Crazy story: the JD is investigating a Malaysian financier who embezzled $4.5B from a wealth fund. Chris Christie and other Trumpites involved
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decline (aka Decline)
Aug 29 '18, 06:21
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The U.S. Justice Department is investigating whether a fugitive Malaysian financier laundered
tens of millions of dollars through two associates and used the funds to pay a U.S. legal team
that includes former New Jersey Gov. Chris Christie and a lawyer who represents President
Trump, according to people familiar with the matter.
Jho Low, the Malaysian businessman, has been described in U.S. court filings as playing a
central role in the alleged embezzlement of $4.5 billion from a Malaysian fund called 1Malaysia
Development Bhd.
Malaysian authorities this week separately charged Mr. Low with money laundering in the case,
which investigators suspect may be one of the biggest financial frauds in history. He has been
moving around Hong Kong, Macau and mainland China in recent months, according to people
with knowledge of his whereabouts.
Mr. Low was close to former Malaysian Prime Minister Najib Rajak, who unexpectedly lost an
election in May and was arrested last month in Kuala Lumpur. Mr. Najib has pleaded not guilty
to charges of money laundering and criminal breach of trust in connection with the 1MDB
scandal.
The Justice Department, in July 2016 and last year, filed civil lawsuits in federal court in
California seeking to recover assets from Mr. Low and others including mansions, artwork and
a yacht allegedly bought with 1MDB funds. It is now pursuing a criminal investigation in which
Mr. Low, who has U.S. assets, is a target, these people said.
Since 2016, Mr. Low’s access to the global financial system has been sharply curtailed by banks
wary of handling allegedly tainted funds, according to the people familiar with the matter. That has
made it difficult for him to pay directly for a range of outlays, from lifestyle expenses to legal and advisory services, according to these people.
There is no indication that any of the people who ultimately received payments were aware the
funds could have originated from money Mr. Low allegedly siphoned off from 1MDB. The Justice
Department is investigating Mr. Low’s potential use of two intermediaries to facilitate the
payments through the international financial system, people familiar with the matter say. A
Justice Department spokeswoman declined to comment.
Representatives for Mr. Low didn’t respond to a request for comment. He has previously denied
wrongdoing. The team of lawyers and consultants working for Mr. Low includes Mr. Christie, who briefly
headed Mr. Trump’s presidential transition team; Mr. Trump’s longtime lawyer Marc Kasowitz ;
Bobby Burchfield, a lawyer who has served as the Trump Organization’s outside ethics adviser;
and Ed Rogers, a Washington lobbyist with close ties to the Republican Party.
Mr. Christie is representing Mr. Low in the asset-forfeiture cases in California, a spokesman for
the former governor said. “There has been no communication by Governor Christie with any
other area of government on Mr. Low’s behalf,” the spokesman said, adding there has been “no
inquiry made to him by the Department of Justice with regard to any other investigation
regarding funding or otherwise."
A spokesman for Kasowitz Benson Torres, Mr. Kasowitz’s New York law firm, confirmed the
firm represents Mr. Low in Justice Department matters. “Here, as with all of our clients, our job
as attorneys is to represent and vindicate our clients’ interests; and here, as with all of our nonpro-bono
clients, we are paid for the legal services we provide,” the spokesman said in a
statement.
Mr. Burchfield said, in an emailed statement, that Mr. Low retained his Atlanta-based firm, King &
Spalding, to “advise him on the ongoing investigations,” adding that the law firm “performed
appropriate due diligence on sources of payment.”
“Further, neither I nor King & Spalding has had contacts with any governmental entity, directly
or indirectly, on behalf of Mr. Low, nor has King & Spalding received any inquiries from the
Department of Justice regarding this engagement,” Mr. Burchfield said.
Mr. Rogers declined to comment.
The Justice Department is looking into whether a Thai businessman, Phengphian Laogumnerd,
and American former rap artist Pras Michel, a founding member of the Fugees hip-hop group,
played roles in helping Mr. Low make payments, the people familiar with the matter said.
Former New Jersey Gov. Chris Christie is part of Mr. Low’s U.S. legalteam.
Former Goldman Banker Is in Plea Talks Over Malaysian 1MDB Scandal (July 9)
Malaysia’s Extravagant Ex-First Lady Lands in Graft Investigators’ Sights (June 25)
Jho Low, Alleged Ringleader in 1MDB Scandal, Sought Deal With Malaysia but Was Rejected (June 14)
Fall of a Malaysian Dynasty Puts Target on Alleged 1MDB Mastermind (May 20)
For at least a year, these people say, Mr. Low has relied on Mr. Phengphian to pay
accommodation expenses in Hong Kong and Macau, legal and advisory bills and to keep Mr.
Low’s $250-million yacht, Equanimity, fully staffed and maintained until it was seized earlier
this month. Justice Department investigators are examining records and money flows related
to a series of companies controlled by Mr. Phengphian in Hong Kong and in offshore havens
such as the British Virgin Islands to determine whether Mr. Low’s money was involved, the
people said.
The Thai businessman also handled payments of tens of millions of dollars to Mr. Low’s lead law
firm and advisers, New York-based Kobre & Kim LLP, and British reputation law firm Schillings
International LLP, according to the people familiar with the investigation.
“We do not comment on any specific financial arrangements with our clients due to the
commercial confidentiality and privileged nature of such information,” said Robin Rathmell,
who has identified himself as Mr. Low’s global counsel at Kobre & Kim. Partners at Schillings
didn’t respond to a request for comment.
A representative for Mr. Phengphian said his client “is an independently wealthy businessman.
The source of his income is nothing to do with—and he has not received any money from—Mr.
Low.” The representative added: “What he chooses to do with his own funds is his business alone. The
Department of Justice has never contacted him about anything, neither have they ever asked him about the source of his funds.” Mr. Michel was responsible for bringing on another consultant to work on Mr. Low’s behalf:
Republican fundraiser and venture-capital executive Elliott Broidy, who was vice chairman
of the Trump campaign’s joint fund with the Republican Party during the 2016 presidential
campaign. The route of any payments to Mr. Broidy also are part of the Justice Department
probe, the people said. Mr. Broidy’s lawyer has previously said Mr. Broidy and his wife were hired by Mr.
Michel “to provide strategic advice as part of a broader team to Mr. Low.”
A lawyer for Mr. Michel said: “I do not know what, if anything, the Department of Justice is
currently reviewing, but I am confident that Mr. Michel has not done anything improper.”
The public-integrity section of the Justice Department is separately investigating some of the
lobbying work on behalf of Mr. Low, including whether Mr. Broidy attempted to sell his
influence in the Trump administration to Mr. Low, who in turn was allegedly acting as an agent
of the Malaysian and Chinese governments, people familiar with the investigations said.
A lawyer for Mr. Broidy said: “Elliott Broidy has never agreed to work for, been retained by nor
been compensated by any foreign government for any interaction with the United States
Government, ever.”
Mr. Low has been seeking to influence the administration to drop its investigations into him
and 1MDB, according to people familiar with Mr. Low’s dealings and the Justice Department
investigations. The Justice Department investigations overlap and involve some of the same
investigators, the people familiar with them said. The Washington Post first reported on the
public-integrity investigation.
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