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Malaysia's former prime minister is found guilty of fraud scandal in the first trial


Malaysia's former prime minister Najib Razak was found guilty in the first of two lawsuits related to the billion-dollar 1MDB scandal, two years after the fraud contributed to the overthrow of his long-ruling government.

Najib could now be in prison for decades after being convicted of all charges related to the looting of the 1Malaysia Development Berhad sovereign wealth fund.

Billions of dollars were stolen from the investment vehicle and spent on everything from high-end real estate to art by Van Gogh, while investment bank Goldman Sachs was also involved in the scandal.

Anger over the looting played a big part in the shock loss of Najib's long-standing ruling coalition in the 2018 elections, and was arrested after his defeat and beaten with dozens of charges.

Malaysia's former Prime Minister Najib Razak (center) arrives at the Kuala Lumpur Supreme Court complex in the Malaysian capital today, where he was found guilty of defrauding all seven charges

Najib Razak and his wife Rosmah Mansor are waving in front of the Prime Minister's office in Kuala Lumpur in 2009. Rosmah is also being prosecuted for the scandal

Najib Razak and his wife Rosmah Mansor are waving in front of the Prime Minister's office in Kuala Lumpur in 2009. Rosmah is also being prosecuted for the scandal

Police loaded confiscated items into a truck in Kuala Lumpur in 2018 when the investigation into Najib Razak resumed after he lost power in a general election

Police loaded confiscated items into a truck in Kuala Lumpur in 2018 when the investigation into Najib Razak resumed after he lost power in a general election

Timeline of the 1MDB scandal in Malaysia

April 2009: Najib is sworn in as Malaysia's sixth prime minister. 1MDB is founded in July with Najib as Chairman of the Advisory Board.

July 2015: A Wall Street Journal report claims that nearly $ 700 million in 1MDB money has been transferred to Najib's personal bank accounts. Najib denies the allegations. A whistleblowing website is blocked and two newspapers are suspended for reporting on the scandal.

January 2016: Attorney General Apandi Ali frees Najib from any wrongdoing and says the money in his bank accounts is a donation from the Saudi Arabian royal family.

July 2016: The U.S. Department of Justice Takes Steps to Recover More Than $ 1 Billion Stolen from 1MDB According to Investigators by Najib Employees and Used to Buy Assets.

May 2018: Najib's National Front coalition that has ruled Malaysia since independence in 1957 loses in general election.

May-June 2018: Najib and his wife Rosmah Mansor are not allowed to leave Malaysia, and the new government reopens the 1MDB probe. The police confiscate cash and thousands of luxury items, from jewelry to handbags, to Najib-related premises worth up to £ 200m.

July 2018: Najib is charged with three criminal breach of trust charges and one abuse of power charge.

August-September 2018: Najib is not guilty of three other cases of money laundering and asks for legal proceedings. Many more fees follow, including tax evasion and manipulation of an official report in 1MDB.

October 2018: Najib's wife Rosmah is not committed to money laundering and tax evasion.

December 2018: Malaysia files criminal complaint against Goldman Sachs and two former executives for bond sales organized for 1MDB.

April 2019: Najib's first attempt at transplantation begins.

July 2019: Riza Aziz, Najib's stepson and producer of the movie "The Wolf of Wall Street", pleads not guilty of 1MDB money laundering. Fees will be dropped later.

February 2020: The transplant process against Najib's wife begins.

March 2020: A new government, including Najib's party, is sworn in after the previous alliance has broken up.

July 2020: Najib is found guilty in his first corruption trial days after a court ordered him to pay 1.69 billion ringgit (£ 310 million) in unpaid taxes. Regardless, the government has reached an agreement of $ 3.9 billion with Goldman Sachs to drop all charges and claims against the US investment bank.

In the first trial, Najib was charged seven times with criminal breach of trust, money laundering and abuse of power for allegedly illegally receiving nearly $ 10 million from the former 1MDB unit, SRC International. He hadn't pleaded guilty.

Abuses of power and criminal breach of trust are each punished with up to 20 years in prison, while money laundering fees are punished with up to 15 years each.

