The key to a $4 billion fraud case: a banker who admits to ‘lied a lot’

It seemed like a jocular question, intended to provoke the star witness: “Do you think you’re good at lying?”

Yet it is the key to what is likely to be the only trial on US soil in one of the largest cases of international kleptocracy in history, the looting billions of dollars of the Malaysian people.

A former Goldman Sachs banker, roger ngis accused of participating in a bribery and kickback scheme that enabled the fraud, which looted more than $4 billion from a Malaysian sovereign wealth fund and bought jewelry, art and real estate.

Ng’s former boss at Goldman, Tim Leissner, was for years one of Goldman Sachs’ most powerful dealmakers in Asia. Now, it’s the key government witness, and a certainly prolific manufacturer. On the bench in a federal court in Brooklyn, he admitted to having deceived his co-workers, the investigators and his three wives. But when Ng’s attorney prodded him with the question of whether he’s a good liar, Leissner coldly replied: “I do not believe it”.

Leissner’s 10 days of testimony, including six days of searing cross-examination, exposed the details of a global fraud that overthrew the prime minister of malaysia and forced Goldman Sachs, one of the world’s most prestigious financial institutions, to appear before a US judge and admit, for the first time in its 153-year history, that it was guilty of a crime.

The question was also for the jurors: How much of what Mr. Leissner said was true?

Leissner acknowledged in court that he has “lied a lot,” including submitting a sham divorce decree to his now-estranged wife, model and fashion designer Kimora Lee Simmons, to marry him eight years ago. But he insists he is telling the truth about Ng, who prosecutors say helped line the pockets of officials in Abu Dhabi and powerful Malaysians close to then-Prime Minister Najib Razak.

Money looted from the sovereign wealth fund “1Malaysia Development Berhad”, or 1MDB, financed a large amount of spending: Van Gogh and Monet paintings, a yacht docked in Bali, a private jet and a clear acrylic grand piano given to a supermodel. He financed a boutique hotel in Beverly Hills, bought a piece of EMI’s music publishing portfolio and helped make “The Wolf of Wall Street,” Martin Scorsese’s film about Wall Street corruption that earned Leonardo DiCaprio a Globe. of gold.

The trial could be the final act of the scandal. Goldman Sachs paid $5 billion in fines and pleaded guilty on behalf of an Asian subsidiary. Leissner pleaded guilty and is awaiting sentencing. Najib, the former Malaysian prime minister, was convicted in his home country and sentenced to 12 years in prison.

The only other central character in the plot is unlikely to ever be tried: Jho Lowthe brash financier accused of being the architect of the scheme, is a fugitive believed to be living in China, out of reach of US prosecutors.

Leissner said that Low was the “decision maker” on everything related to 1MDB, but that Ng was his primary contact at Goldman, which earned roughly $600 million in fees to arrange the $6.5 billion in bonus deals for the background.

“Roger made him one of his clients,” Leissner said.

In addition, he testified that Ng had arranged many of the meetings to plan the plan, including one at Low’s London apartment during which Low drew boxes on a sheet of paper with the names of all officials who would receive bribes and gifts. For helping to organize the payments, Leissner said, he raised more than $80 million. Prosecutors maintain that Mr. Ng’s share was $35 million.

Ng’s lawyers say Leissner has exaggerated and distorted the facts to please prosecutors and get a lighter sentence. They argue that the money Ng received was to pay off a legitimate debt one of Leissner’s wives owed Ng’s wife.

“I am ready to prove to this jury that he is a liar,” Ng’s lead attorney, Marc Agnifilo, told Judge Margo K. Brodie. And he described Leissner as “deceitful” and “cunning.”

“There aren’t many guys like him”said Agnifilo.

Leissner’s credibility has been an issue since the investigation began. In a campaign to portray him as a rogue employee, the bank told regulators and law enforcement officials that he was a master con man who had cheated everyone in the bank.

Agnifilo also had Leissner recount the many ways he cheated on his wives, particularly Mrs. Simmons. Leissner admitted that he had used an email account in the name of his second wife, Judy Chan, to communicate with Simmons while he was dating her, and that he was still married to Mrs. Chan when she married Simmons (Leissner was also legally married to another woman when he married Chan).

And Agnifilo punched holes in Leissner’s accounts of the details of the 1MDB scheme, particularly the pivotal meeting at Low’s apartment. He pressed Leissner about why he told the FBI after his arrest in June 2018 that a Morgan Stanley banker had also been present.

Leissner said he didn’t remember saying that and didn’t know why the FBI would be there. Shown a copy of the FBI report, Leissner replied, “I don’t know who wrote this or how that report was written.”

Agnifilo also questioned Leissner, who was interviewed by police some 50 times before and after his guilty plea in August 2018, about how he had leaked details of the meeting. Leissner didn’t have an explanation for why he didn’t mention Low putting people’s names on a chart until an interview with the FBI in April of last year.

When forced to speak out about some of his deceptions, Leissner he sounded almost embarrassed even when he testified about using some of the looted money to buy a $10 million house for one of his girlfriends so she wouldn’t go to the authorities.

Leissner said that he was not proud of his falsehoods and that he had lied to the FBI after his arrest because he was scared. Finally, however, he had “confessed,” he said.

As part of his plea deal, Leissner agreed to forfeit $44 million and shares in a company worth hundreds of millions more. He has avoided jail time as a result of his cooperation (Ng spent six months in a Malaysian jail before being extradited to the United States in 2019).

Leissner’s cooperation helped prosecutors take advantage of a guilty plea from Goldman Sachs, a typical prosecution strategy of striking a deal with a white-collar defendant to reel in a proverbial bigger fish. But it is unusual for Leissner to testify against someone she once supervised.

“In a case like this, you hope to avoid a situation where an associate is testifying against someone who is a subordinate,” Roiphe said.

Some attorneys speculated that federal prosecutors never expected to put Leissner on the stand. Instead, they may have been relying on a guilty plea from Ng before a trial, keeping much of Leissner’s dirty laundry secret.

Ng’s trial is scheduled to last at least two more weeks, and it is difficult to know how Leissner’s testimony will influence the jury’s deliberations. The government is calling other witnesses to testify about how both men violated Goldman’s rules in pursuing the lucrative bond underwriting business and to review the bank records of Mr. Ng and his wife.

Even if the jury trusts Mr. Leissner’s testimony, the litigation may not be over.

The trial had to stop for several days to give Ng’s lawyers time to review tens of thousands of emails and other private documents belonging to Leissner that the prosecution did not turn over until after the trial began. Prosecutors called the delay “inexcusable.”

Agnifilo has said that the government’s failure to submit the documents on time hampered his ability to prepare for trial. Legal experts have said the matter could give Ng grounds to appeal if he is convicted.

“It’s an inexcusable and messy job,” Roiphe said. “There is an obligation to get this right, especially when you have a big, high-profile case.”