One Of The Largest Financial Scandals Ever Involves Embezzling $3.5 BILLION

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Robert Donachie Capitol Hill and Health Care Reporter
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One of the largest financial scandals in history involves one financier and the prime minister of Malaysia.

The claim is that between 2009 and 2013, financier Jho Low and his colleagues allegedly helped embezzle at least $3.5 billion dollars to Prime Minister Najib Razak’s state investment fund, 1Malaysia Development Bhd. Low, the Malaysian owner of Jynwel Capital, is believed to be at the center of the financial scandal sending shock waves throughout the finance world.

While Low had no position at 1MBD, he did much of the dirty work for the investment fund. He set up shell companies to divert money overseas, gifted large transfers of money to confuse regulators, and invested funds in art and real estate to cover its tracks, The Wall Street Journal reports.

Low allegedly instructed his employees to use Gmail, not the bank’s e-mail system, for communication regarding the handling of the 1MBD account. Low was so nervous that he had employees hand deliver financial statements in lieu of e-mail, the Journal reports. If an employee questioned the practices of Low’s operation, they were fired on the spot.

The U.S. Department of Justice took action against 1MBD in July to seize more than one billion in assets involved in the money laundering operation, reports CNBC.

The investigation by the Justice Department found that Low and his associates evaded detection by no less than eight banks (including Goldman Sachs), large financial institutions, one central bank, and government regulators, the Journal reports. (RELATED: Goldman Sachs Subpoenaed For Connection To Global Corruption Ring)

1MBD was supposed to invest the funds on state projects, like energy projects and job creation. Instead, the funds were diverted to off shore accounts and later into individual pocketbooks.

Razak has declined any personal involvement or wrongdoing in this case.

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