Malaysia‘s former prime minister Najib Razak was found guilty today in the first of two trials over the multi-billion-dollar 1MDB scandal, two years after the fraud contributed to the downfall of his long-ruling government.
Najib could now face decades in jail after being convicted on all charges in the case related to the looting of sovereign wealth fund 1Malaysia Development Berhad.
Billions of dollars were stolen from the investment vehicle and spent on everything from high-end property to expensive artworks, while investment bank Goldman Sachs also became embroiled in the scandal.
Anger at the looting played a large part in the shock loss of Najib’s long-ruling coalition in elections in 2018, and he was arrested and hit with dozens of charges following his defeat.
Malaysia’s former PM Najib Razak (centre) arrives at the Kuala Lumpur High Court complex in the Malaysian capital today where he was found guilty of all seven charges in a fraud case
The charges were one of abuse of power, three of criminal breach of trust and three of money-laundering.
The counts of abuse of power and criminal breach of trust are punishable by up to 20 years in jail each, while the money-laundering charges are punishable by up to 15 years each.
The amounts involved in Najib’s first case are small compared to those in his second and most significant trial, which centres on allegations he illicitly obtained more than $500 million.
The verdict was a test of Malaysia’s rule of law. It comes about five months after Najib’s scandal-plagued party returned to power as part of a coalition, a development observers had feared could affect the outcome of the case.
About 16 months after it began, the Kuala Lumpur High Court delivered the verdict in Najib’s first trial, which centred on the transfer of 42 million ringgit (£7.7million) from a former 1MDB unit, SRC International, into his accounts.
Najib had vehemently denied wrongdoing.
But Judge Mohamad Nazlan Mohamad Ghazali took apart all the arguments put forward by his defence, and found him guilty on the seven charges he faced.
‘In conclusion, after considering all the evidence in this trial, I find the prosecution has successfully proven the case,’ the judge told the court.
The US Justice Department launched its own probe after claims that stolen Malaysian public money was laundered through the US financial system, and has filed lawsuits seeking some $1.8billion in assets allegedly purchased with the cash.
The department said more than $4.5billion was stolen from 1MDB between 2009 and 2015 by high-level officials at the fund and their associates.
Tens of millions of dollars were used in 2012 by Najib’s stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film The Wolf of Wall Street, starring Leonardo DiCaprio.
Hundreds of millions were also used to purchase high-end real estate in Beverly Hills, New York and London.
A Monet painting bought for $35million, a Van Gogh for $5.5million, a $35million Bombardier jet, a $100million stake in EMI Music Publishing, and a $250million yacht were also ticked off the shopping list.
Sentencing was not handed down straight away. The 67-year-old will likely appeal and he may not be sent to jail immediately. If his conviction is upheld, he will also be barred from political office for several years.
Najib had insisted he was ignorant of the transactions.
The defence team portrayed Najib as a victim and instead sought to paint financier Low Taek Jho, a key figure in the scandal who has been charged in the US and Malaysia, as the mastermind.
Judge Ghazali said the idea that Low had tricked Najib was ‘far-fetched’, and also dismissed the argument the ex-leader believed the money in his account was a donation from Saudi royalty.
Low, whose whereabouts are unknown, maintains his innocence.
Prosecutors insisted Najib was in control of the 1MDB unit, SRC International.
The return of Najib’s party to power as part of a coalition in March followed the collapse of Mahathir Mohamad’s reformist administration.
There were concerns this could impact Najib’s trials – particularly after 1MDB-linked charges against Riza were unexpectedly dropped in May.
Prosecutors also dropped dozens of charges against Najib ally Musa Aman, the former leader of Sabah state.
Malaysia had charged Goldman Sachs and some current and former staff, claiming large amounts were stolen when the bank arranged bond issues for 1MDB.
But the two sides agreed to a $3.9 billion settlement last week in exchange for charges being dropped.
Malaysia’s former prime minister Najib Razak (pictured at a news conference announcing the findings of the MH370 investigation in 2015) was found guilty today in the first of two trials over the multi-billion-dollar 1MDB scandal