Singapore State Courts authorized the return of S$15.3 million linked to 1MDB back to Malaysia, while efforts continue to reclaim further misappropriated assets.

Switzerland

Swiss authorities, under the leadership of the Office of the Attorney General, froze bank accounts totaling several million US dollars connected to 1MDB. Their inquiry suggested that nearly US$4 billion might have been misappropriated, focusing on four instances of suspected criminal activity. These funds were reportedly deposited into Swiss accounts belonging to former Malaysian officials as well as current and former officials from the UAE. The Swiss Financial Market Supervisory Authority (Finma) initiated investigations into several Swiss banks implicated in laundering money linked to 1MDB.

On 15 March 2018, the Swiss parliament declined a proposal to return assets seized during 1MDB investigations back to Malaysia, despite advocacy from Swiss politicians and NGOs. Nonetheless, on 10 July 2018, Swiss Attorney General Michael Lauber confirmed Switzerland’s commitment to not retain illicit funds and to repatriate them in accordance with legal requirements.

On 25 April 2023, Swiss prosecutors charged two executives from Saudi oil firm Petrosaudi in relation to the 1MDB scandal. Their trial began in April 2024.

United Arab Emirates

The UAE enforced travel restrictions, froze bank accounts, and detained Khadem al-Qubaisi, former managing director of Abu Dhabi's International Petroleum Investment Company (IPIC), along with Mohammed Badawy al-Husseiny, his deputy and CEO of Aabar Investments, a subsidiary. Both men had significant connections to 1MDB, utilizing the British Virgin Islands-based Aabar Investments PJS to transfer funds from 1MDB into international accounts and enterprises. In 2019, al-Qubaisi and al-Husseiny were sentenced in Abu Dhabi to prison terms of 15 and 10 years respectively.

In an interview with The Wall Street Journal, al-Qubaisi asserted he was made a “scapegoat” by Mansour bin Zayed, who was identified as a “co-conspirator” by U.S. prosecutors. Evidence indicated that Sheikh Mansour owned the superyacht Topaz, partially purchased with 1MDB funds, including a $161 million loan repayment linked to the scandal. Mansour has not faced charges related to 1MDB. His companies IPIC and Aabar agreed to repay $1.8 billion to Malaysia.

United Kingdom

In September 2020, the U.S. Department of Justice commenced civil forfeiture actions targeting US$330 million held by London law firm Clyde & Co. These funds were allegedly misappropriated from 1MDB and intended for an unsuccessful Venezuelan oil venture.

United States

The Federal Bureau of Investigation launched an investigation in 2015 into money laundering associated with 1MDB. The U.S. Department of Justice’s international corruption unit examined property acquisitions within the U.S. involving Najib Razak’s stepson Riza Aziz alongside transfers into Najib’s personal bank account. Shell companies linked to Aziz and Jho Low were implicated. Major financial institutions such as JPMorgan Chase, Deutsche Bank, and Wells Fargo were instructed to preserve records related to transactions involving 1MDB.

The FBI subpoenaed staff at film company Red Granite Pictures, co-founded by Aziz, amid allegations that US$155 million diverted from 1MDB financed the 2013 movie The Wolf of Wall Street.

Goldman Sachs underwent scrutiny over alleged money laundering and corruption tied to its involvement with 1MDB deals. The FBI probed connections between Najib Razak and a regional Goldman Sachs executive. Former Goldman banker Tim Leissner received a DOJ subpoena; he subsequently pleaded guilty to laundering over US$200 million derived from 1MDB bond proceeds and agreed to forfeit US$43.7 million. Roger Ng was arrested, extradited to the U.S., and faced charges.

A DOJ lawsuit filed in July 2016 named a senior official referred to as "Malaysian Official 1" (MO1), accused of receiving approximately US$681 million in stolen funds through Falcon Bank; Najib Razak was later identified as MO1. Najib’s wife, Rosmah Mansor, was connected to US$30 million worth of jewelry purchased with misappropriated funds.

In June 2017, the DOJ sought recovery of over US$1 billion from associates linked to Najib and 1MDB, seizing luxury real estate in Beverly Hills, Manhattan, London, as well as high-value art collections, a private jet, yacht, and movie royalties from The Wolf of Wall Street.

