Key to $4 billion fraud case: Banker who says he ‘lied a lot’

It seemed like a jocular question, meant to provoke the star witness: “Do you think you’re good at lying?”

But that is the crucial question at the center of what will likely be the only trial on American soil in one of the greatest cases of international kleptocracy in history, the plunder of billions of dollars from the Malaysian people.

A former Goldman Sachs banker, Roger Ng, is accused of participating in a kickback and kickback scheme that enabled the fraud, which looted more than $4 billion from a Malaysian sovereign wealth fund and bought a royal ransom of jewellery, art and real estate from Manhattan to London to Beverly Hills.

Mr. Ng’s former boss at Goldman, Tim Leissner, was for years one of Goldman’s most powerful dealmakers in Asia. Now he’s the government’s key witness – and an admittedly prolific maker. On the stand in a Brooklyn federal courtroom, he recognized fellow deceivers, investigators and his three wives. But when Mr. Ng’s lawyer asked him if he was a good liar, Mr. Leissner coldly replied: “I don’t think so.

Mr. Leissner’s 10 days of testimony – including six days of searing cross-examination – exposed the details of a global fraud that toppled the Malaysian Prime Minister and coerced Goldman Sachs, one of the most prestigious financial institutions in the world. world, to appear before an American judge. and admit, for the first time in 153 years of history, that he was guilty of a crime.

The question for the jurors: How true was what Mr. Leissner said?

Mr Leissner admitted in court that he had ‘lied a lot’, including presenting a fake divorce decree to his now estranged wife, model and fashion designer Kimora Lee Simmons, to marry him there Eight years. But he insists he is telling the truth about Mr Ng, who prosecutors say helped line the pockets of officials in Abu Dhabi and powerful Malaysians close to then Prime Minister Najib Razak.

Money looted from the sovereign wealth fund 1Malaysia Development Berhad, or 1MDB, has funded a vast spending spree: paintings by van Gogh and Monet, a yacht docked in Bali, a private jet and a transparent acrylic grand piano donated to a model. He financed a boutique hotel in Beverly Hills, bought a share of EMI’s music publishing portfolio and helped make “The Wolf of Wall Street,” Martin Scorsese’s film about Wall Street corruption that won Leonardo DiCaprio a Golden Globe.

The trial could be the last act of the scandal. Goldman Sachs paid $5 billion in fines and pleaded guilty on behalf of an Asian subsidiary. Mr. Leissner has pleaded guilty and is awaiting sentencing. Mr. Najib, the former prime minister, was found guilty in his home country and sentenced to 12 years in prison.

The only other central character in the plot is unlikely to ever go to trial: Jho Low, the brash financier accused of being the architect of the scheme, is a fugitive who lives in China, beyond the reach of US prosecutors.

Mr Leissner said Mr Low was the ‘decision maker’ on all things 1MDB, but Mr Ng was his main contact at Goldman, which earned around $600 million in fees for arranging the $6.5 billion dollars in bond transactions for the fund.

“Roger made him one of his clients,” Mr. Leissner said.

He testified that Mr. Ng held numerous meetings to plan the scheme, including one at Mr. Low’s flat in London during which Mr. Low drew boxes on a piece of paper with everyone’s names. officials who receive bribes and gifts. For helping arrange the payouts, Leissner said, he raised more than $80 million. Prosecutors argue that Mr. Ng’s share was $35 million.

Lawyers for Mr. Ng say Mr. Leissner exaggerated and twisted the facts to please prosecutors and get a lighter sentence. According to them, the money Mr. Ng received was intended to repay a legitimate debt that one of Mr. Leissner’s wives owed to Mr. Ng’s wife.

“I am prepared to show this jury that they are a liar,” Mr. Ng’s lead attorney, Marc Agnifilo, told Judge Margo K. Brodie, Chief Judge of the U.S. District Court for the Eastern District. of New York, during a break in the proceedings. He described Mr Leissner as “deceitful” and “cunning”.

“There aren’t many guys like him,” Mr. Agnifilo said.

Mr. Leissner’s credibility has been an issue since the start of the investigation. In a campaign to cast Mr Leissner as a rogue employee, the bank told regulators and law enforcement officials that he was a master con man who deceived everyone at the bank.

