Update 11/1/18: The US Justice Department will reportedly announce charges against two former Goldman Sachs bankers for their alleged involvement in the 1MDB scheme.
The 1Malaysia Development Berhad (1MDB) scandal remains an ongoing political issue in Malaysia and its early workings are chronicled in the new book, “Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood and the World,” by Tom Wright and Bradley Hope.
“It’s a true-crime thriller,” Wright told Jen Rogers on The Final Round. “It reads like fiction.”
The book focuses on Jho Low, a 27-year-old Malaysian man who persuaded the prime minister of his country to create a sovereign wealth fund. By the end, the U.S. Justice Department alleged, $4.5 billion was misappropriated from the fund.
“It’s an incredible tale,” Wright said. “There was a sovereign wealth fund in the Middle East called Ipic, and the CEO of that fund set up a lookalike Ipic. It’s as if like the CEO of General Electric set up a lookalike General Electric, and then they moved the money into it, and then they just funneled it out to themselves and their associates.”
‘Things that he bought with the money’
According to Wright, then-Malaysian Prime Minister Najib Razak threatened to sue him and Hope while they were writing the book.
“It’s not a money trail story,” Wright said. “It involves Playboy playmates, Hollywood stars. These are all the things that he bought with the money.”
Wright also noted Goldman Sachs’s involvement in the scandal, as the bank helped raise $600 million for the fund and denied any knowledge of the fraud. He is skeptical of their ignorance.
“There was dissension inside Goldman at the time, in real time,” he said. “There were red flags.”
Some of the red flags he pointed out include the sovereign fund wanting to put $3 billion into a Swiss bank account, particularly at a smaller bank, the fact that the fund executives had no experience, and that they were buying coal-fired power plants.
“They were supposed to be helping the Malaysian economy but none of it made any sense,” Wright said.
Goldman Sachs has not been accused of any wrongdoing, and a bank spokesperson told Bloomberg last month that the bank takes “issue with several characterizations in the book.”
‘An incredible and crazy story’
Goldman Sachs (GS) isn’t the only American angle in the scandal. Jho Low also worked his way into the lives of several celebrities, including Leonardo DiCaprio and Ludacris.
Once Low got his hands on some of the money in the beginning, “he really wanted to get in with Hollywood,” Wright said. He allegedly paid Paris Hilton to hang out with him, promised DiCaprio $400 million in film financing, and dated supermodel Miranda Kerr.
In the book, Wright raises the question: Can you get away with white collar crime today in America? And what will the Justice Department do with Goldman Sachs? Will they be fined billions of dollars?
“There’s a revolving door [of banks’ lawyers] at the Department of Justice,” Wright said. “And there isn’t punishment for this kind of white collar crime.”
As for Low, he remains a fugitive somewhere in China. Razak, the former Malaysian prime minister, was arrested in July.
“It’s an incredible and crazy story,” Rogers said.
Follow Adriana on Twitter.
Follow Yahoo Finance on Facebook, Twitter, Instagram, reddit, Flipboard, and LinkedIn.
