The Key to a $4 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.

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.

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.”

“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.”

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.

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.)

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.

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.”