In March 2018, producers at Red Granite Pictures reached a US$60 million settlement with the DOJ regarding allegations that stolen money financed the film; this agreement did not constitute an admission of guilt.

On 1 November 2018, former Goldman Sachs bankers Tim Leissner and Roger Ng together with fugitive financier Jho Low were charged with embezzling funds from 1MDB and bribery offenses. Leissner pled guilty; Ng was extradited before facing charges in Malaysia.

Also in November 2018, ex-DOJ employee George Higginbotham pleaded guilty for conspiring to channel over US$73 million on behalf of Jho Low aimed at lobbying against U.S. probes into the scandal. In May 2019, Jho Low and former Fugees rapper Pras were charged with funneling US$21.6 million into the U.S. presidential election campaign of 2012.

By November 2019, Jho Low agreed to forfeit assets valued near US$700 million—including luxury residences—to resolve U.S. charges without admitting wrongdoing.

Elliott Broidy was charged in October 2020 for breaching the Foreign Agents Registration Act by accepting $6 million from a Malaysian national for lobbying efforts opposing the 1MDB investigation; he was fully pardoned by President Trump in January 2021.

In February 2022 testimony revealed that former Goldman Sachs CEO Lloyd Blankfein met Najib Razak in 2009 prior to major bond offerings for 1MDB, with an understanding that Najib’s children would obtain positions at Goldman Sachs. Najib’s daughter confirmed applying for a job facilitated by former Goldman bankers but was ultimately not hired.

Roger Ng’s trial was suspended in February 2022 after prosecutors failed to disclose more than 15,000 documents to defense counsel. Ng was later convicted for conspiracy involving money laundering and bribery under the Foreign Corrupt Practices Act. An estimated $4.5 billion of stolen funds passed through U.S financial institutions during this scheme.

Recovery of 1MDB assets

By May 2019, Malaysia had successfully retrieved US$322 million (equivalent to RM1.3 billion) in assets linked to 1MDB following intensified investigations after the 2018 General Election.

To safeguard the value of these assets, the Park Lane Hotel in New York was sold in November 2018, with approval from the U.S. Department of Justice under legal protocols and without any admission of guilt. In August 2018, Malaysian authorities confiscated a yacht reportedly acquired by Low, which was subsequently sold eight months later to alleviate maintenance expenses; Low’s representative condemned the seizure as "illegal." In 2017, Leonardo DiCaprio returned various gifts from Low—including an Oscar statuette and artworks by Picasso and Jean-Michel Basquiat—to U.S. officials.

Among the recovered sums were US$126 million from the sale of the Equanimity yacht to Genting Group, US$139 million obtained through the sale of Low's stake in the Park Lane Hotel, and US$57 million arising from a forfeiture agreement with Red Granite Pictures, with funds repatriated after deducting investigative expenses. Furthermore, Singaporean courts mandated the return of S$50 million (RM152 million) connected to 1MDB.

Malaysia is coordinating with at least six other nations in efforts to reclaim approximately US$4.5 billion in allegedly misappropriated assets, while the U.S. DOJ is pursuing forfeiture claims totaling US$1.7 billion. On 15 April 2020, the DOJ transferred US$300 million in recovered monies back to Malaysia.

On 24 July 2020, Malaysia finalized a cash settlement of US$2.5 billion with Goldman Sachs, alongside a commitment to return US$1.4 billion in assets associated with 1MDB bonds. This settlement was notably less than the US$7.5 billion initially sought by Malaysia’s finance minister. In return, Malaysia agreed to drop all criminal proceedings against Goldman Sachs and discontinue legal actions against 17 current and former directors—a resolution some critics argued favored Goldman Sachs.

In January 2022, Malaysia collected RM333 million (US$111 million) in penalties from KPMG’s Malaysian affiliate as part of a settlement regarding audit lapses tied to the 1MDB case.

Reports from Offshore Alert highlight ongoing international efforts to recover additional funds misappropriated through the 1MDB scandal.

