The 1MDB Heist: How Jho Low & the Prime Minister stole $4.5 billion

Welcome to Great Business Stories.

And today's episode is called The 1MDB Heist, How Jho Low and The Prime Minister Stole $4.5 Billion.

This episode really is a cracker.

It's the fascinating story of how a young Malaysian businessman called Jho Low, who was educated in Harrow in England, and he formed one of the most notorious and definitely lucrative business/criminal partnerships with the Malaysian Prime Minister.

And together they siphoned off a jaw-dropping $4.5 billion.

It's the story of how Jo Lo and his friends spent their ill-gotten gains by splashing out on parties, multi-million dollar properties, jewelry, art, as well as financing Hollywood movies.

And there's one movie in particular that you'll definitely know.

It's also the story of Malaysia and the endemic corruption that emanates from the very top.

A prime minister who not only brazenly loots the national coffers, but who also is the main suspect in the grisly murder of a young woman.

This episode was recorded last year in April, 2023.

And even now in April, 2024, there are still some court cases going on related to 1MDB, because this is a business story, a business scandal, that's going to be with us for many, many years.

It's a fascinating story, and we really hope you enjoy it.

Hey Keith, how's it going?

Morning Caemin, how are you?

Not too bad, not too bad.

I'm happy to have gone through the 1MDB story that we're going to go through today, because I found it a really interesting story altogether.

Yeah, I mean, for me, when you first suggested it as a topic, I wasn't familiar with the story at all.

Now, as I started to read it, I would have seen some of the society pictures or remember some of the famous poker games, et cetera, but I wasn't familiar with the story at all.

What drew you to it, and how long was it on your radar, I suppose, is the first question for me.

It's been on the radar for years, because it's a story that just keeps popping up, because as we go on and talk about, court cases related to this are still ongoing.

Even as we're talking, there's Pras from the Fugees is actually in court this week, charges related to it.

So it kept on popping up, and it's just a fascinating story.

And when I started looking into it, it is one of the greatest financial scandals, and the Department of Justice called it the largest kleptocracy case to this.

So I was kind of going, you know what, I got to just start doing a big deep dive into this, find out what exactly it's all about.

And I suppose to give our listeners kind of a quick summary of what it's about, it's basically about this fund over in Malaysia, which is called One Malaysia Development, BERHAD, and BERHAD stands for PLC over in Malaysia.

And it's basically where a young guy got together with the Prime Minister of Malaysia, the Prime Minister of Malaysia set up this fund that was meant to sort of develop infrastructure and provide jobs for the people of Malaysia.

And they basically just looted this and stole over 4.5 billion from us.

And it's as much a story, I suppose, about the stealing of the money as it is about the story of how they spent that money as well, which was kind of crazy as well.

You mentioned all the society photographs, and if you Google the characters that we'll be talking about in this, you will see a lot of photographs of a lot of champagne, a lot of yachts, a lot of partying.

And it just, the extravagance of it was just off the charts.

And what did you use for your research?

I went my usual route, as our listeners will probably get familiar with.

I go to the route of online, where I look up the credible news agencies, Wall Street Journal, New York Times, all the online sources.

But for 1MDB, there's two particular sources I need to give a special mention to.

And one of them is an online website called The Sarawak Report, which is founded and edited by a lady by the name of Sarah Reu Castle-Brown.

And a very brave, interesting journalist.

Actually, she had death threats while she was writing this.

And then the other main source is a fantastic journalist by the name of Mary Ann Jolly, who works for Al Jazeera, and they have an excellent 101 East documentary series.

And she has several videos that you'll be able to see on YouTube related to this scandal, including a one-on-one interview with the Malaysian Prime Minister, which is really, really worth watching just to see him squirm.

And you went down the book route?

Yeah, I went down the book route.

So I read A Billion Dollar Whale, written by two Wall Street Journal authors, Tom White and Bradley Hope.

A really interesting book.

