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FBI Opens Investigation Into Malaysian PM's Goldman-Financed Slush Fund

Tyler Durden's picture




 

On Friday, Malaysian authorities arrested Khairuddin Abu Hassan. According to WSJ, the charges were “attempting to undermine democracy.” 

What Khairuddin - a former member of Malaysia’s ruling party - was actually “attempting” to do, was travel to New York and urge US authorities to investigate 1MDB, the infamous Goldman-backed development bank turned slush fund that’s become the subject of intense scrutiny after allegations that some $700 million was diverted to Prime Minister Najib Razak’s personal account surfaced earlier this year. Those allegations, along with the perception that Najib’s government has sought to stimy attempts to investigate the bank, have led to calls for the premier’s ouster and were the catalyst for street protests that swept through Kuala Lumpur last month. 

For those who need a refresher on the backstory, here’s how we explained it last month

1MDB was set up by Najib six years ago and has been the subject of intense scrutiny for borrowing $11 billion to fund questionable acquisitions. $6.5 billion of that debt came from three bond deals underwritten by Goldman, whose Southeast Asia chairman Tim Leissner is married to hip hop mogul Russell Simmons’ ex-wife Kimora Lee who, in turn, is good friends with Najib’s controversial wife Rosmah Manso.



You really cannot make this stuff up.

 

What Goldman did, apparently, is arrange for three private placements, one for $3 billion and two for $1.75 billion each back in 2013 and 2012, respectively. Goldman bought the bonds for its own book at 90 cents on the dollar with plans to sell them later at a profit (more here from FT). Somewhere in all of this, $700 million allegedly landed in Najib’s bank account and the going theory is that 1MDB is simply a slush fund. 

The plot only thickens from there, and as we detailed in "Abu Dhabi Can't Find $1.4 Billion It Supposedly Received From Malaysia PM's Slush Fund," when UAE went looking for a $1.4 billion payment Abu Dhabi's International Petroleum Investment Co. supposedly received in exchange for guaranteeing some $3.5 billion in 1MDB bonds, the money was nowhere to be found, casting considerable doubt on IPIC's manager who was fired earlier this year. Incidentally, IPIC was also involved in a rather nefarious looking deal in which one of its subsidiaries guaranteed $2.3 billion in 1MDB mystery money that may or may not be parked in the Cayman Islands in order to secure a sign-off from Deloitte after KPMG was dismissed as 1MDB's auditor for asking too many questions. 

Since then, another $993 million has turned up missing at IPIC and it's certainly starting to look like the rabbit hole goes pretty deep on this one. Ultimately, the future of Najib's political career will likely depend on how it all shakes out. 

Unfortunately for the Prime Minister, it looks as though arresting Khairuddin Abu Hassan on his way to New York was too little too late because now, WSJ is reporting that the FBI has opened an investigation into the development fund. Here's more:

The FBI has opened an investigation into allegations of money-laundering related to a Malaysian state investment fund, a person familiar with the matter said.

 

The scope of the investigation wasn’t known. It is the latest in a series of international investigations related to the fund that have been revealed in the past several weeks.

 

The international investigations center on entities related to 1Malaysia Development Bhd., which was set up by Prime Minister Najib Razak in 2009 to help drive the economy. The fund is having difficulty repaying more than $11 billion of debt and is at the center of investigations that are destabilizing the government.

 

Late Friday, a former member of Malaysia’s ruling party who had raised questions about money transfers to the Malaysian prime minister was arrested on charges of attempting to undermine democracy, his lawyer Matthias Chang said.

 


 

The arrest of Khairuddin Abu Hassan, who remained in custody on Saturday, prevented him from traveling to New York where he planned to urge U.S. authorities to investigate the transfers, Mr. Chang said.

 

A spokeswoman for the FBI’s New York office said that no agent in the office had arranged to speak with Mr. Khairuddin or had any previous contact with him.

 

Two of the transfers were made through the Singapore branch of a Swiss private bank and routed via Wells Fargo & Co. Wells Fargo declined to comment.

We'll close with our assessment from earlier this month as it's still the best way to sum up the situation as it stands today: The more information the public gets about corruption at 1MDB, the louder will be the calls for Najib's head (figuratively speaking we hope), and the larger will be the street protests. Throw in the fact that the loudest calls for Najib's exit come from former Prime Minister Mahathir Mohamad and it seems like a very good bet that the political (not to mention social) upheaval in Malaysia is just getting started and that is precisely what the country does not need as it desperately tries to hang on to its stash of hard fought FX reserves in the face of a plunging currency and looming financial crisis.  

