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The Key to a $4 Billion Fraud Case: A Banker Who Says He ‘Lied a Lot’

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The Key to a  Billion Fraud Case: A Banker Who Says He ‘Lied a Lot’

It appeared a facetious query, one meant to impress the star witness: “Do you assume you’re good at mendacity?”

However it’s the essential subject on the heart of what’s prone to be the one trial on U.S. soil in one of many largest worldwide kleptocracy circumstances in historical past, the looting of billions of {dollars} from the individuals of Malaysia.

A former banker at Goldman Sachs, Roger Ng, is accused of participating in a bribery and kickback scheme that enabled the fraud, which plundered greater than $4 billion from a Malaysian sovereign wealth fund and acquired a king’s ransom of knickknack, artwork and actual property from Manhattan to London to Beverly Hills.

Mr. Ng’s former boss at Goldman, Tim Leissner, was for years one in every of Goldman’s strongest deal makers in Asia. Now, he’s the federal government’s key witness — and an admittedly prolific fabricator. On the stand in a Brooklyn federal courtroom, he acknowledged deceptive co-workers, investigators and all three of his wives. However when Mr. Ng’s lawyer prodded him with the query about whether or not he’s a superb liar, Mr. Leissner coolly replied, “I don’t assume so.”

Mr. Leissner’s 10 days of testimony — together with six days of blistering cross-examination — laid out the small print of a world fraud that toppled Malaysia’s prime minister and compelled Goldman Sachs, one of many world’s most prestigious monetary establishments, to go earlier than a U.S. choose and admit, for the primary time in its 153-year-history, that it was responsible of against the law.

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The query for jurors: How a lot of what Mr. Leissner mentioned was true?

Mr. Leissner acknowledged to the court docket that he has “lied rather a lot,” together with by presenting a bogus divorce decree to his now-estranged spouse, the mannequin and designer Kimora Lee Simmons, in order that she would marry him eight years in the past. However he insists he’s telling the reality about Mr. Ng, who prosecutors say helped line the pockets of officers in Abu Dhabi and highly effective Malaysians near then Prime Minister Najib Razak.

The looted cash from the 1Malaysia Growth Berhad, or 1MDB, sovereign wealth fund financed an enormous spending spree: work by van Gogh and Monet, a yacht that was docked in Bali, a personal jet and a transparent acrylic grand piano given to a supermodel. It financed a boutique lodge in Beverly Hills, purchased a share of the EMI music publishing portfolio and helped make “The Wolf of Wall Avenue,” the Martin Scorsese film about Wall Avenue corruption that netted Leonardo DiCaprio a Golden Globe.

The trial might be the scandal’s last act. Goldman Sachs has paid $5 billion in fines and pleaded responsible on behalf of an Asian subsidiary. Mr. Leissner pleaded responsible and is awaiting sentencing. Mr. Najib, the previous prime minister, was convicted in his dwelling nation and sentenced to 12 years in jail.

The one different central character of the plot is unlikely to ever face trial: Jho Low, the brash financier accused of being the scheme’s architect, is a fugitive believed to be dwelling in China, past the attain of U.S. prosecutors.

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Mr. Leissner mentioned Mr. Low was the “determination maker” on all issues involving 1MDB however that Mr. Ng was his main contact at Goldman, which earned roughly $600 million in charges to rearrange the $6.5 billion in bond offers for the fund.

“Roger made him one in every of his shoppers,” Mr. Leissner mentioned.

He testified that Mr. Ng had arrange most of the conferences to plan the scheme, together with one at Mr. Low’s London house throughout which Mr. Low drew packing containers on a chunk of paper with the names of all of the officers that will get bribes and items. For serving to organize the funds, Mr. Leissner mentioned, he raked in additional than $80 million. Prosecutors contend that Mr. Ng’s share was $35 million.

Mr. Ng’s attorneys say that Mr. Leissner has exaggerated and distorted details to please prosecutors and get a lighter sentence. The cash Mr. Ng acquired, they argue, was to repay a professional debt one in every of Mr. Leissner’s wives owed Mr. Ng’s spouse.

