How $1 Billion Made Its Way to the Prime Minister Najib Razak


September 3, 2016

MALAYSIA’S 1MDB SCANDAL

 How $1 Billion Made Its Way to the Prime Minister Najib Razak

Image result for WSJ 1MDB Money Flow Chart

Investigators say at least $3.5 billion was misappropriated from 1MDB. Here’s how they believe $1 billion ended up in the bank accounts of Malaysian Prime Minister Najib Razak.

Every time Malaysian government investment fund 1Malaysia Development Bhd, or 1MDB, borrowed money, large amounts of the cash were quickly misappropriated, according to investigators. The money followed a circuitous path among private banks, offshore companies and funds, bank records show, and roughly $1 billion landed in the private bank accounts of Malaysian Prime Minister Najib Razak.

Image result for Aging UMNO Leadership

By Bradley, Tom Wright, Tyler Paige, Will Welch, Maryanne Murray and Chris Canipe

Every time Malaysian government investment fund 1Malaysia Development Bhd, or 1MDB, borrowed money, large amounts of the cash were quickly misappropriated, according to investigators. The money followed a circuitous path among private banks, offshore companies and funds, bank records show, and roughly $1 billion landed in the private bank accounts of Malaysian Prime Minister Najib Razak.

That cash is part of $3.5 billion that was embezzled from 1MDB, according to a U.S. Justice department complaint. Investigators from seven countries are trying to figure out what happened to the money and the U.S. moved to seize $1 billion in property in July, including luxury real estate in New York and Beverly Hills, a private jet and art allegedly purchased with 1MDB money. Singapore has charged a banker with money laundering in relation to 1MDB and Abu Dhabi has arrested and frozen the assets of a top official who was deeply involved with the fund. The banker and the official haven’t commented.

This interactive graphic tracks the route that investigators believe the money took from the time it was raised by 1MDB until it landed in the private bank accounts of Mr. Najib at AmBank Bhd., a Malaysian bank, between 2011 and 2015.

The money was raised on three separate occasions and took three separate paths, sometimes flowing directly, while in other cases it split and took different routes, only to be reunited in the AmBank accounts according to the Justice Department complaint. The cash flowed through Singapore, Switzerland, Saudi Arabia, Thailand, the Seychelles, the British Virgin Islands and Curaçao. Other funds disappear, often into accounts controlled by other players in the scandal, the complaint said.

Image result for WSJ 1MDB Money Flow Chart

This description is based on bank-transfer documents, investigative files from two countries, people familiar with transactions and the 136-page Justice Department complaint, which is seeking to seize assets bought with funds misappropriated from 1MDB.

Mr. Najib hasn’t acknowledged all of the transfers into his accounts, but he said that $681 million was a legal donation from the royal family of Saudi Arabia and the Malaysian Attorney-General agreed with that explanation, clearing him of any wrongdoing. Mr. Najib said he returned most of the funds to the Saudi Arabian donor. 1MDB has denied wrongdoing and said it would cooperate with any lawful international investigation.

According to the Justice Department, the money went back to the offshore company that originally sent it to Mr. Najib’s accounts, and from there it was used to fuel other investments and spending by a Malaysian financier allegedly at the center of the scheme named Jho Low. A lawyer for Mr. Low declined to comment.

A portion of the money from 1MDB passed through Saudi Arabia on its way to Mr. Najib’s accounts and $80 million appears to have been transferred by the Ministry of Finance in Saudi Arabia. The origin of the rest of the Saudi money is still under investigation.

TRANSACTION 1

The Saudi Arabian Oil–Venture Money

  How the Money was raised

1MDB borrowed about $1.8 billion for a joint venture with Saudi oil company    PetroSaudi International Ltd.

What Happened to the Money

About $1 billion of the cash went to a Seychelles company called Good Star Ltd.

How the Money Got to Mr. Najib’s Bank Accounts

A co-founder of PetroSaudi, Prince Turki bin Abdullah, received $24.5 million from Good Star before transferring $20 million to Mr. Najib via an intermediary, according to the Justice Department and a person familiar with the U.S. investigation into 1MDB. The same intermediary sent other funds into Mr. Najib’s accounts, bank transfer documents show, but the origin of the funds is still under investigation. PetroSaudi, Prince Turki and Prince Faisal did not respond to requests for comment.

