The disgraced ex-PM, who was defeated in 2018 and subsequently convicted for money laundering and other offences, had created the 1MDB fund more than a decade ago. The saga of how it was used to finance luxurious living became an international scandal, hitting financial centres and institutions around the world.
Malaysia's top court yesterday ordered former prime minister Najib Razak to begin a 12-year prison sentence. It upheld a guilty conviction on charges related to a multi-billion-dollar graft scandal at state fund 1Malaysia Development Berhad, aka 1MDB, Reuters reported.
The Federal Court ruling was the final chapter in the demise of Najib. Four years ago he governed Malaysia and suppressed local probes of the 1MDB scandal that led to investigations in Singapore, Switzerland, Luxembourg and the US. Several financial institutions, such as Goldman Sachs and Switzerland’s BSI, among others, were embroiled. Goldman Sachs, for example, paid $3.9 billion to settle its case.
One of the biggest money laundering cases in history, about $4.5 billion was siphoned off from the government-created 1MDB fund. The Najib administration formed 1MDB in 2009 and the former premier was accused of taking more than a $1 billion from it.
Reuters said Najib was taken to Kajang Prison, about 40 km away from Kuala Lumpur.
Najib lost power in 2018, and public anger about corruption was a major cause of his downfall.
The 1MDB scandal caused soul-searching over the AML controls of financial institutions worldwide. It also had surreal elements: Money was taken from the fund to finance the Wolf of Wall Street, a Hollywood movie about a fraudster.
Najib, 69, was found guilty by a lower court in July 2020 of criminal breach of trust, abuse of power and money laundering for illegally receiving about $10 million from SRC International, a former unit of 1MDB. Najib, who pleaded not guilty, was sentenced to 12 years' jail and fined 210 million ringgit ($46.84 million).
In April 2020, US authorities announced that they had returned $300 million to Malaysia which prosecutors say was stolen in the 1MDB case. The returned money came from assets forfeited in 2019 by fugitive financier Jho Low, in a Los Angeles federal settlement. The settlement covered assets which included a Manhattan penthouse, a Beverly Hills mansion, a Beverly Hills boutique hotel, a luxury jet, and paintings by Vincent Van Gogh and Claude Monet.