“I’m set to point out this jury he’s a liar,” Mr. Ng’s lead lawyer, Marc Agnifilo, advised Decide Margo Okay. Brodie, the chief choose for U.S. District Court docket for the Jap District of New York, throughout a break within the proceedings. He described Mr. Leissner as “misleading” and “crafty.”

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“There aren’t numerous guys like him,” Mr. Agnifilo mentioned.

Mr. Leissner’s credibility has been a difficulty because the investigation started. In a marketing campaign to forged Mr. Leissner as a rogue worker, the financial institution advised regulators and legislation enforcement officers that he was a grasp con man who had fooled everybody on the financial institution.

Rebecca Roiphe, a former prosecutor and a professor at New York Legislation College who makes a speciality of authorized ethics, mentioned it might be difficult to depend on such a witness, however “it isn’t a deadly blow.”

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She mentioned a prosecutor can argue {that a} witness is “a horrible particular person” and “a serial liar” who has had “a come-to-Jesus second.”

“That may work when you could have actually dangerous individuals who have lied rather a lot,” she mentioned.

Mr. Agnifilo obtained Mr. Leissner to elaborate on how he — not Mr. Ng — oversaw the fee of many of the bribe cash. He highlighted Mr. Leissner’s shut relationship with Mr. Low by getting Mr. Leissner to substantiate his attendance at a star-studded thirty first celebration that Mr. Low organized for himself in Las Vegas in 2012. (Mr. Leissner mentioned Mr. Ng had additionally attended, though Mr. Ng was not on the visitor listing.)

Mr. Agnifilo additionally had Mr. Leissner recount the numerous methods he deceived his wives, significantly Ms. Simmons. Mr. Leissner admitted that he had used an electronic mail account within the title of his second spouse, Judy Chan, to speak with Ms. Simmons whereas relationship her, and that he was nonetheless married to Ms. Chan when he and Ms. Simmons have been wed. (Mr. Leissner was additionally legally married to a different girl when he married Ms. Chan.)

And Mr. Agnifilo poked holes in Mr. Leissner’s accounts of particulars of the 1MDB scheme, significantly the pivotal assembly at Mr. Low’s house. He pressed Mr. Leissner on why he advised the F.B.I. after his June 2018 arrest {that a} Morgan Stanley banker had additionally been current.

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Mr. Leissner mentioned he didn’t recall saying that and didn’t know why it could be in an F.B.I. agent’s write-up of the interview. When proven a duplicate of the F.B.I. report, Mr. Leissner responded: “I don’t know who wrote this or how that report was written.”

Mr. Agnifilo additionally grilled Mr. Leissner — who was interviewed by legislation enforcement roughly 50 instances earlier than and after his responsible plea in August 2018 — about how he had trickled out particulars of the assembly. Mr. Leissner had no clarification for why he didn’t point out Mr. Low’s writing down the names of individuals on a chart till an interview with the F.B.I. in April final yr.

When pressured to debate a few of his deceptions, Mr. Leissner sounded nearly sheepish, together with when he testified about utilizing a number of the looted cash to purchase a $10 million home for one in every of his girlfriends so she wouldn’t go to the authorities.

Mr. Leissner mentioned he wasn’t happy with his untruths, and had lied to the F.B.I. after his arrest as a result of he was scared. Lastly, although, he had “come clear,” he mentioned.

As a part of his plea deal, Mr. Leissner agreed to forfeit $44 million and shares in an organization value a whole bunch of hundreds of thousands extra. He has prevented spending any time in jail on account of his cooperation. (Mr. Ng spent six months in a Malaysian jail earlier than he was extradited to the USA in 2019.)

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Mr. Leissner’s cooperation helped prosecutors leverage a responsible plea out of Goldman, a typical prosecution technique of hanging a take care of a white-collar defendant to land a proverbial larger fish. But it surely’s uncommon for Mr. Leissner to be testifying towards somebody he as soon as supervised.