It's a very labyrinthine sort of story.

Fascinating, lots of huge casts of characters.

Deliberately, I would expect probably to muddy the waters and smear everybody into some of these projects, but they're fascinating nonetheless.

It is, it is.

And I suppose there's two main characters.

You're right, there's a load of characters.

I try to keep the names to minimum because there are so many different characters and there's so many different deals involved.

But the two main characters involved here are the first guy, a guy by the name of Lo Tech Joe, but more commonly known as Jo Lo.

And he was the mastermind of this whole scheme.

Born in 1981, the son of, I got the impression his parents were upper middle class, not hugely wealthy, but wealthy enough.

Yeah, I think so.

There's certainly nowhere wealthy, as wealthy as he attempted to kind of portray them later on, as good questions start to arise about how he was accessing all of this capital.

He started referring to family wealth and historical wealth, but I don't believe they were certainly wealthy enough to give him a very good education in the UK and the US, but certainly nowhere near the levels of wealth he would have potential to portray them as having.

Yeah, because I mean, he did go to, he went to Harrow in London.

And I mean, I looked that up, like that's 41,000 a year.

So, you know, they had a, they were wealthy enough.

And obviously they sent him to Harrow because if you look at the alumni in Harrow, you've got seven former prime ministers like Winston Churchill, Benedict Cumberbatch, Sherlock Holmes, and what's he doing?

The Marvel universe is Dr.

Strange.

That's it.

And as you said, then after Harrow, he went to Warden Business School.

I don't know if you had a quick look up at Warden.

I had a look at the alumni.

In the alumni alone, we have, and I'll just go off a little tangent here, but the sixth great story is already from Warden Business School.

You have Warren Buffett went there.

Interesting story there.

John Scully, do you know that?

Oh, yes, the apple guy, the sugar water guy.

Yes, and he's the guy who sacked Steve Jobs.

So he'll definitely come into one story.

Another guy by the name of Stephen A.

Cohn.

Are you familiar with him?

No, I'm not familiar with that name.

There's a great book called Black Edge.

He owned a hedge fund, the most controversial hedge fund, outperformed all other hedge funds, ended up being fined 1.8 billion.

Great book on that.

Another alumni, Michael Milken.

Oh, yeah.

Chuck Bond King.

The other guy, Frank Catrone.

If we're doing the internet bubble, he was the guy, if you wanted to do an IPO back then, you went to Frank Catrone.

Did he graduate, I wonder?

I don't know if he did.

I don't know if he did.

I don't know if we do one on Elon Musk, but we definitely do one, I'd say, on the PayPal Mafia because of the great-

Yeah, absolutely.

And another alumni is Trump.

So if he would-

Right.

Oh, bone spurs themselves.

Yes.

No, again, I think if we're doing a story on Trump, probably just on his business.

I don't think you're getting into the politics side of it.

But yeah, so that's where he went to school in America.

But you're right, if we go back to England, because that's where it all started.

He was in Harrow and he met a guy called Rizak Najib.

Rizak Najib is the Malaysian Prime Minister's stepson.

And through this relationship with Rizak, he got very friendly with the Prime Minister and his wife, a lady by the name of Rosma Mansour.

And as I said, I don't want to get into too many names, but it is worth mentioning her, because she's quite a central character in all this, isn't she?

Yes, absolutely.

Yeah.

And Amanda Marcus of her time reading.

Very much.

And she wasn't a wilting flower.

I mean, when you go through the transcripts and all that, and as we'll talk later on when it comes to the court cases, she was very much a power broker, and as involved in this whole scheme as Lo and the Prime Minister, a guy by the name of Najib Rizak, who would be the other central character.

And is this one of these two schools?

I think there was probably, when you look at Jo Lo and his centrality to the story, I guess, there's two elements that really stand out.

One is the concept of the Sovereign Wealth Fund, which he would have probably identified through the Middle Eastern guys he was rubbing shoulders with and became aware of it there.