The amounts in Najib's first case are small compared to those in his second and most significant trial dealing with allegations that he illegally received over $ 500 million. This process started in August last year.

His wife Rosmah Mansor is also charged with money laundering and tax evasion, for which she is not guilty.

About 16 months after the trial began, the Kuala Lumpur Supreme Court announced the verdict in Najib's first trial, which involved transferring money from a former 1MDB unit, SRC International, to his accounts.

Najib had vehemently denied the wrongdoing.

But Judge Mohamad Nazlan Mohamad Ghazali took apart all the arguments put forward by his defense and found him guilty of the seven charges he faced.

"After reviewing all the evidence in the process, I find that the prosecutor has successfully proven the case," the judge told the court.

The U.S. Department of Justice launched its own investigation after alleging that stolen Malaysian public funds had been laundered through the U.S. financial system, and has filed lawsuits requesting assets of $ 1.8 billion that are believed to be bought with cash.

The department said more than $ 4.5 billion was stolen from 1MDB by senior officials of the fund and their employees between 2009 and 2015.

Najib's stepson Riza Aziz, an aspiring film producer, used tens of millions of dollars in 2012 to fund the Hollywood film The Wolf of Wall Street with Leonardo DiCaprio.

Hundreds of millions have also been used to purchase high-end properties in Beverly Hills, New York and London.

A Monet painting bought for $ 35 million, a Van Gogh painting for $ 5.5 million, a Bombardier jet for $ 35 million, a $ 100 million stake in EMI Music Publishing, and a yacht for $ 250 million Dollars were also removed from the shopping list.

Malaysia's attorney general initially freed Najib from wrongdoing after the scandal broke out in 2015 and triggered protests in Kuala Lumpur.

However, a new government re-opened the investigation after Najib's defeat in the 2018 shock elections, and items were loaded into a truck after police raided the former prime minister's home in Kuala Lumpur.

Dozens of charges were announced in 2018 and 2019. The first verdict was announced today.

The sentence was not immediately imposed. The 67-year-old is likely to appeal and may not be put in prison immediately.

If his conviction is confirmed, he will be excluded from the political office for several years.

Dozens of Najib supporters who spent hours outside the courthouse demanded the former prime minister's release and were seen offering prayers.

Malaysia's former Prime Minister Najib Razak (pictured at a press conference announcing the results of the MH370 investigation in 2015) was found guilty today in the first of two court cases over the billion-dollar 1MDB scandal

Malaysia's former Prime Minister Najib Razak (pictured at a press conference announcing the results of the MH370 investigation in 2015) was found guilty today in the first of two court cases over the billion-dollar 1MDB scandal

Supporters of former Malaysian Prime Minister Najib Razak are waiting outside the Kuala Lumpur Supreme Court complex today. The 67-year-old politician had claimed his innocence

Supporters of former Malaysian Prime Minister Najib Razak are waiting outside the Kuala Lumpur Supreme Court complex today. The 67-year-old politician had claimed his innocence

Tens of millions of dollars were used by Najib's stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film The Wolf of Wall Street with Leonardo DiCaprio (pictured in the film) in 2012.

Tens of millions of dollars were used by Najib's stepson Riza Aziz, an aspiring film producer, to fund the Hollywood film The Wolf of Wall Street with Leonardo DiCaprio (pictured in the film) in 2012.

Najib had insisted that he didn't know the transactions.

The defense team portrayed Najib as a victim and instead attempted to paint the financier Low Taek Jho, a key figure in the scandal accused in the U.S. and Malaysia, as a mastermind.

But Judge Ghazali said the idea that Low Najib had tricked was "far-fetched" and also rejected the argument that the ex-leader believed the money in his account was a donation from Saudi kings.

Low, whose whereabouts are unknown, remains innocent.

Prosecutors insisted that Najib was in control of the SRC International 1MDB unit.

"The sentence sends a strong message that leaders are held accountable for misconduct in office," said opposition legislator Charles Santiago. "He can't steal people's money and expects to go free."