Media coverage

In January 2015, investigative journalist Clare Rewcastle Brown, author of Sarawak Report, received approximately 227,000 leaked documents related to the fraud. These materials were leaked by Xavier Justo, a Swiss national and former employee of PetroSaudi International. Subsequently, Justo became the target of an aggressive online defamation campaign orchestrated by "Team Jorge," an Israeli disinformation group employed by affluent clients. By late 2020, a website and YouTube channel impersonating Justo circulated false portrayals depicting him as a mercenary motivated purely by self-interest. These channels, disseminated through fabricated accounts, sought to undermine his credibility by branding him as a thief, drug addict, and blackmailer.

In February 2015, The Sunday Times, The Edge, and Sarawak Report, citing emails and documents obtained by Rewcastle Brown, reported that Penang-based Low Taek Jho—connected to Najib Razak—diverted US$700 million from a joint venture between 1MDB and PetroSaudi International via Good Star Ltd. Although Low did not hold an official role at 1MDB, he was frequently consulted without formal decision-making power. An email disclosed that Low had obtained loan approval from Najib for $1 billion without authorization from Bank Negara.

A 2022 investigation by German news outlet Neckarstadtblog uncovered that Suaad A. Al-Attas, former spouse of Mohammed Badawy Al Husseiny, received nearly US$40 million linked to the scandal and later became a shareholder in a company owned by German real estate developer Tom Bock. She extended a loan amounting to nearly €5.5 million, suggesting that some misappropriated funds were funneled into the Turley real estate project located in Mannheim.

Within Malaysia itself, The Edge stood out as one of the few media organizations probing into the scandal; however, its publishing license was suspended by government authorities in what its publisher described as an act of censorship.

Wall Street Journal coverage

The Wall Street Journal disclosed that in 2012, 1MDB acquired Malaysian energy assets through Genting Group at inflated prices, with allegations that Genting contributed funds to a foundation overseen by Najib to support the 2013 general election campaign. 1MDB rejected claims of overpayment, emphasizing that the acquisitions were based on projected long-term benefits.

Additional accusations involved a transfer of $700 million from 1MDB into Najib's accounts held at AmBank and Affin Bank. Authorities froze six associated accounts, yet the Malaysian Anti-Corruption Commission subsequently cleared 1MDB, explaining the money originated from donors rather than 1MDB itself. Najib refuted any misconduct, stating he would not misappropriate funds by depositing them domestically. The WSJ countered by releasing detailed bank records. Meanwhile, Singapore officials also froze two accounts connected to the probe, although 1MDB asserted it had no knowledge of or contact with foreign investigators.

In 2014, according to WSJ findings, 1MDB transferred approximately $850 million to a British Virgin Islands entity concealing ownership by International Petroleum Investment Company (IPIC), a UAE sovereign investment firm. Reports surfaced that 1MDB defaulted on $1.4 billion owed to IPIC related to a $3.5 billion bond issued in 2012 for power plant acquisitions, with an additional $993 million also unaccounted for. Despite these claims, 1MDB maintained it had a solid partnership with IPIC, citing enforceable contracts and payments made, while IPIC reiterated its collaboration with Malaysia’s Ministry of Finance.

Another article from WSJ revealed that 1MDB entered a joint venture with US political fundraiser DuSable Capital Management LLC to develop Malaysian solar power projects via the Yurus PE Fund. Within six months of inception, 1MDB purchased DuSable’s 49% share for $69 million prior to any construction activities.

Analysis of bank transfers indicated Najib expended nearly $15 million on luxury items and a vehicle across the US, Singapore, and Italy using credit cards funded by private bank accounts linked to misappropriated 1MDB money.

See also

• Corruption in Malaysia
• Goldman Sachs controversies
• History of Malaysia
• The Kleptocrats
• Man on the Run (2023 film)
• Najib Razak controversies

External links

• The Guardian, "Inside Story: The World's Largest Financial Scandal – 1MDB", 28 July 2016.
• Global Witness:
  • "The Real Wolves of Wall Street – Banks, Lawyers and Auditors Central to Malaysia's Largest Corruption Scandal" (HTML), March 2018.
  • "The Real Wolves of Wall Street – Banks, Lawyers and Auditors Central to Malaysia's Largest Corruption Scandal" (PDF), March 2018.
• Bloomberg News, "Overview of Global Investigations into Malaysia's 1MDB Fund", 8 March 2018.