“In a case like this, you hope to keep away from a state of affairs the place you could have a cooperator testifying towards somebody who’s a subordinate,” Ms. Roiphe mentioned.

Some legal professionals speculated that federal prosecutors by no means anticipated they must put Mr. Leissner on the stand. As a substitute, they could have been banking on a responsible plea by Mr. Ng earlier than a trial, holding a lot of Mr. Leissner’s soiled laundry beneath wraps.

Mr. Ng’s trial is scheduled to go on for a minimum of two extra weeks, and it’s onerous to know simply how Mr. Leissner’s testimony will issue within the jury’s deliberations. The federal government is asking different witnesses to testify about how each males violated Goldman guidelines in looking for the profitable bond underwriting enterprise, and to evaluate financial institution information for Mr. Ng and his spouse.

Even when the jury trusts Mr. Leissner’s testimony, the litigation might not be over.

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The trial needed to be paused for a number of days to permit Mr. Ng’s legal professionals time to evaluate tens of 1000’s of emails and different personal paperwork belonging to Mr. Leissner that the prosecution didn’t ship till after the trial started. Prosecutors referred to as the delay “inexcusable.”

Mr. Agnifilo has mentioned the federal government’s failure to provide the paperwork in a well timed trend impeded his potential to organize for the trial. Authorized consultants have mentioned the problem might give Mr. Ng grounds for an attraction if convicted.

“It’s inexcusable and messy work,” Ms. Roiphe mentioned. “There’s an obligation to get this proper, particularly when you could have a giant, high-profile case.”

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Study details 'transformative' results from L.A. pilot that guaranteed families $1,000 a month

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Study details 'transformative' results from L.A. pilot that guaranteed families ,000 a month

Some of L.A.’s poorest families received cash assistance of $1,000 a month as part of a 12-month pilot project launched nearly three years ago. There were no strings attached and they could use the money however they saw fit.

Now, a new study finds that the city-funded program was overwhelmingly beneficial.

Participants in the program experienced a host of financial benefits, according to an analysis co-authored by University of Pennsylvania and UCLA researchers. Beyond that, the study found, the initiative gave people the time and space to make deeper changes in their lives. That included landing better jobs, leaving unsafe living conditions and escaping abusive relationships.

“If you are trapped in financial scarcity, you are also trapped in time scarcity,” Dr. Amy Castro, co-founder of the University of Pennsylvania’s Center for Guaranteed Income Research, told The Times. “There’s no time for yourself; there’s no time for your kids, your neighbors or anybody else.”

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The Basic Income Guaranteed: Los Angeles Economic Assistance Pilot, or BIG:LEAP, disbursed $38.4 million in city funds to 3,200 residents who were pregnant or had at least one child, lived at or below the federal poverty level and experienced hardship related to COVID-19. Participants were randomly selected from about 50,000 applicants and received the payments for 12 months starting in 2022.

Castro and her colleagues partnered with researchers at UCLA’s Fielding School of Public Health to compare the experiences of participants in L.A.’s randomized control trial — the country’s first large-scale guaranteed-income pilot using public funds — with those of nearly 5,000 people who didn’t receive the unconditional cash.

Researchers found that participants reported a meaningful increase in savings and were more likely to be able to cover a $400 emergency during and after the program. Guaranteed-income recipients also were more likely to secure full-time or part-time employment, or to be looking for work, rather than being unemployed and not looking for work, the study found.

“Instead of taking the very first job that was available, that might not have been a lasting, good fit for the family, [the participants were] saying, ‘Hold on a minute, I have a moment to sit and think and breathe, and think about where I want my family to be,’ ” said Dr. Stacia West, also a co-founder of the University of Pennsylvania’s Center for Guaranteed Income Research.

In a city with sky-high rents, participants reported that the guaranteed income functioned as “a preventative measure against homelessness,” according to the report, helping them offset rental costs and serving as a buffer while they waited for other housing support.