 

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Sun, 09/20/2015 - 16:24 | 6572160 Soul Glow
Soul Glow's picture

Nothing will come of the investigation.  Goldman Sachs launders money for all foreign leaders.  The banks run the governments.

Sun, 09/20/2015 - 16:48 | 6572220 Jumbotron
Jumbotron's picture

The FBI just needs their cut.

Just the threat of an investigation will cause monies to flow to it.  And the Treasury.  Then, if there is hanky panky, then Goldman coughs a few bucks extra in the form of a fine, claim no fault and the Great Grift goes on.

Move along, nothing to see and nothing can be done about it.

Sun, 09/20/2015 - 17:13 | 6572291 Scooby Dooby Doo
Scooby Dooby Doo's picture

Funny how often those 3 words are joined together: FBI, investigation, Goldman.

Where there is smoke....

Sun, 09/20/2015 - 18:00 | 6572413 LetThemEatRand
LetThemEatRand's picture

This just in from the 2017 future news wire:  "Justice Department says that 'next time' it will go after those who engaged in financial fraud."

Mon, 09/21/2015 - 10:43 | 6574379 Tarshatha
Tarshatha's picture

"The Malaysian High court ruled Israel was guilty of war crimes. Within a year two Malaysian planes are taken out"

http://www.conspiracyclub.co/2015/03/09/the-malaysian-airline-conspiracy/

and now this.

 

Sun, 09/20/2015 - 17:22 | 6572318 Main_Sequence
Main_Sequence's picture

Agreed -- it's a shakedown.

Sun, 09/20/2015 - 16:48 | 6572222 wee-weed up
wee-weed up's picture

Obozo has the Mother of all slush funds.

Sun, 09/20/2015 - 16:50 | 6572227 silverer
silverer's picture

I don't know why they don't just dissolve the Justice Department and the FBI.  They only prosecute and convict small time criminals.  That can be done by the local police.  All the big guys sleeze out of all those fancy multi-million dollar investigations.

Sun, 09/20/2015 - 16:55 | 6572243 negative rates
negative rates's picture

And who runs the banks? Mr. Bank runs??

Sun, 09/20/2015 - 17:23 | 6572325 AMPALANCE
AMPALANCE's picture

Cave dwelling teroristic Muslims, or possibly Jesuit, we're not sure.

Sun, 09/20/2015 - 16:56 | 6572245 Usurious
Usurious's picture

...........the bank IS the gov............

ask not what your Oligarchs can do for you, ask what you can do for your Oligarchs......

Sun, 09/20/2015 - 17:01 | 6572263 CheapBastard
CheapBastard's picture

#bringbackfast&furiousholder

Sun, 09/20/2015 - 20:38 | 6572873 junction
junction's picture

Maybe the FBI should open an investigation into how Obama's military coomanders tolerate child rape by our so-called Aghan allies.  http://www.nytimes.com/2015/09/21/world/asia/us-soldiers-told-to-ignore-...

I expect Obama's new Secretary of the Army to make an on-site inspection (or maybe the word should be "troll') in Afghanistan of the problem.  Obama's degenerate minions have prosecuted American soldiers who took action against Afghan commanders kidnapping and raping children.  No surprise there.  Pedophiles stick together.

Sun, 09/20/2015 - 16:24 | 6572161 PoasterToaster
PoasterToaster's picture

Who do they want to install in his place?  It sucks to have a "friend" like the US Elitists.

Sun, 09/20/2015 - 16:38 | 6572194 HowdyDoody
HowdyDoody's picture

They want someone more corrupt and amenable to Zionist wishes (the two usually go hand in hand for some reason).

Malayasia held a trial denouncing Israel for war crimes over its rampages in Gaza. The PM also did not go along with the US over MH-17. He made the big mistake of demanding an independent investigation and objected to the Plan B tribunal scam.

Sun, 09/20/2015 - 16:27 | 6572168 Panic Mode
Panic Mode's picture

It's just a public stunt to show the people in power are clean as a white shit.

Sun, 09/20/2015 - 16:27 | 6572170 J Jason Djfmam
J Jason Djfmam's picture

Due to the fact that investigation of this matter may harm national security,

it will be swept under the rug. Signed, The FBI.

