Former Goldman Sachs Partner Begins 1MDB Testimony

A former Goldman Sachs partner began testifying against his former colleague on Wednesday in a trial over the looting of hundreds of millions of US dollars from Malaysia's 1MDB sovereign wealth fund, one of the biggest scandals in Wall Street history.

Prosecutors called Tim Leissner, the former chief of Goldman's Southeast Asia operation, as their star witness in the trial of Roger Ng, the bank's former head of investment banking in Malaysia. Ng has pleaded not guilty to conspiring to launder money and to violate an anti-bribery law.

Prosecutors said in opening statements on Monday in Brooklyn federal court that Ng, 49, received millions in kickbacks for helping embezzle funds from 1MDB. Leissner, 52, in 2018 pleaded guilty to similar charges and agreed to cooperate with the government's investigation.

Ng's defence lawyer, Marc Agnifilo, said in his opening statement that Ng had no role in the scheme allegedly perpetrated by Leissner and Jho Low, a Malaysian financier who served as an intermediary for deals in which Goldman helped 1MDB sell US$6.5 billion in bonds.

US prosecutors say Goldman earned US$600 million in fees from the deals and that US$4.5 billion of the funds raised was diverted. The bank in 2020 paid a nearly US$3 billion fine and arranged for its Malaysian unit to plead guilty in US court.

Under questioning by Assistant US Attorney Drew Rolle, the Germany-born Leissner said he conspired with Ng, Low and others to embezzle some of the funds Goldman raised for 1MDB, use some of the money to bribe officials to win business for the bank, and keep some for themselves.

"The bribes and kickbacks made the transactions possible," he testified. He said that he hid the money through offshore shell companies to avoid raising red flags with banks.

"Had we told any bank the truth, this wouldn't have worked," Leissner said.

Prosecutors have acknowledged that Leissner, who has not yet been sentenced, will receive a lighter punishment as a result of his cooperation, but said Leissner's testimony will be backed up by other evidence.

Agnifilo has countered that Leissner lied to prosecutors about Ng's involvement. He spent much of his opening statement attacking Leissner's credibility, portraying him as a socialite who stole to finance a lavish lifestyle.

A lawyer for Leissner declined to comment.

Low, the accused mastermind behind the scheme, was indicted in the United States alongside Ng in 2018. He has not been arrested by US or Malaysian authorities. (Reuters)