Former Malaysian Pm Charged With Stealing $700 Million to Fund Homes, Jewellery and 'the Wolf of Wall Street'

American prosecutors allege $4.5 billion was laundered and at least $730 million went directly into Najib’s pocket.

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04 July 2018, 9:17pm

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Two months after suffering a shock election defeat, former prime minister Najib Razak appeared in court Wednesday implicated in a $700 million corruption scandal, the worst in Malaysia’s history.

Showing little emotion and wearing a dark blue suit and red tie, Najib pleaded not guilty to four charges against him: three counts of criminal breach of trust and one count of abuse of power.

Najib is accused of funneling up to $700 million from 1MDB, a state-run strategic development fund he set up in 2009.

The charges each carry a maximum of 20 years imprisonment.

Najib was arrested Tuesday and detained overnight before appearing in court. He later returned to his home, released on bail of 1m Malaysian ringgit ($250,000) — posted by his two children.

A trial date was tentatively set for February next year. At the request of the defense, the court placed a gag order on the media to ensure no prejudicial statements are made before the trial.

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The disgraced former PM proclaimed his innocence outside court, adding that a trial was “the best chance for me to clear my name after all the slander and accusations.”

Despite the allegations, hundreds of Najib’s supporters gathered outside the court, disrupting a press conference by attorney general Tommy Thomas, who is leading the prosecution. The demonstrators were ushered from the courthouse for causing a disruption, though no arrests were made.

What is the 1MBD corruption scandal?

Set up in 2009, 1MDB or 1Malaysia Development Berhad was a fund designed to turn Kuala Lumpur into a financial hub akin to Singapore while boosting the economy via strategic investments. The company had raised more than $6 billion by 2013.

However, the fund’s ambitions never panned out and in early 2015 it began to attract negative attention for missing payments on some of the $11 billion it owed to banks and bondholders.

The same year, the Wall Street Journal reported a link between the growing scandal and Najib, claiming it had seen a paper trail tracing $700m from the fund to the then-prime minister’s personal bank accounts.

Investigations in Malaysia, while Najib was leader, found him innocent of all charges, but critics said it was impossible to find him guilty while he remained in office.

Overseas authorities continue to investigate the scandal however, with American prosecutors alleging that $4.5 billion was laundered and at least $730 million went directly into Najib’s pockets.

Luxury haul

Najib is accused of using the money to fund an extravagant lifestyle for him and his wife, Rosmah Mansor, including purchasing luxury properties, jewelry, and yachts. The money was also allegedly used to help set up a Hollywood production company that financed “The Wolf of Wall Street.”

Over the last two months, investigators have raided six properties linked to Najib and seized $273 million worth of goods, including 567 handbags containing almost $30 million in cash, 423 watches, 234 pairs of sunglasses, a $1.6 million gold and diamond necklace, 14 tiaras and 272 Hermes bags.

It took authorities five weeks to count the items and calculate their value. “We couldn't do the counting at the premises because the numbers were too huge," Amar Singh, head of the police commercial crime division, told a news conference at the time.

What caused Najib’s downfall?

Despite being found innocent of all corruption allegations, the 1MDB scandal tainted the latter years of Najib’s time in office and in May, following a bitter political battle, he was ousted by his former mentor, 92-year-old Mahathir Mohamad.

Mahathir pledged during his election campaign to re-open investigations into 1MDB and Najib’s role in the scandal. Once elected Mahathir banned his former acolyte from leaving Malaysia.

The ban was put in place after Najib and his wife were prevented from flying to Indonesia by an angry mob a day after he conceded the election.

Cover image: Najib Razak, Malaysia's former prime minister, center, arrives at the Kuala Lumpur Courts Complex in Kuala Lumpur, Malaysia, on Wednesday, July 4, 2018. (Samsul Said/Bloomberg via Getty Images)

This article originally appeared on VICE US.