That's one formative moment, I would think.

And the other one is probably his ability to network and party.

His networking and partying was definitely, I mean, he was a smart guy, that's obvious.

But his ability to network and to pick out people of key influence he could use to meet other people of key influence.

And as you said, partying, because he seemed to have met an awful lot of these people while he was out partying.

That seems to be, to me, his key strength.

He definitely leveraged that to the maximum benefits.

So what happens then after working?

Well, it seems that his earlier business career, and he's a very young man even here, but I didn't get a whole lot on his initial successes other than his first big recorded deal was in 2006 when he was 25, and he was financed by a Kuwaiti bank to purchase a luxury high rise building in Kuala Lumpur for $87 million, okay?

Now, it doesn't say I couldn't find out how much he made from that.

So he was only 25 at the time.

Personally, I think in the book, they say he didn't make much, if anything, at all from that.

Didn't he?

But it still set him on the track in that after he did that deal, he set up an investment group that included a Malaysian prince.

And this again talks to his ability to network.

So there was a Malaysian prince, a Kuwaiti sheikh, and a friend of his from the United Arab Emirates who had done to become ambassador for the United States and Mexico and is now one of the most influential people in Abu Dhabi.

So he set up this fund with these people.

And again, there's not much detail.

I didn't get much detail on what this sort of investment group did.

Did you get anything on that?

I know there was an investment in oil tankers.

So I guess that's fairly typical in the oil industry and that would be linked to the Middle East.

I'm not sure if that was one of the investments in 1MDB or whether it was in the earlier investment fund or whether one was sort of collapsed into the other.

I'm not entirely clear on that.

Yeah, it's all a bit fuzzy.

His early business career, I think, is very hazy.

It really doesn't crystallize what he's up to until he starts this 1MDB funder.

He gets involved with the Prime Minister.

And I think the key moment that we can start to look at is it's 2009, September 2009.

You've got Jo Lo, you got Najib Razak, the Malaysian Prime Minister, Najib Razak's family, his wife, his kids, on a 300 foot super yacht off the coast of, no, sorry, on the Mediterranean Sea.

And they're there with a Saudi prince, a guy called Prince Turki bin Abdullah, bin Abdulaziz.

He's the seventh son of the king.

And so he's a brother of the infamous Muhammad bin Salman, the current Crown Prince, and the guy who's widely believed have murdered or ordered the murder of Jamal Khashoggi, the journalist.

So we've went from bone spurs to bone saws.

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Let's...

Oh God, that's bad.

So this guy, this Crown Prince is a brother of MBS, and there's another guy on board, a guy by the name of Tarek Obed, the guy that's Joel Omes, while partying in Geneva.

So this is where the discussion on that boat took place, where I presume they decided they would set up this 1MDB fund.

Well, I think there was a fund already there, and the Najeeb Razak kind of took over that fund because as prime minister, he was also strangely minister for finance, which I thought really weird.

And they rename it 1MDB, and they set up a joint venture with these two Saudis who have formed a company called Petro Saudi International.

So they're the guys that had the two Tonkers.

Exactly.

And the Petro Saudi told potential partners that he controlled oil fields in Central Asia, which he would put up as collateral to secure cash fund from state investors.

So on this, the deal was agreed, or Petro Saudi and 1MDB formed a 2.5 billion joint venture, and they were going to use the funds to invest in projects in Malaysia.

And I'm assuming to create jobs and develop infrastructure.

Is that more or less what the $2 million real book would say?

So this concept works very well.

There's loads of sort of examples, particularly, I guess, Norway.

This is a shining beacon of one of the state-backed sovereign wealth funds who invest very carefully, minimize the impact on the resources within the kind of home country and try to develop a sustainable investment fund for the benefit of all.

That last part of the sentence seems to have been missed when the model is copied over to Malaysia.

But yeah, that sounds exactly right.

Yeah.

