Former Malaysian Prime Minister Charged In Corruption Scandal

Jul 3, 2018
Originally published on July 4, 2018 6:49 am

Updated, 4:20 a.m. ET Wednesday:

Former Malaysia Prime Minister Najib Razak on Wednesday pleaded not guilty to charges levied against him in court in connection with the 1MDB scandal, which involved the misuse of billions in government funds.

Najib was charged with three counts of criminal breach of trust and one count of corruption. His case was immediately moved to High Court, where Najib pleaded not guilty to all the charges, according to The Associated Press. The case will now proceed to trial.

Najib was released on 1 million Malaysian rinnget, or $250 million. The Straits Times reports Najib also had to hand over his two passports.

Each criminal breach of trust comes with up to 20 years in prison, according to The Associated Press. Because he is more than 60 years old, Najib will be exempt from the whipping penalty that also comes with those charges.

The Straits Times reports that the corruption charge carries a maximum sentence of 20 years in prison and a fine of not less than five times the value of the bribe.

Najib set up the 1Malaysia Development Bhd government investment fund in 2009, and as NPR's Elise Hu has reported, it rapidly amassed billions of dollars in debt.

The Wall Street Journal, which brought the scandal to international attention, published a report in 2015 that investigators looking into 1MDB had "traced nearly $700 million of deposits into what they believe are the personal bank accounts" of Najib.

Najib tried to quash the Malaysian probe when the scandal came to light, according to the Journal. But as the newspaper notes, "a surprising election defeat in May stripped Mr. Najib of his ability to block investigations in Malaysia into what international prosecutors allege is one of the largest financial frauds of all time."

The U.S. Justice Department has also been investigating 1MDB, the Journal states, and "alleges in civil lawsuits that $4.5 billion was taken from the fund and used to buy mansions, a yacht and to fund a Hollywood production company, among other uses."

U.S. investigators allege that Najib's stepson's company, "Red Granite Pictures Inc., used money stolen from 1MDB to finance Hollywood films including the Martin Scorsese-directed 'The Wolf of Wall Street,' " according to the AP. That company has paid a settlement, the news service adds.

Even though Najib has denied wrongdoing, the scandal played a role in unseating him as prime minister in May's shock election that also saw the ousting of Malaysia's ruling party of more than 61 years.

Mahathir Mohamad, Najib's 92-year-old successor who came out of retirement to run for election, told Reuters last month that there was "an almost perfect case" against the former prime minister.

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