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It also prevented or reduced the incidence of intimate partner violence, the analysis found, by making it possible for people and their children to leave and find other housing. Intimate partner violence is an intractable social challenge, Castro said, so to see improvements with just 12 months of funding is a “pretty extraordinary change.”

People who had struggled to maintain their health because of inflexible or erratic work schedules and lack of child care reported that the guaranteed income provided the safety net they needed to maintain healthier behaviors, the report said. They reported sleeping better, exercising more, resuming necessary medications and seeking mental health therapy for themselves and their children.

Compared with those who didn’t receive cash, guaranteed income recipients were more likely to enroll their kids in sports and clubs during and after the pilot.

Los Angeles resident Ashley Davis appeared at a news conference Tuesday about the study findings and said that her health improved because she could afford to buy fruits, vegetables and smoothies. Before, she was pre-diabetic and “my cholesterol was going through the roof,” Davis said.

“I was neglecting my own needs,” said Davis, who described herself as a single mother of a special-needs child. She switched careers and is now studying to be a nurse, she said.

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Abigail Marquez, general manager of the Community Investment for Families Department, which helped oversee BIG:LEAP, said she’s spent 20 years working on various anti-poverty programs.

“I can say confidently that this is by far the most transformative program,” Marquez said.

BIG:LEAP was one of the largest of more than 150 guaranteed-income pilot programs launched nationwide in recent years. The program was funded through the city budget and included $11 million that city leaders moved from the Police Department budget in response to nationwide protests after the murder of George Floyd by a Minneapolis police officer in 2020.

Despite the positive research findings, programs like BIG:LEAP have raised concerns among some taxpayer groups.

“It’s simply wrong for the city government to take tax dollars earned and paid by people who are trying to pay their own bills and transfer that money to other people chosen by the government to receive it,” the Howard Jarvis Taxpayers Assn. said in a statement. “Guaranteed-income programs are appropriately funded voluntarily by charitable organizations and foundations, not forcibly through the tax code.”

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Councilmember Curren Price, whose South Los Angeles district includes some of the city’s most impoverished neighborhoods, introduced a motion Tuesday to continue a version of the pilot with a focus on people in abusive relationships and young adults in need of mental health and emotional support.

Price said he would contribute $1 million toward the next phase from his council funds. Councilmember Hugo Soto-Martinez also pledged $1 million.

Beyond that, it’s not clear where the next round of funding would come from. Price expressed hope the city would continue to support the effort through the general budget.

“I don’t know how realistic it is that it’s going to be $40 million again,” Price said. “But I think it’s realistic that we could receive something.”

This article is part of The Times’ equity reporting initiative, funded by the James Irvine Foundation, exploring the challenges facing low-income workers and the efforts being made to address California’s economic divide.

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Read the Letter to Sullivan & Cromwell

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Read the Letter to Sullivan & Cromwell

300 New Jersey Avenue, N.W., Suite 900
Washington, D.C. 20001
Phone: 202-465-8728
July 30, 2024
Joseph C. Shenker Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
Re: Blacklisting detractors of the Israeli government provoked by the indiscriminate Israeli
killings of infants, children, women, and men in Gaza, including a siege openly earmarked by no
water, no food, no shelter, no power, no medicine, no journalists.
Dear Mr. Shenker:
This letter responds to your remarks reported in The New York Times, “A Wall Street Law Firm
Wants to Define Consequences of Israel Protests,” by Emily Flitter (July 9, 2024).
Speaking as a leader of Sullivan & Cromwell, you stated all applicants for employment would be
vetted for lawful statements, actions, or beliefs that your law firm defines as antisemitic,
including mingling with pro-Palestinian demonstrators chanting “From the river to the sea,
Palestine will be free.” Will Sullivan & Cromwell establish an Index of Forbidden words, songs,
signs, or sayings that would be off limits to any of the firm’s employees?
We are concerned about the absence of due process safeguards that could destroy an applicant’s
professional career in addition to Sullivan & Cromwell’s apparent complacency with hiring
lawyers who engage in hate speech or violence against Arabs or other races. Doesn’t that
discrepancy smack of George Orwell’s Animal Farm, “All animals are equal, but some or more
equal than others?” Is Sullivan & Cromwell, now in its 145th year, seeking to make amends from
its earlier history of notorious discrimination against Jews until the 1950s, not to mention biases
against Muslims and Arabs?
There is no articulable definition of verbal antisemitism free from manipulation for ulterior
purposes. Sullivan & Cromwell seems to equate anti-Zionism with antisemitism. But renowned
scholars of Judaism like Allan C. Brownfeld insist that Zionism is a form of political idolatry that
elevates worship of the State above worship of the Torah and God. Would Sullivan & Cromwell
hire Mr. Brownfeld?
Will Sullivan & Cromwell provide applicants a fair warning of what words or acts will be treated
as antisemitic? What will be Sullivan & Cromwell’s standard of proof? Reasonable suspicion,
probable cause, a preponderance, clear and convincing, beyond a reasonable doubt, or non-
fantastic speculation? What rules of evidence will govern the antisemitism vetting? Will hearsay
be admitted? How will documents be authenticated? Will applicants have a right to counsel to
voice objections and a right to confront their accusers? Who will do the vetting? What selection