And I suppose that's the key difference here, because Jo Lo and Najib Razak really just, it wasn't as if they set up this fund and their intention was, you know, we'll take a little bit here and a little bit there.

Their intention basically was just to under this fund and take as much out of it as possible.

It wasn't just skimming off the top.

Like this was, this was like crazy.

Yeah, because I think one of the amazing was, we had set up the fund, Petro Saudi goes, OK, so we're going to put our assets in.

Yeah, money goes into the fund and go, OK, so we're going to take our money back out.

That represents the value of our assets.

Yeah.

So that should have been a big red flashing light and alarm going off somewhere.

So as soon as the account was nearly kind of set up, 700 million US dollars whipped out.

I mean, within weeks of this meeting on the yacht in September, the fund was set up.

Jo Lo then told the 1MDB board, because again, it should be noted that Jo Lo never actually sat on the board of 1MDB.

And throughout this whole saga, Jo Lo said, I had nothing to do with 1MDB, but he did.

He called the shots because he had the backing of the prime minister and he could ring up 1MDB whenever he wanted and said, we need this.

And the 1MDB board knew that this is at the say so of the prime minister.

So while he was on board, he did have control of the board.

That's one of the amazing things.

As things started to sort of unravel a little bit, in the book, what they say is that he communicated primarily by email, but not in emails in his own name.

So he had a number of associates.

He would communicate, but not really communicate in his own name.

So a master of being one remove away from the blame.

If you're a very careful, cute sort of a guy who made sure that there was always one remove away from him.

I guess that's one of the other interesting things in the story.

It's always like a theme.

He was very generous to the people who surrounded him.

He would have spread the love and to a certain extent, I suppose, spread the blame around his circles.

So he involved everybody in the scheme indirectly.

So there was a sheer guilt and responsibility from everybody who he circulated with and worked with.

Most definitely.

I mean, he's not a guy you would have liked to have missed because the amount of money, as you said, that he offered people.

It would have been hard for a lot of people to turn this down because let's go back to this initial deal.

So 1MDB is set up.

Within weeks of it being set up, Jo Lo rings up the 1MDB board and says, yeah, Petro Saudi had put 700 million into this joint venture as a loan.

We need to pay them 700 million now.

And the IMDB boards went OK.

Basically, they gave 700 million into the fund and Jo Lo moved it straight out of his account.

Or straight out of the account into his own account.

And as you said, probably many steps were moved.

It was hard to track these things, but it did go into an account connected to Jo Lo.

And on the same day that he transferred that 700 million, two Petro Saudi directors, one the guy Tarik Obad, we named on the bows, and another, and he was only 32 at the time, another guy called Patrick Mahoney, the Americans would probably say Mahoney, but it is Mahoney, a guy based in London.

Both of those guys got paid 85 million dollars each.

Now they had only set up this within a few weeks.

So within a few weeks of meeting Jo Lo and getting this deal sorted, they got paid 85 million each.

Basically, they were paid 85 million to allow Jo Lo to steal 700 million.

And you could see that would be a hard thing for a lot of people to say no to.

As you said, he's overly generous, like 85 million for a few weeks work.

Yeah, and brazen.

I mean, this isn't dribs and drabs of money coming out of the account.

This is a huge show of the total capital of the company.

We've dealt in one go.

That's what I'm saying.

Brazen is the word.

They weren't skimming a bit to try and get away with it.

They just swiped it all and just took it all out.

And then you think, all right, so what were they doing with the money?

This initial 700 million.

The Sarawak report, and I'm sure you probably had it in your book as well.

They have a few messages from Facebook that were posted when the 700 million transfer went into the account controlled by Jo Low.

And it's from one of his lieutenants.

And on Facebook, and you can see these messages on Facebook, he texted or he put in the following message.

I feel the earth move under my feet.

Right.

And then 10 days later, the same guy posted a message saying in Vegas, bring a jacket because it's raining crystal.

Ha ha ha.

