1MDB Loot Wasn’t Enough, So Ex-Goldman Banker Stole More

by BLOOMBERG

FORMER Goldman Sachs Group Inc. banker Tim Leissner (picture), who admitted helping rip off hundreds of millions of dollars from Malaysian wealth fund 1MDB, testified he also stole tens of millions of dollars from his accomplices in the fraud.

Leissner, the key government witness in the bribery trial of his former colleague Roger Ng, testified Thursday that “a large portion” of the $6.5 billion raised through three 1MDB bond deals he helped organize with Ng was siphoned off to pay kickbacks and bribes to officials in Malaysia and Abu Dhabi. But the $60 million in kickbacks he kept for himself wasn’t enough, Leissner said.

When Malaysian financier Jho Low, the alleged architect of the massive fraud, asked Leissner to “hold” 145 million Euros ($162 million) in a shell company in Mauritius, Leissner saw an opportunity. Because much of his money was invested in illiquid assets, Leissner told the jury he kept $80 million for himself. He said he then borrowed another $1.25 million from Ng, his subordinate at Goldman.

Leissner said his arrest in 2018 prevented him from repaying Ng any of the money. “I had the intention to pay him back over time but I didn’t have a chance,” he told the jury.

Ng is accused of a money-laundering conspiracy and bribery stemming from the scam at 1Malaysia Development Bhd. Leissner pleaded guilty in 2018 to conspiring to violate U.S. anti-bribery laws, and agreed to cooperate with the U.S. with the hope of getting a more lenient sentence.

In his fourth day of testimony Thursday, Leissner, 52, delved into his personal life including how he lied, stole and cheated. It’s a common practice for prosecutors to highlight the negative aspects of their witnesses to get ahead of anything that could be revealed by defense lawyers during cross-examination.

Leissner said he used some of the money he stole from Low to buy a $50 million boat, part of the Inter Milan soccer team and a Manhattan apartment at 68th Street and Madison Avenue. Some was also used for a down payment on a Los Angeles home he’d share with his new wife, Kimora Lee Simmons, whom he met in 2013, Leissner said.

He said he also invested in a multi-platform media company called All Def Digital Inc. and in Celsius Holdings Inc, an energy drink.

Side Deals

Leissner earlier this week also described efforts he and Ng made to supplement their income from Goldman Sachs – separate from their role in the 1MDB scam – because they were unhappy with how much money the bank paid them.

He described an occasion in which he and Ng tried to help the owner of a copper project in the Philippines sell the business for $50 million. The deal would’ve generated a 7.5% commission for the two of them, netting them a $3.75 million fee. Ng told Leissner that his take would’ve been greater than his annual bonus at Goldman, he testified.

“Roger was not happy with his compensation,” Leissner said Tuesday. “He felt he should have been paid more.”

Leissner said that on one occasion, he even “topped up” Ng’s bonus by contributing cash from his own.

On another occasion, Leissner said he, Ng and another banker, Tan Boon-Kee, planned a transaction involving two Goldman clients in Vietnam.

Tan had a client who wanted to buy warrants in another Goldman client, he said. The buyer wanted to remain unknown to the seller because they felt the owner “would be uncomfortable with them being a shareholder.”

So the three Goldman bankers decided to step in on their own, Leissner said. They hatched a plan to use shell companies to acquire the warrants and then sell them at a markup, he testified.

Leissner said he didn’t disclose the plan to Goldman because it would’ve been a violation of company policy, as the parties involved were clients of the bank. Ultimately, the deal fell through, he said. They couldn’t buy the warrants at a price that would’ve made the transaction profitable for them.

A Goldman representative declined to comment, as did a representative for Tan. While authorities have scrutinized Tan’s potential role in the 1MDB scandal, she hasn’t been accused of wrongdoing.

Ng, 49, has pleaded not guilty and his trial is expected to last as long as six weeks. Leissner is expected to resume his testimony Feb. 28.

Photoshopped Documents

On Thursday, Leissner also confessed he was twice married to two women at the same time. He said he “faked” a divorce decree in order to marry Simmons while still being married to then-wife, Judy Chan Leissner. He also told jurors he’d earlier falsified a divorce document in order to marry Judy Chan in Hong Kong in about 2000.

“I photoshopped the divorce document,” he said of his 2014 marriage to Simmons, a fashion designer.

“Did Judy Chan know?” asked prosecutor Drew Rolle.

“Yes,” he said.

“Did Kimora Lee Simmons know that?” Rolle asked.

“No,” Leissner said.

Leissner said Chan wasn’t as forgiving, In 2014, he wanted to put a $900,000 down payment on a home in Los Angeles for Simmons but said, “Judy did not want to make any transfers related to my new family life in Los Angeles.”

Instead, Leissner said he faked an email claiming Low needed money.

“It didn’t work,” with Chan, he said. “I think she did some research on the Internet and found out I was trying to buy this house.”