Finance

1MDB Explained: The Fund, the Bank, the Financier and the Prime Minister

Beau Brummell · October 31, 2026

A Malaysian development fund, three Goldman Sachs bond deals, a superyacht and a Hollywood film. What the court records say about the 1MDB…

In 2009 Malaysia created a state investment fund called 1Malaysia Development Berhad. It was meant to build the country: power plants, a new financial district in Kuala Lumpur, foreign partnerships. Within a few years, according to prosecutors in the United States and Malaysia, billions of dollars had gone missing from it, and some of that money had turned up in Beverly Hills property, a superyacht, fine art and the financing of a Hollywood film.

1MDB produced the largest recovery in the history of the Justice Department's kleptocracy programme. It produced a guilty plea from a Goldman Sachs subsidiary, prison sentences for two Goldman bankers, and the conviction of a former prime minister. Its central figure, the financier Jho Low, has never stood trial.

What follows draws only on court records, Justice Department statements and major news reporting. Where there has been no conviction, the claims are allegations, and are described as such.

The fund

1MDB was, in the Justice Department's words, a Malaysian state-owned and state-controlled fund created to pursue investment and development projects for the economic benefit of Malaysia and its people. Najib Razak, then prime minister and finance minister, chaired its board of advisers.

According to US civil forfeiture complaints, more than four and a half billion dollars belonging to 1MDB was misappropriated between 2009 and 2015 by high-level officials of the fund and their associates, including Low. Those complaints are allegations; a civil forfeiture complaint, the department notes, is not proven until a court rules.

The bank

1MDB raised much of its money through three bond deals in 2012 and 2013, worth about six and a half billion dollars in total. Goldman Sachs underwrote them. Internally they were known as Project Magnolia, Project Maximus and Project Catalyze.

In October 2020 Goldman Sachs entered a deferred prosecution agreement with the Justice Department in the Eastern District of New York, on a charge of conspiring to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. Its Malaysian subsidiary pleaded guilty to the same charge. Goldman agreed to pay more than 2.9 billion dollars as part of a coordinated resolution with authorities in the United States, the United Kingdom, Singapore and elsewhere. The FBI said it was the largest penalty ever paid to US authorities in a foreign-bribery case.

Goldman admitted that its bankers, working with Low, conspired to pay more than 1.6 billion dollars in bribes to officials in Malaysia and Abu Dhabi to win the business, and that the bank earned roughly six hundred million dollars in fees and revenue as a result. It also admitted that its control functions knew any transaction involving Low posed a significant risk, and that red flags were ignored or only nominally addressed.

The federal courthouse for the Eastern District of New York in Brooklyn, where the Goldman Sachs resolution was filed and Roger Ng was… — The federal courthouse for the Eastern District of New York in Brooklyn, where the Goldman Sachs resolution was filed and Roger Ng was tried. Photo: Ajay Suresh from New York, NY, USA / Wikimedia Commons, CC BY 2.0

The bankers

1. Tim Leissner, Goldman's former Southeast Asia chairman, pleaded guilty in 2018 to conspiring to launder money and to violate the Foreign Corrupt Practices Act, and cooperated with prosecutors. In May 2025 Chief Judge Margo Brodie sentenced him to two years in prison, calling his conduct "brazen and audacious". He agreed to forfeit more than forty-three million dollars.

2. Roger Ng, a former Goldman managing director and head of investment banking for its Malaysian unit, was convicted by a Brooklyn jury in April 2022 of conspiring to launder money and to violate the Foreign Corrupt Practices Act. In March 2023 he was sentenced to ten years. Ng has maintained his innocence.

The financier

Low Taek Jho, known as Jho Low, was indicted in the United States in 2018 on charges of conspiring to launder money and to violate the Foreign Corrupt Practices Act. He remains a fugitive and denies wrongdoing. The Justice Department is explicit that the charges against him are merely allegations, and that he is presumed innocent unless proven guilty in court.

Prosecutors allege that misappropriated 1MDB money paid for luxury property, art, a private jet, a superyacht and the financing of the film The Wolf of Wall Street. In October 2019 Low, his family and the trustees of the assets agreed to a civil forfeiture settlement covering assets estimated at more than seven hundred million dollars, including high-end real estate in Beverly Hills, New York and London and a boutique hotel in Beverly Hills. The settlement included no admission of wrongdoing. With earlier recoveries, the department said the United States had recovered or helped recover more than one billion dollars.

Equanimity at anchor off Villefranche. US prosecutors alleged the superyacht was bought with misappropriated 1MDB money; it was seized in… — Equanimity at anchor off Villefranche. US prosecutors alleged the superyacht was bought with misappropriated 1MDB money; it was seized in Indonesia at the Justice Department's request and returned to Malaysia. Photo: Abxbay / Wikimedia Commons, CC BY-SA 4.0

The prime minister

Najib Razak was voted out of office in 2018. In July 2020 he was convicted in the SRC International case, involving a former 1MDB unit, and he has been in prison since August 2022.

On 26 December 2025, Malaysia's High Court found him guilty on four counts of abuse of power and twenty-one counts of money laundering involving about 2.3 billion ringgit in funds linked to 1MDB. Justice Collin Lawrence Sequerah sentenced him to fifteen years, to run after his current sentence ends in 2028, and imposed fines of about 11.4 billion ringgit. Najib has denied wrongdoing, and the ruling can be appealed.

The Tun Razak Exchange in Kuala Lumpur, the financial district once planned as a flagship 1MDB project. Photo: LegendaryLim / Wikimedia Commons, CC BY-SA 4.0

Why it still matters

1MDB is the case study every compliance officer now learns by heart. It showed how a sovereign fund could be used as a personal account, how a bond deal could become a conduit, and how a bank's own controls could see the risk and approve the trade anyway. The fines were paid, two bankers went to prison and a former prime minister is serving time. The man prosecutors place at the centre of it all has never faced a jury.

The best long account remains *Billion Dollar Whale* by Tom Wright and Bradley Hope, the Wall Street Journal reporters who broke much of the story.