Yeah, the earth moving under their feet was probably one of the luxury yachts or not.

Probably what?

Because I mean, if you then look at the figures, it really did rain champagne because between even October 2009 and June 2010, just a period of eight months, it's estimated that Lo and his entourage spent over 80 million on alcohol, gambling in Vegas, private jets, renting super yachts and to pay for playmates and Hollywood stars to hang out with them.

So Hollywood stars was definitely central to the whole Jo Low.

Yeah, poor Jamie Foxx comes out all over the book.

He seems to be like a personal entertainer for Jo Low.

I only saw him mentioned as he attended this party.

No, he sings and entertains and compares.

He's cited several times in the book.

Well, this is right.

I wonder if he's one of the guys they're referring to because one of the Hollywood personalities said that he was offered half a million dollars to accompany Jo Lo on his entourage to Vegas with private jet hospitality and gambling chips thrown in.

That Hollywood personality who wasn't named said he refused, but he said he knows that other Hollywood people accepted the offer.

And another one, you mentioned Jamie Foxx, one that I came across because I suppose visually it makes a big splash, is him and Paris Hilton.

Paris Hilton was hanging out with him all the time.

And even though she denies that she was ever paid to hang out with him, Hilton's entourage and Low's entourage were in each other's company an awful lot of the time.

And I saw for Hilton's 29th birthday, Lo bought her a Cartier watch, gave her $250,000 in gambling chips, and asked her to join him at the barricade table, where in the space of 10 minutes he proceeded to lose $2 million.

Is that admitted in your book as well?

Yeah, absolutely.

And there's several instances of he and Paris Hilton being socializing and partying together.

And then of course, we'll probably get into it in a little while, but Leonardo DiCaprio and some of the Hollywood guys seem to have given that sprinkle of stardust to the entourage as well.

Definitely.

And accommodation as well, right?

So they get these kind of luxury suites and Vegas hotels, and they essentially reserved them for months.

And just the excess is just mind boggling.

That's it.

I mean, it is the excess.

And when you're spending that kind of money, even though you've stolen 700 million, and I think after paying off the Petro-Saudi guys, you've got 530 million, I'm guessing 530 million can only get you so far.

So, you know, Jo Low and his guys had to start dipping more into the 1MDB money bank, Piggy Bank.

And they did.

I mean, I've got a few more figures here.

Like in 2010, Low got 1MDB to invest 500 million in joint venture.

And he used 260 million of that, just took it out to buy a Malaysian bank, of which he was the majority shareholder.

And apparently 260 million was way more than the bank was worth.

So he made a nice bit of money out of that.

And then in 2010, he got 1MDB to add an additional 830 million to the joint venture.

And the US Department of Justice officials said that 330 million again went straight out into an account that was controlled by Jo Lo.

So within the first two years of 1MDB, we're looking at well over a billion already stolen out of the account.

So it's amazing.

It is nuts.

And no alarm bells going off.

I think one of the other interesting things is this isn't actually too much after sort of banking crisis and that bomb.

So you'd imagine regulators and oversight should have been sort of, you know, alarm bells, particularly Goldman Sachs appears to be sort of.

Well, I mean, we're going to get into Goldman Sachs now because that's where it really starts to rain money.

And I think Goldman Sachs are very much in the firing line here.

Let's talk about Goldman Sachs first of all, because Goldman Sachs entered the equation through a German banker called Tim Leissner.

Now this guy is a German.

He definitely doesn't sound like any German I've ever met because this guy, he had a reputation as a ladies man.

He converted twice to Islam, both times to impress Muslim women he was dating.

He was known in Goldman Sachs as a hardcore, hearty animal.

While the whole 1MDB scandal was going on, he married Kimora Lee Simmons, the former wife of Russell Simmons, founder of Def Jam.

Definitely another good story, I'd say, there in Russell Simmons and Def Jam.

And she herself, very successful businesswoman on the fat fart clothing line.

She's a net worth of about 200 million.