Sun, 09/20/2015 - 16:31 | 6572174 DirkDiggler11
DirkDiggler11's picture

The FBI later announced the addition of special agent Jon Corzine to the cases.

UPDATE: per special agent Jon Corzone, the investigation is now closed due to insufficient evidence to indict anyone for anything.

Sun, 09/20/2015 - 16:35 | 6572186 Lumberjack
Lumberjack's picture

That is goddamn funny! +1000

Sun, 09/20/2015 - 17:09 | 6572289 CheapBastard
CheapBastard's picture

You better assign him some assistance like special agent Angello "Orange Face" Mozillo.

Sun, 09/20/2015 - 18:59 | 6572576 Karaio
Karaio's picture

FBI = indoors.

CIA = away from home.

I would like someone to explain to me what these sons of bitches FBI are doing in other countries as it is in the Law of them within the limits of the US territory.

I have worked with DEA agents, narcotics in Brazil, so far so good.

I have worked with INTERPOL agents.

Do not come tell me shit.

Chain of command is a hard thing and should be respected.

Ah, now I'm retired this area ..

:-)

Sun, 09/20/2015 - 16:32 | 6572176 Sanity Bear
Sanity Bear's picture

fine them another dollar!!

Sun, 09/20/2015 - 16:38 | 6572195 Lumberjack
Lumberjack's picture

+1000 for you too!

Sun, 09/20/2015 - 16:34 | 6572181 Lumberjack
Lumberjack's picture

Howz about the Clinton slush fund?

Sun, 09/20/2015 - 17:13 | 6572297 chunga
chunga's picture

What ever happened to Lois Lerner?

Sun, 09/20/2015 - 17:35 | 6572351 Lumberjack
Lumberjack's picture

She is having a spin the bottle session with Blythe Masters and V. Nuland. Caitlin joined in but they discovered 'her' junk and it didn't include batteries.

Sun, 09/20/2015 - 17:51 | 6572392 chunga
chunga's picture

LOl thats my cue to start on the beer. I'm going down the drunk hole beginning right now

Sun, 09/20/2015 - 19:22 | 6572637 Lumberjack
Lumberjack's picture

Agreed!

Sun, 09/20/2015 - 16:35 | 6572184 pachanguero
pachanguero's picture

Dog and pony.......then fade away

Sun, 09/20/2015 - 16:39 | 6572196 logicalman
logicalman's picture

I don't think those fine upstanding chaps at GS would have anything to do with such a scheme.

Sun, 09/20/2015 - 16:44 | 6572211 scaleindependent
scaleindependent's picture

The squid thrusting its tentacles into the airways of humanity. USA, Greece, Malaysia, Thailand, Latin America.

Sun, 09/20/2015 - 17:04 | 6572267 lincolnsteffens
lincolnsteffens's picture

You left out Australia and New Zealand, Bank of England. Go ahead, make my day and start a list of "former" GS execs. in high office or central banks.

Sun, 09/20/2015 - 18:05 | 6572421 logicalman
logicalman's picture

It's a long list, for sure.

 

Sun, 09/20/2015 - 16:46 | 6572215 Joebloinvestor
Joebloinvestor's picture

HAHAHAHA

WHAT A FUCKING FARCE.

Hey FBI, you want something really corrupt to investigate, look at the Clinton foundation.

Sun, 09/20/2015 - 16:53 | 6572233 coast
coast's picture

Hey Joe, what ya doin with that gun in your hand (jimi hendrix)...but I hear ya, the clinton foundation, but how about 911, and chemtrails, and the pharma industry etc...The fbi and cia only do things to make job security....

Sun, 09/20/2015 - 17:07 | 6572283 logicalman
logicalman's picture

Here's somewhere the FBI could start looking for home-grown corruption....

http://arkancide.com/

Sun, 09/20/2015 - 17:43 | 6572368 Lumberjack
Lumberjack's picture

Try UPC Renewables too.

Sun, 09/20/2015 - 19:14 | 6572611 Lumberjack
Lumberjack's picture

First link was scrubbed by google. The other not.

Energy Update: Indonesia graft court jails third Chevron employee ...
https://www.usasean.org › 2013/07/19
Jul 19, 2013 - +Ranhill Energy Said to Raise $236 Million in Malaysia Share Sale .... owned unit of UPC Renewables Partners (UPC) and the Philippine Investment Alliance for Infrastructure (PINAI) ...