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Fred Segal closes its remaining stores, ending a Los Angeles fashion era

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Fred Segal closes its remaining stores, ending a Los Angeles fashion era

Fred Segal, once a centerpiece to the Los Angeles fashion scene, closed its two remaining stores Tuesday, bringing a quiet end — at least for now — to a name that endured for decades as a shopping destination.

The brand, which once had nine stores in California and locations in Switzerland and Taipei, succumbed to a challenging retail landscape, never recovering from the impact the COVID-19 pandemic had on sales despite being a fixture of Los Angeles fashion since the 1960s, said owner Jeff Lotman.

When Lotman bought the company in 2019, he said he had no plans to run the day-to-day operations of the stores, but was forced into the role by the pandemic.

“Everything just fell apart and then I sort of had to become a retailer, which is not what I planned to do,” he said. “I knew nothing about retail.”

Instead, Lotman, who owns the brand licensing company Global Icons, had aspired to oversee a dramatic expansion of the Fred Segal brand that was supposed to include around 20 new shops in major cities across the country and a move into home decor and accessories.

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“It’s not that retail is dying,” Lotman said at the time. “Boring retail is dying.”

The marquee name first appeared in 1961, when Fred Segal opened a small shop in West Hollywood, which grew into a cultural touchstone interwoven into the identity of Los Angeles. Its high-end, California-inspired line of clothes included bikinis, denim shorts and tank tops, often blending luxury with a laid-back look.

The company made its way into popular culture, getting referenced in shows like “Beverly Hills, 90210” and “Dawson’s Creek” and attracting celebrity customers such as Jennifer Aniston and Diana Ross.

Before the pandemic, Lotman said, the company had pending deals to open stores in Dubai, Canada and Japan. The two stores closing Tuesday are in West Hollywood and Malibu.

“Sixty years the company’s been around and it’s a shame that it’s finally coming to a close,” Lotman said.

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One of the company’s downfalls was not having enough self-branded products, Lotman said. Fred Segal stores carried close to 200 outside brands but had few of their own offerings.

“That’s really what we needed to develop to make this thing work,” Lotman said. “Retail is hard and being a multi-brand retailer is even harder.”

While the majority of the Fred Segal empire is shut down, including its online store, a Fred Segal Home furnishings store will remain open in Culver City.

The Segal family owns the Fred Segal trademark, said Lotman, who was licensing the trademark. Any decision about whether to open new stores or begin selling online again would be up to them, he said.

Larry Russ, the family’s attorney, said this is not the end of the road for the brand, but could not share more information.

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“We are going to be looking for a new operator to open up more stores in the future,” he said.

Lotman said he isn’t aware of any concrete plans to reopen business, but he’s optimistic.

“Hopefully someone may pick it back up and get it to go,” he said. “It is truly one of the great fashion brands out there.”

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