But while he was married to her, he was also married to another woman.

And he had given Kimora Simmons a Photoshop documents showing that he was divorced from this one.

So he's a bigamist as well.

So he was definitely a flamboyant, I suppose, liar.

Yeah.

You can certainly see how sort of birds of a feather flock together in terms of the relationship with Jo Lo then.

Exactly.

But this guy, despite all that litany of, I suppose, character flaws, he was still made chairman of Goldman Sachs Southeast Asia.

And why?

Because apparently he was good at bringing in the money.

He was a rainmaker.

And although somebody said his character suited countries like Malaysia.

And I think this is when you said, you know, why weren't there any red flags?

There should have been red flags in the US, most definitely.

But in Malaysia, I think, as we'll find out, the level of corruption is so deep.

And the power that the ruling party has over all aspects of life, that this story really had an awful lot of trouble filtering through to the general public.

Even when it started being broke in the US.

Plus there was the political reality as well, I suppose.

So yes, a corrupt country, but at the same time, I believe Obama was in power.

He was turning his political focus towards the Far East, in an effort to head off the influence of China.

So what's interesting from a geopolitical perspective is, I guess, what you have is maybe a deliberate overlooking of some of those excesses and some of that corruption from a geopolitical perspective, because it's convenient, politically expedient to do so.

I think that's the reason.

I think I saw photographs.

I think Najib Razak, the Prime Minister of Malaysia, allied himself very closely with Barack Obama.

There was him and Barack Obama playing golf together.

I think on the political sense, that probably had an impact as well.

But Goldman should have definitely, I mean, Goldman did know.

When we look at this, just getting back to Tim Leisner, he and a guy called Roger Eng, who was head of Goldman in Malaysia, got together with Jo Lo and they said, okay, well, let's raise some bonds for the 1MDB fund.

Now, Goldman Sachs had already red flagged Jo Lo and decided not to do business with him previously because they considered the source of his money to be very, very suspect.

And that's doing business with him personally as a private banking client.

Yes, that was this, but he was on their radar.

So he was on their radar.

They knew not to do business with him.

And yes, Goldman Sachs went on to underwrite $6.5 billion into the 1MDB fund.

And I'm guessing, because we have other examples of this, I'm guessing they knew that Jo Lo was involved in this.

But why did they decide to do business with them?

Well, I think one of the reasons was, when you look at the $6.5 billion that they underwrote for these bonds, they earned Goldman Sachs over $600 million.

That's nearly a 10% commission.

Whereas the normal commission on these type of bonds is 1% to 2%.

So Lo was paying 10%.

And I'm guessing that this maybe smoothed Goldman's conscience.

When it came to...

It's no wonder Tim Leiser was given somewhat, I suppose, license to do his piece of this when he was bringing in this sort of money.

Yeah.

So it is a big stain.

And I mean, as we'll see later on, Goldman paid dearly for us.

But in the course of a sudden year between 2012 and 2013, Goldman raised 6.5 billion.

And it's estimated that out of this 6.5 billion, I think something like 2.5 billion was stolen by Jo Lo.

They're the figures I had.

Would you have the same numbers?

Yeah, it's very hard to be definitive about it, I suppose.

I think for me, the other interesting point is to try and understand how or what they secured those bonds against.

What were the assets?

Yeah, I didn't find anything there.

My sources were more or less based on just the main headline figures, and they didn't dig into, like, what were they telling each other, and what were they telling outside potential investors?

I'm not sure because they whipped out the 700 million early on.

So I don't know what assets were left.

I know certainly they would have pointed towards these oil tankers or transport ships, but there must have been other physical assets that were bought.

I remember reading about there was talk of, in the process of buying certain refineries down in South America, was it in Harrogate or stuff like that?

But I couldn't find, in all my research, there was very little real assets.

There was a few hotels that Jo Lo bought.

But there wasn't a whole lot there.