See Upc Africa and I am looking into things...

Sun, 09/20/2015 - 17:29 | 6572288 coast
coast's picture

I guess the FBI found out that we all see thru them setting up patsies for terrorist attacks, so they have to make some type of job security going after the bankers....the bankers will make 100 billion and pay a 1 billion dollar fine, Are you hearing me FBI??  We all know you now, we know that you lie cheat murder  and steal...and one day this will come back on you ya stupid fucks. We saw thru you setting up patsies and we see thru you with this shit...you are evil and there will be no hiding place...fuck you...you dont scare me ya fucks...my high blood pressure will kill me before you even find out where I live..you are inept, stupid, sheeple, brainwashed, and if I wanted to I could out run you and out shoot you and beat your ass...oh, but you will get all your buddies.....nothing different than mexican gangs...they all cry until they have their gang around them....to the FBI: you are pussies.

For Gods sake and the basis of true humanity, please just do not have children. In fact, I urge you to go visit planned parenthood...

Sun, 09/20/2015 - 23:29 | 6573411 OldPhart
OldPhart's picture

From personal experience, it takes about three to four months for the FBI to trace a post on a site like facebook or zero hedge, find an assoicated email account, examine correspondence therein, and track your network ID to your doorstep. 

My visit was on a Friday, January 2015.  During his 'casual' interview, he showed us the posting and the routing work they had done.  He also said he had eight other people to investigate, that day, in this desert town of less than 100k.

Eight people a day, in one town, seems to indicate that there are a lot more vocal, pissed off, people than we, and our war criminal government, expect.

Sun, 09/20/2015 - 16:49 | 6572225 Publicus_Reanimated
Publicus_Reanimated's picture

"stymie" -- keep making those typos, that's how we know it's you.  Never trust a web site with perfect spelling, it's probably the NSA.

Sun, 09/20/2015 - 16:49 | 6572226 chunga
chunga's picture

Good to see the FBI is all caught up on financial fraud in the states and now they can set their sights on Malaysia.

Sun, 09/20/2015 - 17:49 | 6572372 Lumberjack
Lumberjack's picture

They cash in on the deals. Look at whitey Bulger. Same with the Intel services. They do better then congress does with insider trading and HFT's. Of course one could speculate they are involved. Somehow I can appreciate the USMC.

Sun, 09/20/2015 - 16:55 | 6572241 Brokenarrow
Brokenarrow's picture

armed with a bilk in cash this idiot goes after russel simmons day old bread? wipe all that makeup off, hair extensions, high heels, and fake everything and WALA! You got Jimmy Hoffa. what is wrong with this guy?

Sun, 09/20/2015 - 16:57 | 6572249 bid the soldier...
bid the soldiers shoot's picture

Ya think this will affect Malaysia's acceptance of the Dutch report on MH17 due out October 13? 

Jest wondering.

Sun, 09/20/2015 - 18:06 | 6572425 logicalman
logicalman's picture

That report will come out as soon as it can be used for political ends, and not before!

 

Sun, 09/20/2015 - 22:55 | 6573326 bid the soldier...
bid the soldiers shoot's picture

Except the Dutch are very impatient to see the report and Rutte knows it.

Sun, 09/20/2015 - 17:12 | 6572295 Cindy6
Cindy6's picture

time for a coup a la brazil. that's what happens when you don't take the hint even after loosing 2 planes and even dare to patrol the south china seas together with teh chinese navy!

3, 2, 1 to a manufactured currency crisis in malaysia and unexpected consequences, like brorowing from the brics bank, and pegging teh riggit to rmb...

Sun, 09/20/2015 - 18:07 | 6572427 logicalman
logicalman's picture

Do you wear mittens when you type or is it the beer?

Sun, 09/20/2015 - 19:36 | 6572681 Lumberjack
Lumberjack's picture

Let me take a crack at this... Suffolk is going global.

 

http://www.bostonmagazine.com/news/article/2015/05/21/john-fish-olympics/

 

https://www.bostonglobe.com/business/2015/07/30/john-fish-expected-bounc...

 

He is slated the be the next chair of the Boston FRB. Google Suffolk Construction lawsuits.

Sun, 09/20/2015 - 21:17 | 6573016 blue51
blue51's picture

Well, at least 3 men have died on Suffolk Construction sites this year. Got that going for his resume.

