1MDB scandal: Swiss banker fined S$75,000 for failing to flag almost $1billion bank transfer to a Jho Low account

Kuala Lumpur—A Swiss banker who used to work with Coutts & Co. has been found guilty for a bank transfer worth nearly one billion dollars (SGD) that he failed to flag. The transfer of RM2.968 (S$965 million), which should have sounded alarms of money laundering, was moved to an account opened by fugitive Malaysian financier Low Taek Jho, the figure at the center of the 1MDB scandal, wherein billions of dollars were siphoned from the sovereign wealth fund.

The Swiss Federal Criminal Court gave the banker, only identified in documents as “A”, a fine of US$55,000 (around S$75,000) on Friday, July 31.

Said the court in a statement, “There were numerous signs that there were serious indications of money laundering, which grew over time. Despite being aware of these well-founded suspicions, A. left the communication ‘to regulatory officials’ until the moment he left the bank.”

A little-known figure before 1MDB made news, Mr Low was thrust into the spotlight as a high-flying global jetsetter who partied with Hollywood A-listers and spent millions of dollars on a yacht, sports cars, property and art, allegedly plundering the sovereign wealth fund to pay for his lavish lifestyle. He is currently at large, with China recently denying that it is harboring the financier.

Mr Low started a company in the Seychelles called Good Star, and opened an account at Coutts’ Singapore branch shortly afterward, in June 2009. A few months later, Mr Low had asked to stop all communications to the bank’s Singapore branch and requested to get updates from Coutts’ Swiss unit to the following email address: [email protected].

In spite of this, “A” approved Mr Low’s request to transfer RM2.968 (S$ 965 million) from 1MDB to the Good Star account.

“A” wrote in October 2009, “the due diligence is so far good and we have sufficient evidence that the payment is true and valid.”

In 2016, the Royal Bank of Scotland sold Coutts & Co to Union Bancaire Privee. The bank was fined US$6.5 million the following year because it had allowed US$2.4 billion worth of 1MDB assets to be transferred from its accounts into several Swiss banks.

Last week, former Prime Minister Datuk Seri Najib Razak was found guilty of abuse of power and money laundering. He was sentenced on July 28 to 12 years jail on corruption charges as well as fined almost US$50 million (S$68 million) in the first of a series of trials related to the 1MDB scandal, which brought down his administration in 2018.

Mr Najib, who has protested his innocence from the time when charges were brought against him shortly after he lost in the elections in May 2018, has challenged the verdict against him. He is currently out on bail and will remain free during the process of appeals.

In other news related to 1MDB, Goldman Sachs reached an agreement to the tune of US$3.9 billion to resolve the investigations into its role in the scandal. —/TISG

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China denies harbouring alleged 1MDB mastermind