A $4.5 billion corruption scandal allegedly linked to a Goldman Sachs exec who married Kimora Lee Simmons is coming to an end
BEVERLY HILLS, CA – JANUARY 12: Kimora Lee Simmons (L) and Tim Leissner attend The Weinstein Company & Netflix’s 2014 Golden Globes After Party at The Beverly Hilton Hotel on January 12, 2014 in Beverly Hills, California.
(Photo by Araya Diaz/Getty Images for The Weinstein Company)
- Malaysian police have issued an arrest warrant for Jho Low, the financier they believe is at the center of a corruption scandal that syphoned $4.5 billion from Malaysia’s sovereign wealth fund.
- Separately, Tim Leissner, a former Goldman Sachs partner and Southeast Asia chairman, is negotiating with American prosecutors over a potential guilty plea regarding his alleged role in the scam, according to the Wall Street Journal.
- The moves would bring to a close one of the most spectacular financial corruption cases of recent memory: Low allegedly used the money to party with Leonardo DiCaprio, Miranda Kerr, and Paris Hilton. He once bought a $1.29 million necklace for model Miranda Kerr.
- Leissner is married to Kimora Lee Simmons, the model and designer.
- The FT once said of him: “His partying ability was also legendary.”
- Business Insider’s account of Jho Low’s life and the 1MDB scandal was first published on August 17, 2017.
Malaysian police have issued an arrest warrant for Jho Low, the fugitive financier they believe is at the center of a corruption scandal that syphoned $4.5 billion from Malaysia’s sovereign wealth fund, according to Reuters.
Low was last seen in Hong Kong but is believed to have fled to nearby Macau by ferry, according to the South China Morning Post.
Separately, Tim Leissner, a former Goldman Sachs partner and Southeast Asia chairman, is negotiating with American prosecutors over a potential guilty plea regarding his alleged role in the scam, according to the Wall Street Journal. Goldman earned $600 million in fees from the sale of bonds for the fund, called 1MDB.
It is not clear what Leissner’s talks are about. The Wall Street Journal said:
“One potential charge Mr. Leissner could ultimately plead guilty to would be a violation of the U.S. Foreign Corrupt Practices Act, which bans the use of bribes to foreign officials to get or keep business, according to some of the people familiar with the matter.”
The looming arrest of Low and a potential plea deal with Leissner, would bring to a close one of the more spectacular financial corruption cases of recent memory. Low allegedly used the money to party with Leonardo DiCaprio, Miranda Kerr, and Paris Hilton. And he once bought a $1.29 million necklace for model Miranda Kerr. In August last year, he disappeared. The last recorded sighting of his superyacht was on August 12, just off the coast of Koh Rong Sanloem island, Cambodia.
NEW YORK, NY – OCTOBER 20: Gigi Hadid and Mr. Jho Low attend Angel Ball 2014 hosted by Gabrielle’s Angel Foundation at Cipriani Wall Street on October 20, 2014 in New York City.
(Photo by Dimitrios Kambouris/Getty Images for Gabrielle's Angel Foundation)
Leissner has also had a colorful life. His wife is Kimora Lee Simmons, the former model, TV star, and designer of the Baby Phat clothing line, who was once married to music producer Russell Simmons. The pair were married in 2014, two years before he quit Goldman. The Financial Times once described Leissner this way: “His partying ability was also legendary, and even rivals admit he would still show up on time for meetings, however late the night before had ended.” Leissner and Simmons attended Harvey Weinstein’s Golden Globes party in 2014, for instance. The party was once the hottest ticket in Beverly Hills — years before the unrelated Weinstein scandal broke.
The bank told the Wall Street Journal:
“Since we suspended Mr. Leissner, we have discovered that certain activities he undertook were deliberately hidden from the firm, which we have brought to the attention of the relevant authorities.”
Currently, Low is the target of an Interpol “red notice”— which requires local authorities to detain him — sought by Malaysia in the United Arab Emirates, Indonesia, India, Myanmar, China and Hong Kong.
Neither Leissner nor Low have been charged. Low has repeatedly denied wrongdoing in the past.
LOS ANGELES, CA – JANUARY 26: (L-R) Producer Swizz Beatz, recording artist Alicia Keys and Owner, EMI Music Publishing and Chairman EMI Music Publishing Asia Jho Low attend the 56th GRAMMY Awards at Staples Center on January 26, 2014 in Los Angeles, California.