Yeah, and then there's a little bit of sort of ambiguity when you see purchases happening.

Well, same as spending, really, that kind of line between what's Jo Lo property and what's company property.

So it was a steak bought in EMI Music, but I think that might have been by Jo Lo personally, as opposed to through the fund.

Yeah, it's all very murky, but I suppose what is out there, and this is really, I suppose, the iPop and stuff, as you mentioned, what Jo Lo seems to have bought personally.

And I got a list here, and it really is, it's just crazy.

Now, he bought all this in the space of just a few years, and it just shows you how extravagant and how out there.

And while he was doing all this, you can't spend this type of money without raising eyebrows.

And he did raise eyebrows.

People were saying, where's, who's this guy, and where's he getting all the money?

Because this is what he bought.

These are the kinds of things that when you buy them, they're in the papers.

So he bought a four bedroom penthouse and time Warner Center for $30.5 million, a condo in Soho for $14 million, a house in LA for $39 million, a house for the Prime Minister's stepson in LA for $17.5 million.

He bought a penthouse in London for £35 million, a red brick in Belgravia, London for £17 million, a private jet for $35 million.

In 2013 alone, he spent $330 million on art.

On art.

And then between April 2013 and September 2014, he bought $200 million worth of jewelry.

8 million of that apparently went to the supermodel Miranda Kerr.

Was he dating her or was he just...

So she had broken up with Orlando Bloom, I think.

They'd moved into sort of each other's orbit.

He shared her with gifts.

But I think quite not that long afterwards, then she would have met Evan Spiegel, the Snapchat guy.

Yeah, I think they're still married and have a family together.

So I don't know how real it was, but that's a theme.

Yeah, sure.

You know, the friendships are beautiful.

You're never sure if he was dating them or not, or if they were just along for the ride.

Yeah, and he had a long standing girlfriend from back home as well.

So yeah, the long-standing sort of relationship, which is a little bit peculiar because sometimes she was out in the open, and sometimes she wasn't.

Then he had a girlfriend who was a singer, a Malaysian singer.

I heard about her, yeah.

And I think he tried to help her develop an international fan base, but with limited success.

Right.

I wondered if his girlfriend back home could get $8 million worth of jewelry.

I don't think so.

I think the Prime Minister's wife was the biggest recipient of some of that.

Interesting you should mention her because next on my list was, I don't know if they referenced this in the book, a $27 million pink diamond necklace.

And there was a famous meeting between Jo Lo, Rosemar Mansoor, that's the Prime Minister's wife, and the New York jeweler Lorraine Schwartz, the Missana yacht, again in the Mediterranean.

And the hire of the yacht itself apparently cost $4 million just to hire the yacht so that they could meet up and discuss.

And maybe they were doing a fishing or whatever, but the end result was that Jo Lo bought Rosemar Mansoor a $27 million pink diamond.

Pink diamonds, yeah.

And I'm guessing there that maybe Jo Lo, after spending $4 million on that yacht, probably thought, you know what, I'm probably better off just getting my own yacht and smashing out all this cash.

So he went off and he bought a yacht called the Equanimity, which he bought for $261 million.

And that was actually used as a way to try and determine where he was.

So because that boat became so identifiable when he started to run sort of run afoul of the law, when he started to move into the crosshairs of legal entities, they tracked the location of the boat to try and understand where he might be.

So it's like some Bond villain or something, you know?

Some amount of money.

And then the final thing I have on his, no, it's two more things on his spending spree.

So there was his 31st birthday party.

Oh yeah, notorious.

Yes.

Yeah.

I mean, this birthday party, apparently the host of Lifestyles and the Rich and Famous, I forget his name now, but he reckoned it was the most expensive party in LA ever.

And he put a price tag of $100 million on the party.

Yeah.

So it was private jets in, there was accommodation on the strip and all of the suites and the casinos.

There was limousines and private car hire.

Just crazy stuff.

In your Ferris wheel, a car from Solid Ice.

