Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World

by Tom Wright

“Money laundering is no victimless crime. It allows criminals to profit from breaking the law. It also facilitates corruption and the abuse of power and privilege,” Branson said. As in the United States and Singapore, the proof of Switzerland’s seriousness in combating white-collar crime would be in criminal prosecutions of Swiss bankers, not rhetoric.

For years, Goldman, Morgan Stanley, and other banks had made huge profits dealing with IPIC, and now suddenly it did not exist.

Otaiba remained in his position, appearing on Charlie Rose’s talk show in the United States to discourse on Middle East politics not long after the Journal published a story in July 2017 on his ties to Low. Ambassador Otaiba was a survivor.

After the Justice Department suit, Deloitte Touche said it had resigned as auditor, and cautioned that 1MDB’s 2013 and 2014 financial statements—accounts that Deloitte had earlier approved—could no longer be relied upon.

Moody’s estimated the government would be on the hook to repay about $7.5 billion of the fund’s debt, a sum equivalent to 2.5 percent of Malaysia’s economy. Foreign investors, worried over the 1MDB scandal, sold Malaysian assets, pushing the local ringgit currency down 30 percent against the U.S. dollar in just a few months.

A few weeks later, at an Asia-Pacific summit that Najib also attended, President Obama, in his last few days in office, made an allusion to Malaysia, one that wasn’t lost on its people. “There are limits to our reach into other countries if they’re determined to oppress their people,” Obama said, “or siphon off development funds into Swiss bank accounts because they’re corrupt.

For years, corrupt rulers have been looting their states; Prime Minister Najib Razak was just the latest in a line that stretches back decades—to the leaders overthrown in the Arab Spring of 2011, and, even further, to Sani Abacha of Nigeria, Suharto of Indonesia, and Ferdinand Marcos of the Philippines. It’s tempting to see this kind of corruption as a disease afflicting poor countries, where kleptocrats live in splendor at the expense of their long-suffering populations. But Jho Low’s crime is a modern take on that old story. The money he took, by and large, was not stolen directly from Malaysia’s treasury or through padded government contracts. Instead, it was cash that 1MDB borrowed on international financial markets with the help of Goldman Sachs.

Low’s genius was he sensed that the world’s largest banks, its auditors, and its lawyers would not throw up obstacles to his scheme if they smelled profits.

On September 12, 2017, President Trump welcomed Prime Minister Najib to the White House. Malaysia’s leader didn’t have a long journey. He was staying with his entourage at the Trump International Hotel, only two blocks away.

Police raided Kuala Lumpur apartment units owned by Najib’s family and carted out $274 million worth of items, including 12,000 pieces of jewelry, 567 handbags, and 423 watches, as well as $28 million in cash.