TRANSACTION 2

The Power-Plant Money

 

How the Money was raised

Two bonds worth a total of $3.5 billion were sold for 1MDB by Goldman Sachs to fund the purchase of power plants.

What Happened to the Money

After paying a substantial fee to Goldman, 1MDB was supposed to pay money for a guarantee on the bonds to a unit of Abu Dhabi’s International Petroleum Investment Company called Aabar Investments PJS. Instead, the funds went to the similarly named Aabar Investments PJS Ltd., a British Virgin Islands registered company that IPIC says isn’t part of its corporate structure, which received billions of dollars from 1MDB entities over the years. The money was then distributed to beneficiaries of the alleged fraud, according to the Justice Department.

How the Money got to Mr. Najib’s Accounts

From Aabar BVI, about $637 million went to a company called Blackstone Asia Real Estate Partners in the British Virgin Islands, where it was pooled with other funds. Blackstone has no connection to the Blackstone Group, the New York private-equity firm.

Another $463 million went from Aabar BVI to two mutual funds in the Caribbean island of Curaçao and then onto Blackstone Asia Real Estate Partners, which transferred a total of $170 million to Mr. Najib’s bank accounts in multiple transactions during 2012, bank transfer documents show.

TRANSACTION 3

The Abu Dhabi Real–Estate Money

 How the Money was raised

1MDB sold $3 billion in bonds via Goldman Sachs to fund a real-estate joint venture with Abu Dhabi.

What happened to the Money

Immediately after paying Goldman Sachs its substantial fees, 1MDB transferred nearly half of the cash to a series of funds, shell companies and other intermediaries located in the British Virgin Islands and Curaçao. Eventually $1.27 billion ended up in a British Virgin Islands company called Tanore Finance Corp.

How the  Money got to Mr. Najib’s Accounts

Tanore transferred $680 million to Mr. Najib’s accounts. A few months later, $620 million was returned to Tanore before disappearing back into a maze of offshore companies, according to the Justice Department and investigative documents reviewed by the Journal.

The Last Step

The Paths into the Prime Minister’s Bank Account

How it got to Mr. Najib’s Accounts

Of the $1.05 billion Mr. Najib received in his accounts, only $80 million appears to clearly originate with Saudi Arabia, via its Finance Ministry, though the details of that transfer are still unknown. Another $120 million that came via an intermediary based in Saudi Arabia are still under investigation, according to a person familiar with the U.S. investigation. At least $20 million of that $120 million has been traced clearly back to 1MDB by investigators. The remaining $850 million came via Tanore Finance and Blackstone Asia, and has been traced back to 1MDB by investigators, according to people familiar with the probe.

What Happened to the Money

Mr. Najib used the money in his AmBank accounts for personal and political spending, according to investigative documents reviewed by the Journal that detail more than 500 transactions. He wrote checks to politicians in his political party and also paid millions of dollars for personal expenses, including $130,625 at a Chanel store in Hawaii and €750,000 at a jewelry store in Switzerland.

16 thoughts on “How $1 Billion Made Its Way to the Prime Minister Najib Razak

  1. The 1MDB story, as I said before, will not end until there is justice for Malaysians. Najib must realise that neither he nor any other Prime Minister before and after him can act with impunity. He should learn the first principle of management and this is that you can delegate authority for action and execution, but the responsibility remains at the top of the totem pole. As the great Harry S Truman said “The Buck stops here”.

    So my advice to the Prime Minister (not that he will heed it) is that if you cannot take the heat, you should get out of the kitchen and face the consequences of your actions. The message is irrefutably clear that he can go voluntarily resign or face rejection by Malaysian voters (if he has the guts to call for free and fair GE-14).

    Tok Cik and Orang Malaya, what do you guys think?–Din Merican

  2. At the onset, most Malaysians knew that it was all an Arabian tale when he said the money was donated by an Arab royalty. There are two things people never do;

    1. Give you hundreds of millions without any condition attached
    2. Return the same hundreds of millions to the donor

    Some of you may remember a story in the press of how Rosmah found something valuable belonging o an Arab royal family while on a cruise and when she returned it, the royalty was so very happy with her like she’s saved his life? I thought it was a fishy story and looking back, I think the story was somehow related to the 1MDB caper, like a deal was hatched successfully for her to squeal in delight.

  3. I always wonder how people use the billions they may have collected/accumulated by whatever means as a person can take only three meals a day a place to stay and a vehicle to travel and clothes to wear especially if all these are paid for by others who may include rakyat or shareholders or donors or followers?

