MAY 26, 2020: A decade after billions of dollars were wired to banks, Switzerland is holding its first trial into whether a local banker failed to stop a US$700 million (RM3.054 billion) transfer into an account controlled by businessman Low Taek Jho, the alleged mastermind behind the 1Malaysia Development Berhad (1MDB) scandal.
The compliance officer, who can only be identified as A., worked with Coutts & Co, where Low or more widely known as Jho Low, had an account. A. was the designated money laundering reporting officer for Coutts, according to the indictment.
The scandal, which led to the fall of former prime minister Datuk Seri Najib Razak was breathtaking for the audacity with which Low built an US$8 billion fund intended to develop the Malaysian economy. Instead, he allegedly pilfered the money to fuel a spending spree on parties, luxury properties priceless art and a film studio that financed the hit film “Wolf of Wall Street.”
According Bloomber News, Low formed a Seychelles-registered company Good Star in May 2009 and opened an account at Coutts’ Singapore branch less than a month later, said the indictment.
By September of that year, Low was asking to cease all communication with Coutts in Singapore and to receive updates only from Coutts’ Swiss unit to a gmail address he had created: firstname.lastname@example.org.
That unusual request prompted internal inquiries, prosecutors said. Low’s request to transfer US$700 million from 1MDB to his Good Star account at Coutts raised further eyebrows, prompting Low to fly to Zurich to reassure officials at the lender.
Despite being an unknown Seychelles-registered company with a limited track record, Good Star was an investment firm that 1MDB was choosing to invest with, Low explained. Besides, Low added, he had close relationships with the king and prime minister of Malaysia. The deposit was eventually approved.
Swiss prosecutors pursued A. at least in part because he approved the transfer. In the indictment, they cite an email in which he wrote “Please unblock the account 11116073 Good Star Ltd. The due diligence is so far good and we have sufficient evidence that the payment is true and valid.”
For this and other compliance lapses, the prosecutors write, “the culpability of the accused A. weighs heavily.”
By 2010, Coutts employees had begun to feel nervous about having Good Star and Low as a client.
Coutts & Co. was sold by Royal Bank of Scotland Group Plc in 2016 to Union Bancaire Privee. It was fined US$6.5 million in 2017 for allowing US$2.4 billion worth of assets related to 1MDB to flow through its accounts at a number of Swiss banks.