Sun, 09/20/2015 - 17:17 | 6572306 q99x2
q99x2's picture

Malaysia needs to issue the arrest warrants of treason for Lloyd Blankfein and hang him and shut down Goldman Sachs. WWIII the war of banksters and banking families against the populations of the world. Long live the revolution.

Sun, 09/20/2015 - 17:24 | 6572330 Lucky Leprachaun
Lucky Leprachaun's picture

Malaysia must have done something to  piss off America's ruling oligopoly to spur this uncharacteristic FBI interest in financial corruption.

Sun, 09/20/2015 - 17:45 | 6572374 q99x2
q99x2's picture

The FBI runs cover for Goldman Sachs. The money printers have taken over the military and all agencies of the Federal Govt.

Sun, 09/20/2015 - 18:10 | 6572434 logicalman
logicalman's picture

And you stlll plan to vote?

You ARE smarter than that.

 

Sun, 09/20/2015 - 18:11 | 6572439 Dragon HAwk
Dragon HAwk's picture

First rule of Slush Funds... Keep them Small and under the radar.

Sun, 09/20/2015 - 18:17 | 6572450 williambanzai7
williambanzai7's picture

They suck when it comes to investigating lower Manhattan thievery but when it comes to chasing Elliot Spitzers filanderings soccer corruption and Malaysian PMs it is a different story entirely...so we are told.

They certainly have plenty to do between blowing up office towers...

Sun, 09/20/2015 - 19:20 | 6572629 logicalman
logicalman's picture

Got to have something to distract from the real problems.

Sun, 09/20/2015 - 18:24 | 6572474 GoatHollow
GoatHollow's picture

Wait..... Since when is malaysia in the FBI's jurisdictions????

Sun, 09/20/2015 - 18:24 | 6572475 GoatHollow
GoatHollow's picture

Wait..... Since when is malaysia in the FBI's jurisdictions????

Sun, 09/20/2015 - 18:35 | 6572513 mc225
mc225's picture

yeah when did the fbi become international cops?

Sun, 09/20/2015 - 18:37 | 6572519 matagorda
matagorda's picture

Plus the justice dept. just announced it's going to be getting very tough on white collar crime.  If I were goldman, I would be afraid... very afraid!

Sun, 09/20/2015 - 18:44 | 6572527 Joebloinvestor
Joebloinvestor's picture

Investigation will come to a screeching halt when 1MBD found to be contributor to Clinton foundation.

The new "Avoid Prosecution" card to be played by international criminals.

Sun, 09/20/2015 - 18:57 | 6572575 milking institute
milking institute's picture

Nice nipples though.....

Sun, 09/20/2015 - 20:42 | 6572882 free
free's picture

I'll believe it when I see it - it's all kabuki theatre.

 

 

Sun, 09/20/2015 - 21:29 | 6573050 spanish inquisition
spanish inquisition's picture

Goldman responded to accusations by hiring lead investigators, increasing campaign donations and throwing a victory party with Maylasian hookers.

Mon, 09/21/2015 - 00:39 | 6573534 bluskyes
bluskyes's picture

Nothing to see here

Mon, 09/21/2015 - 04:19 | 6573716 MSorciere
MSorciere's picture

 

The FBI has come to the party a bit late...

 

Switzerland, Hong Kong and Singapore have already frozen accounts and are engaged in a criminal probe of this l-o-n-g and twisted money trail.

 

Since Wells Fargo made transfers, a US agency has to be seen doing something.

 

Sticking their noses in others' dirty business is their specialty.

Fiddling while Rome burns.

Tue, 09/22/2015 - 02:34 | 6577805 onmail1
onmail1's picture

Another Oil producing country gonna become Libya

Satan America wants a change of head of state

to a Puppet

------

US funded NGO led crowds will create chaos 

bullets will be fired (planned by USA)

blame will be put on ruling government

The PM et al will be investigated and condemned , may be extradited to American jail or to ICC jail in europe

if they do not become puppets.

------

Caballah at its best

Why Malaysian paggenger planes were shot down (by USA)

This is the reason : USA wants Malasian Oil

-----

How it was planned :

Cabals aka Goldman$achs paid bribe to top officials in Malaysia

(but the cabals do not give away their moolah for nothin)

They themselves leaked out the information

The US funded NGO led crowds thronged the streets

pow pow raise the noise

Now US starts investigation (verdict will be as per african style)

Becuz US dollar was used in black money laundering (What a sham excuze)

----

Overall result : Change of govt to a puppet

 

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