(Photo by Christopher Polk/Getty Images for NARAS)
The following account of Jho Low’s life was first published by Business Insider on August 17, 2017:
A black Rolls Royce purrs to a halt outside the Atlantis Hotel in Abu Dhabi. The sun has set, a woman is playing the harp and there are lit candles strewn across the beach.
A couple gets out of the car and walks onto a beachside stage, where a single table has been set for dinner. Opposite the table, a board of lights spells out “Jho <3 Elva."
Overhead, two parachutes appear. Two men in slick black tuxedos land on the beach, each carrying a box. Elva has her face in her hands, Jho is laughing.
The men present Elva with two Chopard necklaces, and a spectacular fireworks display begins.
As the fireworks draw to an end, the camera cuts to the Rolls Royce, now driving away. The logo for Ali Bakhtiar Designs, a wedding planner in Dubai, appears, and the video fades to black.
This, allegedly, is a video of Malaysian businessman Jho Low’s failed proposal to Taiwanese pop star Elva Hsiao. The two did not get engaged — Hsiao denied it had been a proposal at all — and gossip columns across Malaysia had a field day.
Jho LowYouTube, Googal TV
Lho’s attempts to buy his way into an extravagant, A-lister world went beyond the fanciful: the US is reportedly preparing criminal charges against the 35-year-old for allegedly misappropriating $4.5 billion from a Malaysian sovereign wealth fund, known as 1MDB. At the time of writing, Low is innocent as a matter of law. He has never been found guilty in any court, nor been the subject of any ruling or judgment against him.
But a civil lawsuit filed in a California federal court alleges that, between 2009 and 2014, Low and his associates moved $4.5 billion from Malaysian fund 1MDB into bank accounts all over the world, through transactions made to look like legitimate investments
The money supposedly financed their lavish lifestyles, enabling Low to party with the likes of Leonardo DiCaprio, Miranda Kerr, and Paris Hilton. US authorities are now trying to claw back the assets bought with the money, which include an original Picasso, a superyacht and a private jet.
Elva Hsiao, who allegedly turned down Low’s marriage proposal on video.YouTube
Low himself has disappeared, both on social media and in real life. The last recorded sighting of his superyacht was on August 12, just off the coast of Koh Rong Sanloem island, Cambodia. On Monday, an application was made to the Malaysian High Court to compel the Inspector-General of Police to arrest Low, and to bring criminal charges against him for the scandal.
Low’s lawyer did respond with comments, but marked them as not for publication.
His representative has denied any wrongdoing in an email to Bloomberg in July.
“No wrongdoing has been proved in any jurisdiction relating to the alleged misappropriation of 1MDB funds,” the statement said.
Low’s story is every bit as extraordinary and self-indulgent as that of Jordan Belfort, the corrupt stockbroker on whose life Hollywood blockbuster “The Wolf of Wall Street” is based. In an ironic twist, the film itself was bank-rolled with money stolen from 1MDB.
Low has sought to cultivate relationships with people more wealthy and powerful than himself from a young age. But his beginnings were not meagre. He was the youngest of three children born to well-off parents in Penang, Malaysia. His father was a successful businessman, and he studied at Harrow in his final two years before university, one of the UK’s most prestigious boarding schools.
It was there he was introduced to members of some of the world’s most elite families, including the son of the former King of Jordan and Abu Dhabi royalty, people he seems to have aspired to emulate.
“That time was a very important time for me,” Low told Malaysian newspaper The Star in 2010. “That’s when I felt that I built the core foundation of contacts for the future.”
These friendships endured, and both Abu Dhabi’s sovereign wealth fund, Mubadala Development Co, and Kuwait’s Investment Authority later become embroiled in the web of secretive transactions that funnelled billions out of Malaysia.
Another well-connected individual who later became involved is Riza Aziz, stepson of Malaysian Prime Minister Najib Razak, whom Low met while in London. The Prime Minister himself was accused of corruption after $681 million of 1MDB’s money allegedly ended up in his personal bank account. However, he was cleared of corruption charges by Malaysia’s attorney general last year, and has not been named by US authorities.
In 2000, Low enrolled at the University of Pennsylvania’s renowned Wharton Business School, where he firmed up his contacts. Like many aspirational business students, he founded a company, The Wynton Group. Unlike most students, Low had $25 million of initial funding.
