This relatively lowly employee of Goldman Sachs was extradited by the PH government to face charges in the US back in 2018. Like his South East Asia boss Tim Leissner he was in a position to provide considerable detail about the participation of the top American bank in the 1MDB mega-fraud, which his top lawyer Marc Agnifilo has flamboyantly described as “one of the largest criminal schemes in the history of civilization”.
Meanwhile, the bank itself has worked frantically to pin the blame for the entire sorry episode on Ng and Leissner, depicting them as ‘bad apples’ who gulled those higher up in bank into undertaking the hugely profitable and obviously suspicious bond deals it issued on behalf of 1MDB, followed by a planned IPO designed to conceal the thefts by getting GLCs to buy into this non-profit making enterprise saddled with crushing debt.
As Agnifilo puts it:
“In reality [it] was a massive Ponzi scheme that Low commenced in 2007 and that would crescendo in a potentially lucrative Initial Public Offering on an entity called 1MDB Energy in late 2014 or 2015”.
Ng and Leissner are accused of receiving millions in kickbacks. Their seniors also got millions but in bonuses instead, thanks to the $600 million the bank earned in commissions.
Leissner accepted a guilty plea in which he pointed the finger at a host of so far unnamed senior partners at the bank, whom he said conspired with him. His admissions matched the criminal charge issued against himself, Roger Ng and Jho Low by the US Department of Justice (DOJ), which also made clear that a host of senior figures at the bank were implicated in the self same frauds.
At which point Goldman Sachs settled with the DOJ by paying a slew of fines totalling $2.9 billion and accepting a Deferred Prosecution Agreement last month that has for now kept the details of who else at Goldman Sachs did what under wraps. Evidence of future transgressions would allow the prosecution to be re-opened (see below).
That has left Roger Ng’s case on the table, since unlike Tim Leissner he has refused to plead guilty. Leissner is due to receive his sentence early next year and unlike his fat cat bosses, who went off partying in the Hamptons following their separate deal with the PN government in Malaysia, he is likely to face custodial terms.
Roger Ng appears to have decided to risk harsher penalties and fight to prove what he regards as his innocence, which could well bring down others with him as details come out in open court.
This week his lawyers released Ng’s first defence document, where he makes plain that he regards himself as having been set up by the bank as the classic ‘fall-guy’. He says far bigger fish than he were driving the 1MDB operation and claims the dirty bank accounts into which stolen money was detoured from the bond offering made by Goldman were managed by Leissner, IPIC officials and … Rosmah Mansor, not him:
“Soon after Project Magnolia closed on May 21, 2012, approximately $577 million of the bond proceeds were allegedly diverted from 1MDB through numerous wire transfers to bank accounts owned and controlled by Low, Leissner, a high-level official at IPIC, and the wife of Najib.”…
“As part of the Government’s effort to make Goldman pay for its corporate-wide failure to recognize that Low and Leissner were using the company as part of a criminal scheme, it has errantly indicted Ng, who, the evidence will show, was absolutely not involved in the stunning crimes committed by others”
[Roger Ng’s Eastern Dist of New York court deposition]
Admittedly, Ng’s family members did receive two sets of multi-million dollar payments of stolen 1MDB money via Tim Leissner. However, his lawyers claim this was just money owed on separate business deals and neither he nor his family were aware of the connection. He also claims the US has no jurisdiction to try his case.
However, perhaps rather more to the point, Ng’s case makes clear that in order to defend himself he needs to be supplied with a disclosure of all the details made available to the Government in its own deferred prosecution of Goldman Sachs as a whole.
This would appear to indeed be his right as a defendant if copious evidence has been gleaned about the participation of all those other people at the bank who are seeking to let him take the full penalty whilst walking free themselves. After all, why should he as a defendant and the jury on the case be kept in the dark about other criminal acts by his seniors at the bank that might exculpate him for his own role or at least mitigate his actions?
It can be guaranteed therefore that the heads of Goldman Sachs would prefer to see Roger Ng settle his case or for the DOJ to conveniently decide to drop the charged having decided they don’t have jurisdiction after all? Let’s see who blinks first now that this Malaysian banker has decided that he is not prepared to play the role his seniors so kindly laid out for him – i.e. to take the rap.
Class Action Civil Suit Spills More Beans
That is not all that is left to bother Goldman when it comes to outstanding legal suits on 1MDB. There is another civil suit that has not hesitated to name names and state specific accusations of malfeasance against the highest officials at the bank. This is the class action suit by shareholders filed last year which cites former CEO Lloyd Blankfein, the present CEO David Solomon and the former Presedent Gary Cohn as named defendants accusing them of being knowing and active participants in the illegal acts over 1MDB that caused so much damage to the bank and thus the value of their shareholdings.
The civil law suit lays out in excruciating detail claims that these individuals over-rode the warnings and advice of compliance officers and senior partners at the bank to steer clear of Jho Low and 1MDB.
As Ng confirms in his own suit:
“Goldman, or more particularly, certain high-level representatives in the legal, compliance and investment banking divisions, who knew that Low might be a fraud and were specifically warned by Ng, among others, but continued to deal with him anyway…..
In perhaps the most amazing twist of the case, it was Roger Ng who as early as March 2010 specifically warned his superiors at Goldman that Low was a politically exposed person, that Low was not to be trusted, and that Goldman should use caution in dealing with Low… Ng’s warnings were shared with the highest levels of the compliance and legal divisions of the company. The company did not listen to him. Yet, while Low remains a fugitive, and while Goldman Sachs Group, Inc. has secured a DPA [Deferred Prosecution Agreement], and while scores of high-level Goldman partners completely escaped criminal liability, and the only person going to trial in the United States for one of the largest financial crimes in recent memory is Ng, the man who warned Goldman of all of this in March 2010…”
Therefore, even if Roger Ng’s high stakes gambit succeeds in its most obvious objective, which is to get the criminal case against him dropped in the United States (ostensibly for some other reason than to avoid devastating embarrassment to the hierarchy of Goldman Sachs now the bank has ‘paid its dues’) this civil suit remains a threat. The bank has submitted its request that the court should strike it out entirely and a ruling is pending.
More Dodgy Doings In KL
Yet even as the struggle to put all this action behind it continues in the States, another questionable development back in Malaysia may potentially have placed the bank back on the legal hook.
Despite its pledge of best behaviour in return for its ‘DPA’ Goldman has nonetheless requested non-disclosure clauses with regard to the details of its payment of its $3.9 billion settlement to close the criminal cases brought by the previous government against 17 bank employees. This according to Malaysia’s new Law Minister who helped the bank rush through its reduced payment agreement with PN.
As a result the management of this vast sum of cash has been made an Official Secret by the new Malaysian government, which just happens to be peopled by the same political parties that proved willing to cover up for Najib during the original 1MDB heist.
It represents a highly suspicious avoidance of proper transparency, as anyone can see and as has been pointed out already by the deposed former prime minister, Dr Mahathir. He was after all unseated in a backdoor coup by rebels who have returned to power the deposed UMNO party that was responsible for the 1MDB scandal in the first place.
The bank is therefore in danger, once again, of being shown to have ‘turned a blind eye’ to the overwhelming likelihood of an instance of foreign bribery and backhanders being paid out of money surrendered by the bank to get itself off serious criminal proceedings against it in Malaysia.
Enough to re-open a deferred prosecution should such suspicions prove to be the case?