  4. According to SR, our own AG estimate USD7billion is unaccounted for. The DOJ identified half only and we only know of US$1b Najib has taken for himself which he still had most of it. Until the rest US$6b is known in full detail, all we know is just still the tip of the iceberg.

  5. Quote:- ““The Buck stops here”

    That was exactly what happened when 761m bucks stopped at his bank account.

    Qoute:- “….a person can take only three meals a day a place to stay and a vehicle to travel and clothes to wear…”

    …and when the above has been met, what do you do?

    Perhaps I am right that you did not go to the University of Pennsylvania’s Wharton Business School? Neither did I.

    But if you had you would probably know that if you have a billion bucks you pay for 3 gourmet meals a day for everyone who says what a fantastic guy you are, book luxury hotel rooms in London, New York and Paris for them, ship them there in your multi-million dollar yacht and of course wear silk pajamas to sleep with others who prefer not to wear anything.

    And if all these are paid for by the “rakyat or shareholders or donors or followers”, so much the better.

    But then we all know that good things never last forever. Things, great and small, got to be paid for in form or another. The Law of the Universe, which applies to everyone except God, says that you cannot get something from or for nothing.

    But there are people who actually think the said Law, (including man made laws), does not apply to them.

    Finally there is the Law of Karma, (a subset of the Universal Law), which some people are starting to feel its effects.

  6. Najib and the UMNO top-guns make up Ali Baba and 40 (must be a lot more) thieves.

    How one can still keep a straight face and continue to head and run a Government is mind boggling – uniquely Boleh Malaysia!

  7. Great work, as ever, Din. More power to you in spreading the word. Best, DJ
    ________________
    Dean,

    You, our companions on this blog and I are doing our best to spread the message, but we are fighting a losing battle in Malaysia. That said, we are stubborn enough to persist despite the odds. Keep writing and maybe there is light at the end of this long and dark tunnel.–Din Merican

  8. End of the day brothers and sisters.. Najib and his beloved will fly away, recent
    Site shows rosmah was carrying away her loot on a chartered airplane paid by malaysian govt. Hence physical proof has been shown. Good day folks..

  9. Quote:- “Najib and his beloved will fly away….”

    The World has gotten a lot smaller and rounder since the Marcos days. Rounder because there are no more corners to hide.

    As the Americans are now in the game, they would, we hope, say….you can run, but you can’t hide. If the Najibs, Riza, Jho Low, et al, need to stay for the rest of your lives in Khazakstan, that itself is an imprisonment, and their other children, (except perhaps for one daughter), and siblings cannot hold their heads high also.

  10. For once I agree with Che Det that the Malays are happy with the Dedak of BR1M that they fail to recognize and get upset with the brazen stealing of the 1MDB funds running into the billions. While Malays have been known to be docile and polite and always forgiving and leaving it to Allah, with the usual “Dah Rezeki Dia”, this 1MDB scandal should awaken them to the reality. But Melayu Mudah Lupa and Melayu Mudah di Gunakan. The Malays are very forgiving and soon all these will be forgotten and Jibby and FLOM will just kind of fade away unpunished. Alas nasib Melayu di negara sendiri.

  11. Mrs. McClane: “After all your posturing, all your speeches…you’re nothing but a common thief.”
    Hans Gruber:” I’m an exceptional thief, Mrs. McClane!”
    -Die Hard,1988

  12. I just reread Richard Nixon’s Watergate and the modus operandi of Najib is very similar to Nixon’s approach. Buy off anyone that can be compromised or “fired them” using a proxy until someone can be his yes man as a replacement. we are in Act Iv and the only dissimilar thing about the USA and our country is that the USA constitution works to impeach Nixon and doubtful about the “people in the corridor of power/citizens”of Malaysia to do the right thing.

  13. Doubt Malaysia could not be so different from Philippines and Indonesia.

    The best of what can be done is to get organized, and making a resolution on how to get organized for today, having to live without them.

    http://www.bbc.com/news/world-asia-21022457 # on Marcos fortune

    http://www.nytimes.com/1998/01/16/business/suharto-billions-special-report-for-asian-nation-s-first-family-financial-empire.html?pagewanted=all

    http://www.sarawakreport.org/2016/04/found-sarawaks-stolen-wealth-is-locked-in-a-treasure-trove-in-the-southern-united-states/

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