The money, he told The Star, had mainly been provided by “my family and close Middle Eastern and South-East Asian friends.”
Jho LowYouTube, Jynwel Capital
After Wharton, Low and some friends moved to New York. A lavish lifestyle drew press attention, and it was Low who was thrown into the limelight. But what he told The Star suggests these friendships — with people of greater “prominence and wealth levels” than himself — had a transactional element to them.
“I wouldn’t say I was the fall guy. I am the person who called and made the reservations, the bookings and so on,” he said.
“I think a relationship with an investor is not just about managing their money well… If my friend says he wants a flight urgently to somewhere or he wants a dinner reservation at a well known place, I’ll do my best to make it happen,” he said, aged 28 at the time.
Low began life with enough money and privilege to get close to a world he wanted to become part of. His relentless drive, contacts, and the billions of dollars that came out of 1MDB let him buy into it.
“Are you telling me the Prime Minister doesn’t make his own decisions? There are so many other people who get away with ridiculous billions and billions and billions,” Low told Euromoney in 2015.
Low was appointed as a special advisor to the Terengganu Investment Authority (TIA), the forerunner of 1MDB, in 2009, according to Malaysia’s Public Accounts Committee’s records. He also boasted to The Star that he had been “involved” in establishing TIA in 2009, “given my relationship with the Middle East and insight I had on how they had set up their sovereign wealth funds.”
Later in 2009, TIA was expanded and renamed 1MDB, a decision taken shortly after the election of Prime Minister Razak. From this point on, says Low, he ceased to be involved.
“I don’t play any role in 1MDB, and I did not get compensated by 1MDB or any other government-owned entities, although some blogs have mentioned that I did. That is untrue,” he told The Star in 2010.
Low’s Wynton Group was linked to 1MDB in the 2012 McKillen judgment relating to the Coroin group. https://www.judiciary.gov.uk/wp-content/uploads/JCO/Documents/Judgments/mckillen-judgment.pdf
But official 1MDB minutes show Low attended at least one board meeting in September 2009. Moreover, a 2010 bid by Low’s Wynton Group for controlling shares in the Coroin hotel group included a letter from 1MDB, confirming its support for the offer. According to a UK High Court judgement, this was followed by a second letter from Wynton, stating the £1 billion bid had “in principle” been fully underwritten by Malaysian government-backed investment funds.
SMM (the Companies Commission of Malaysia) records also link the fund and Low’s father: until September 2016, Low senior was a director of Wonder Bay SDN alongside Tan Sri Ong Gim Huat, who was also a director of 1MDB between January 2010 and May 2016.
Suruhanjaya Syarikat Malaysia
Pascal Le Segretain/Getty Images
In June 2017, supermodel Miranda Kerr handed over more than $8 million-worth of jewellery to US authorities. They had been bought for her by Low in 2014, when the two had allegedly been dating.
Kerr herself is not under investigation and a representative declined to comment.
But the episode is a classic example of Low’s self-assurance.
In February 2014, just before Valentine’s Day, Low asked bespoke jewellery designer Lorraine Schwartz to make a 11.72 carat heart-shaped necklace, with “MK” inscribed on the back. According to the Californian civil lawsuit, the $1.29 million necklace was gifted to Kerr.
8 Stratton Street, London.
“Initial whatever items u can with MK,” Low then texted Schwarz in June, as part of another jewellery order for Kerr. Later that year, Low asked Schwartz, “Can u find me a pink heart diamond? Cost? For a necklace? Light pink is fine, size more imp.”
A $3.8 million, an 8.88-carat diamond was duly found. According to US authorities, the necklace, which Low bought with stolen money, was delivered the headquarters of Myla Lingerie, a company he had bought with stolen money, to an office in London’s Stratton Street, a property he had bought with stolen money.
“I feel it’s just gotten to a point where it’s ridiculous. There are all these guys with their arrows out on me,” Low told Euromoney in 2015.
“Thank you to the entire production team, Joey, Riz, Jho… thank you for being not only collaborators but taking a risk on this movie.”
So said Oscar-winning Hollywood actor Leonardo DiCaprio in his acceptance speech for Best Actor in The Wolf of Wall Street, at the 2014 Golden Globe awards.
Fast forward three years, and DiCaprio too has become embroiled in one of the world’s biggest money laundering cases.
Leonardo Di Caprio in The Wolf of Wall Street.
