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One recent estimate puts the money stashed in offshore financial centers since 1970 at $32 trillion—a figure equal to the combined economies of the United States and China—with hundreds of billions lost in tax revenues.
For the next step of his scheme, Low set up two shell companies in the Seychelles. The firms—ADIA Investment Corporation and KIA Investment Corporation—appeared, given their names, to be related to the Abu Dhabi Investment Authority, or ADIA, and Kuwait Investment Authority, or KIA, two of the most famous, multi-billion-dollar sovereign wealth funds in the world. But the look-alike companies were purely Low’s creation, with no links to Abu Dhabi or Kuwait.
Next, Low had these look-alike offshore companies take minority stakes in the Malaysian construction firms. It now would appear to any prospective business partner doing due diligence that royals from Kuwait and Malaysia, as well as Ambassador Otaiba, and two major sovereign wealth funds, were Low’s partners in plans to develop the Iskandar project.
Goldman colleagues noticed how Leissner had an uncanny ability to make clients feel like they had a deep, personal connection with him. He was a relationship banker, skilled at reeling in important executives through a kind of personal magnetism, rather than a “structuring guy,” one of the mathematical whizzes who priced and sold complex derivative products.
Why not also use the fund as a political-financing vehicle? Profits from 1MDB would fill a war chest that Najib could use to pay off political supporters and voters, restoring UMNO’s popularity, Low promised.
His was a scheme for the twenty-first century, a truly global endeavor that produced nothing—a shift of cash from a poorly controlled state fund in the developing world, diverting it into the opaque corners of an underpoliced financial system that’s all but broken.
Lawyers, unlike bankers, don’t have to conduct due diligence on a client. Details of transfers through IOLTAs, meanwhile, are protected by lawyer-client privilege. While it is illegal for lawyers to abet money laundering, they are not required to report suspicious activity to regulators. The Financial Action Task Force, a Paris-based intergovernmental group that sets standards for stopping fraudulent use of the global finance system, has highlighted the United States’s poor oversight of lawyers as a weak spot in its defenses against money launderers.
Between October 2009 and June 2010—a period of only eight months—Low and his entourage spent $85 million on alcohol, gambling in Vegas, private jets, renting superyachts, and to pay Playmates and Hollywood celebrities to hang out with them.
Low rented a suite of rooms that cost $100,000 per month.
He began to spend eye-popping amounts, running up a $160,000 bar bill at Avenue, a new club in New York’s Chelsea district, on a single night during fall Fashion Week in 2009.
It’s a little-discussed secret that even the biggest movie stars take payment to attend events, and
In the crowd, Leonardo DiCaprio, swimwear model Kate Upton, and Bradley Cooper danced. Among the guests was disgraced investor turned best-selling author Jordan Belfort, and the onetime “Wolf of Wall Street” could not believe what he was seeing.
Leonardo DiCaprio would star as Belfort, with Martin Scorsese directing—quite a coup for a new outfit in the industry like Red Granite. To celebrate, the company had flown Belfort out with his girlfriend, Anne, for the party.
“This is a fucking scam—anybody who does this has stolen money,” Belfort told Anne, as the music thumped. “You wouldn’t spend money you worked for like that.”
“Leo got sucked in,” Belfort later told Swiss journalist Katharina Bart. “Leo’s an honest guy. But I met these guys, and said to Anne, ‘These guys are fucking criminals.’ “I was like, ‘I don’t need these fucking people.’ I knew it, it was so obvious.”