The return of Najib's party to power in a coalition in March followed the collapse of Mahathir Mohamad's reformist government.

There were concerns that this could impact Najib's trials, especially after 1MDB-related charges against Riza were dropped unexpectedly in May.

The prosecution also dropped dozens of charges against Najib ally Musa Aman, the former leader of the Sabah state.

Malaysia had charged Goldman Sachs and some current and former employees with claims that large amounts had been stolen when the bank arranged 1MDB bonds.

But both sides reached an agreement of $ 3.9 billion last week in return for the fee cut.

How Malaysia's 1MDB corruption scandal developed

In Malaysia's extraordinary 1MDB corruption scandal, top officials allegedly looted billions from state coffers and made a worldwide shopping spree – they bought a $ 250 million yacht and a Van Gogh painting and financed a Hollywood blockbuster.

Prime Minister Najib Razak was a key figure in the looting of 1Malaysia Development Berhad (1MDB) and was convicted on Tuesday of his first fraud-related corruption process.

– What was 1MDB? – –

1MDB was a government investment fund that Najib launched in 2009 shortly after he was appointed Prime Minister.

The portfolio included power plants and other energy plants in Malaysia and the Middle East as well as real estate in Kuala Lumpur.

The fund was closely monitored by Najib.

Whistleblowers say that Low Taek Jho, a jet-set Malaysian financier near Najib but without an official position, helped build 1MDB and make important financial decisions.

Concern escalated in 2014 when 1MDB got into a $ 11 billion debt hole and increased public control indicated lack of funds.

The scandal first came to light on the Sarawak Report news portal and grew in importance in 2015 when the Wall Street Journal published documents showing that Najib had received at least $ 681 million in payments to his personal bank accounts.

– rich life –

The U.S. Department of Justice launched its own investigation after alleging that stolen Malaysian public funds had been laundered through the U.S. financial system, and has filed lawsuits requesting assets of $ 1.8 billion that are believed to be bought with cash.

The department said more than $ 4.5 billion was stolen from 1MDB by senior officials of the fund and their employees between 2009 and 2015.

Najib's stepson Riza Aziz, an aspiring film producer, used tens of millions of dollars in 2012 to fund the Hollywood film "The Wolf of Wall Street" with Leonardo DiCaprio.

Hundreds of millions were also used primarily by Riza and Low to buy high-end properties in Beverly Hills, New York and London.

A Monet painting bought for $ 35 million, a Van Gogh painting for $ 5.5 million, a Bombardier jet for $ 35 million, a $ 100 million stake in EMI Music Publishing, and a yacht for $ 250 million Dollars were also removed from the shopping list.

– Political turmoil –

Najib desperately tried to contain the scandal, targeted critics and introduced repressive laws, but the allegations hit the popularity of his long-standing coalition and contributed to a defeat in the shock election in 2018.

A new government headed by experienced politician Mahathir Mohamad, now 95 years old, came into office due to a wave of public anger and launched another investigation.

Najib was hit with dozens of charges, and his first trial of the scandal finally started in April last year.

But in February the reformist alliance collapsed after fierce struggles, and a new coalition, including Najib's scandalized party, seized power.

There were concerns that this could impact Najib's trial, especially after 1MDB-related charges against Riza were dropped unexpectedly in May.

– The process –

However, these fears turned out to be unfounded after a judge found Najib guilty of all seven charges in his first 1MDB trial on Tuesday. He could be in prison for decades now.

The case focused on allegations that a 42 million ringgit ($ 9.9 million) from SRC International, a former unit of the fund, was transferred to the 67-year-old's bank accounts.

His lawyers insisted that he had no knowledge of the transfers and claimed that Low was the real mastermind behind the scam.

But Judge Mohamad Nazlan Mohamad Ghazali said that the idea that Low Najib had tricked was "far-fetched" and also rejected the argument that the ex-leader believed the money in his account was a donation from Saudi kings.

It is not the most significant of the trials he faces. This started in August last year when Najib was accused of illegally receiving 2.28 billion ringgit ($ 535 million) from 1MDB.

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