“The Wolf of Wall Street” was produced by Red Granite Pictures, a production company founded in 2010 by Low’s friend Riza Aziz and Joey McFarland, an investor in a company that booked performers into events. According to US investigators, who are looking to seize the rights to the film, it was bankrolled by money from 1MDB.
Although Low did not receive an official film credit, the Californian lawsuit alleges he helped divert $238 million into Red Granite Pictures in 2012.
The money, it says, helped fund production, but also went towards Aziz’s personal collection of vintage movie posters, Low’s art buying and the various gifts bought for DiCaprio.
A spokesperson for DiCaprio said the actor had voluntarily returned the items and “continues to hope that justice is done in this matter.”
Gifts included Diane Arbus’, ‘Boy with the toy hand grenade,’ Picasso’s ‘Nature Morte au Crane de Taureau,’ and Jean-Michel Basquiat’s “Redman One” collage, which cost over $9 million.
In a 2014 interview with the New York Times, Aziz claimed there was “no Malaysian money” in Red Granite.
Instead, he said, the company’s main investor was Abu Dhabi-based businessman Mohamed Ahmed Badawy Al-Husseiny, of Aabar Investments — the wealth fund Low had worked with in 2010 on the Coroin hotel group deal.
The US civil filing shows some of Red Granite’s money was indeed routed through Aabar Investments, but only after it had been moved from 1MDB.
“As we have stated before, Red Granite is currently engaged in productive settlement discussions with the Justice Department to put this matter behind it and is confident that when the facts come out it will be clear that neither the company nor Riza Aziz did anything wrong,” Red Granite Pictures told Business Insider in a statement.
“In the meantime, post-production work on Red Granite’s upcoming release “Papillon” remains unaffected and on schedule to prepare the film for distribution,” it said.
DiCaprio is not under investigation.
In an even more bizarre twist, some have suggested that one of Low’s close associates, Erik Tan, was in fact Low himself.
In January, former banker Jens Fred Sturzenegger pleaded guilty in Singapore to six of 16 charges, including lying to authorities and reporting false information. The charges included knowingly corresponding with Low, who was using the email address [email protected], and falsely reporting having met Tan in March 2013 when he in fact met Low.
Although US authorities differentiate between the men, they concede: “Tan and Low took deliberate steps to avoid the appearance of an association between Low and Tanore [a Singaporean bank account through which money was laundered, and of which Tan was a beneficial owner] in written documentation.”
“My fellow millennial philanthropists,” began Low, in a self-congratulatory speech at a charity ball in 2014. He launched into a story about his grandfather, a Chinese immigrant to Malaysia, who had made enough money in the 1960s to donate to charities and community centres in his later years.
“Everything he stood for inspires me every day,” said Low, as millions of dollars worth of Malaysian government money allegedly sat in a series of his bank accounts.
Low’s charitable work began with the creation in 2012 of The Jynwel Foundation, a branch of his and his brother’s company, Jynwel Capital. The Foundation’s website claims to “honour the Low family tradition, started by his grandfather, who financed schools, hospitals and community centres.”
Its creation, Low told the charity ball, had been prompted by his 2012 cancer scare, during which time he briefly stopped working. The scare, he said, had served as a “turning point in my life.” Now, he was “determined to be bold.”
The EquanimityYouTube / Dutchmegayachts
This boldness was ostensibly in relation to funding cancer treatment, and the Jynwel Foundation does indeed donate money to the MD Anderson Cancer Centre, among other charities.
Neither the Jynwel Foundation nor 1MDB responded to requests for comment.
The Californian civil filing alleges that, from 2010 onwards, Low acquired millions of pounds worth of prime real estate in the US and London, including a penthouse in Trump Tower for $33 million and the Beverly Hills L’Ermitage hotel.
He bought a Bombardier private jet with two Rolls Royce engines for $35 million, a lingerie company and a substantial investment in music publishing group EMI.
He bought so much art, including Monets, a Van Gogh, and a Warhol, that he was named in ARTnews’ list of the world’s 200 leading private collectors. Low even took out a loan from London art dealership Sotheby’s for $107 million in April 2014, pledging $144 million worth of art as collateral, in order to commission one of the biggest yachts in the world.
The 300-foot yacht is $250 million-worth of the assets US authorities are trying to reclaim. It’s name is Equanimity – meaning composure during a crisis – a quality Low may now need.
This story was updated on August 25, 2017, and on July 10, 2018.
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