The DOJ has secured its second guilty plea in its investigation of what it alleges was a $4.5 billion fraud at 1MDB, the Malaysian sovereign wealth fund that was allegedly ransacked by corrupt officials with the help of a Malaysian financier, who allegedly paid bribes and kickbacks to Malaysian officials - including former Prime Minister Najib Razak - so they would keep quiet.
On Friday, George Higginbotham, a lawyer who left the DOJ just three months ago, pleaded guilty to one felony count of "conspiracy to make false statements" over allegations - detailed earlier this month in an ABC News report - that he sent emails lying to an unidentified US bank vouching for the source of funds funneled into the US by Jho Low, the corrupt Malaysian financier whom the DOJ has accused of masterminding the 1MDB fraud (and who met with former Goldman CEO Lloyd Blankfein and other senior Goldman bankers, despite objections from the bank's compliance department). Low is presently a fugitive whose whereabouts are unknown, having fled before the DOJ charged him for his role in the fraud earlier this month.
He was already wanted in Malaysia for crimes related to 1MDB. Higginbotham allegedly opened accounts on Low's behalf inside the US, into which he deposited tens of millions of stolen 1MDB funds.
According to Bloomberg, some of the money funneled into the US by Low was intended to sway a DOJ investigation into 1MDB, though BBG didn't specify how he intended to accomplish this, or which investigation he intended to sway.
Higginbotham allegedly plotted with two co-conspirators to "knowingly" mislead a specific financial institution about "tens of millions of dollars" in funds, according to a criminal complaint. According to BBG, Higginbotham held a "non-lawyer position" at the DOJ.
According to court documents, Low funneled cash through former Fugees member Pras Michel, who then passed money on to a political fundraiser who was identified only as Individual 2, as well as one of the fundraisers' associates, an investment firm owner identified only as Individual 1.
Prosecutors have alleged that Higginbotham lied in the email "for the purpose of influencing [the bank's] due diligence in connection with applications for recently opened accounts."
More details are spelled out in a civil suit filed on Friday which is seeking to seize $74 million from Higginbotham’s law firm, and two other entities.
Higginbotham is the second person to plead guilty in the case after Goldman Partner Tim Leissner, who pleaded guilty earlier this month and agreed to cooperate with federal investigators. In his plea agreement, Leissner alleged a "culture of corruption" at Goldman that helped him circumvent the bank's compliance department. Other Goldman employees - and possibly the bank itself - have found themselves in the crosshairs of the DOJ, including another banker, Roger Ng, who has been arrested and is being extradited to the US to face money laundering charges. A former co-head of Goldman's investment bank is also being investigated, and has been temporarily put on leave. Earlier on Friday, Bloomberg reported that the New York Fed has launched its own investigation into how Goldman managed to evade its own compliance controls and move ahead with underwriting the three 1MDB bond deals - which netted the bank a combined $600 million.