Rebecca Roiphe, a former prosecutor and New York Law School professor specializing in legal ethics, said it might be difficult to trust such a witness, but “it’s not a fatal blow.”

She said a prosecutor can argue that a witness is “a horrible person” and “serial liar” who had “a Jesus coming moment”.

“It can work when you have really bad people who have lied a lot,” she said.

Mr. Agnifilo asked Mr. Leissner to clarify how he – and not Mr. Ng – oversaw the payment of most of the bribes. He highlighted Mr. Leissner’s close relationship with Mr. Low by asking Mr. Leissner to confirm his attendance at a starry 31st birthday that Mr. Low arranged for himself in Las Vegas in 2012. (Mr. Leissner said Mr. Ng also attended, although Mr. Ng was not on the guest list.)

Mr Agnifilo also asked Mr Leissner to recount the many ways he cheated on his wives, especially Mrs Simmons. Mr Leissner admitted he used an email account in the name of his second wife, Judy Chan, to communicate with Ms Simmons while he was dating her, and that he was still married to Ms Chan when he and Mrs. Simmons got married. . (Mr. Leissner was also legally married to another woman when he married Ms. Chan.)

And Mr. Agnifilo punched holes in Mr. Leissner’s accounts of the details of the 1MDB scheme, particularly the pivotal meeting at Mr. Low’s apartment. He asked Mr Leissner why he told the FBI after his June 2018 arrest that a Morgan Stanley banker was also present.

Mr. Leissner said he did not recall saying that and did not know why it would appear in an FBI agent’s write-up of the interview. When shown a copy of the FBI report, Mr. Leissner replied, “I don’t know who wrote this or how this report was written.”

Mr. Agnifilo also questioned Mr. Leissner – who was questioned by law enforcement around 50 times before and after his August 2018 guilty plea – about how he disclosed details of the meeting. Mr Leissner had no explanation for why he had not mentioned Mr Low writing people’s names on a board until an interview with the FBI in April last year.

When forced to discuss some of his deceptions, Mr Leissner appeared almost sheepish, including when he testified that he had used some of the looted money to buy a $10 million house to one of his girlfriends so that she does not go to the authorities.

Mr Leissner said he was not proud of his lies and that he lied to the FBI after his arrest because he was afraid. Eventually, however, he “returned the favor,” he said.

As part of his plea deal, Mr. Leissner agreed to give up $44 million and shares in a company worth hundreds of millions more. He avoided spending time in prison thanks to her cooperation. (Mr. Ng spent six months in a Malaysian prison before being extradited to the United States in 2019.)

Mr. Leissner’s cooperation helped prosecutors capitalize on a guilty plea against Goldman, a typical prosecution strategy of making a deal with a white-collar defendant to land a proverbial bigger fish. But it is unusual for Mr. Leissner to testify against someone he once supervised.

“In a case like this, you hope to avoid a situation where you have a cooperator testifying against someone who is a subordinate,” Ms Roiphe said.

Some lawyers have speculated that federal prosecutors did not expect to have to put Mr. Leissner on the stand. Instead, they may have banked on a guilty plea from Mr. Ng before a trial, keeping much of Mr. Leissner’s dirty laundry secret.

Mr. Ng’s trial is expected to last at least another two weeks, and it is unclear exactly how Mr. Leissner’s testimony will factor into jury deliberations. The government is calling other witnesses to testify about how the two men violated Goldman rules by researching the lucrative bond-underwriting business, and to examine the banking records of Mr. Ng and his wife.

Even if the jury trusts Mr. Leissner’s testimony, the litigation may not be over.

The trial had to be adjourned for several days to give Mr. Ng’s lawyers time to review tens of thousands of emails and other private documents belonging to Mr. Leissner that the prosecution did not turn over until after the start of the trial. Prosecutors called the delay “inexcusable.”

Mr Agnifilo said the government’s failure to produce the documents in a timely manner hampered its ability to prepare for trial. Legal experts said the issue could give Mr Ng grounds for appeal if he is found guilty.

“It’s inexcusable and messy work,” Ms Roiphe said. “There’s an obligation to get it right, especially when you have a big, high-profile case.”

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