But I thought this was the best.

Britney Spears was paid a million dollars to jump out of a birthday cake and sing Happy Birthday to Jo Lo.

And the Gangster Rap, Gangnam Style.

Gangnam Style.

Sigh or whatever.

He was apparently paid even more than a million dollars just to perform at the event.

Yeah, I guess Britney's jumping out of the cake is a bit like Miranda Monroe.

That's what it was likened to in the book anyway.

Was it?

Yes.

As you said, Jamie Foxx was there.

DiCaprio was there.

Kanye West, Kim Kardashian, Robert De Niro.

All of Hollywood by the sound of it was there.

So he was cuddling up to movie producers and directors as well.

So he would have met DiCaprio and would have played a lot of poker with him.

DiCaprio was a famous poker player.

So yeah, it's kind of a fascinating kind of character.

But what striking is, I guess for me, when you see pictures of him, he looks uncomfortable and awkward.

Yeah.

He doesn't look like he's comfortable in the company of these A-list Hollywood superstars, really.

And this was in the party.

They said there wasn't just something like a VVVIP, those different areas of VIP sections.

And Jo Lo stayed in what was obviously the VVVIP section, just on his own with one or two friends.

And he'd come out, they said, every now and then just to say hello.

But you're right, the whole thing, people that were at the party said it was so strange.

He wasn't mingling.

He didn't seem comfortable mingling.

He wasn't the sort of the life and soul of the party, this gregarious, outgoing kind of fella.

He stayed in this roped area with a few of his close friends, and that was it.

So yeah, he definitely doesn't seem like your standard playboy, but it seems like he still wanted all the surroundings and the trappings that come with being this rich playboy.

Yeah, and I wonder, it was so ostentatious and so obvious.

When were the alarm bells ringing?

And did anybody, surely the prominence of these people and the lifestyles that they had, should have been ringing alarm bells back home, right?

You would have thought so.

This was very public.

His spending was very public.

There were photos of him starting to appear in magazines.

And talking about public, he financed the Prime Minister's son-in-law set up a production company called Red Granite.

Jo Lo financed it, and Jo Lo, through 1MDB, put in 100 million into the Wolf of Wall Street film.

And this was hugely public.

And so public that Leonardo DiCaprio thanked Jo Lo from the stage when he received his Golden Globe Award.

So you're right.

Whatever about this filtering true to America, and I think Jo Lo had loaded tall tales to tell any journalist that asked as to where the source of this money was coming from.

But surely people back in Malaysia would be kind of going, no, this is all.

Yeah, and there was alarm bells.

I know certainly the actual wolf of Wall Street, his name escapes me right now.

Jordan Belfort.

Yeah.

Said, I know a con man when I see.

He said there's something just not right about this.

Oh, when he messed Jo Lo.

Yeah, so he was a consultant to the movie, obviously.

Of course, yeah.

And don't forget that this was their second foray into Audi, what they made, Dumb and Dumber 2, which is a disastrous movie.

And we're negotiating in total money around in an effort to buy the rights to all sorts of movies at this stage.

Yeah.

I think one of the lucky moments in this story is the fact that it was an R rated picture are likely to be given the script and what they wanted to do.

And some of the other studios were reluctant to be involved in it or reluctant to finance it.

And there are others out that the financing might be problematic.

So to a certain extent, it was a lucky one to pick up.

They were lucky.

They were in the right place at the right time.

Yeah, because it was challenging to raise finance and support for this movie because of the nature of the script, be it drug taking and sex.

Yeah.

Yeah.

And partying, of course.

A movie about a guy who swindles millions, parties like it's 1999, buys a yacht, is actually financed by a guy who is doing exactly that.

But yeah, so I mean, it was all very public.

But I suppose we've talked a lot about one guy who's involved, but none of this would have happened without the input and the say so of the Prime Minister of Malaysia.

So maybe he was able to suppress some of this news from...

Well, I mean, as we get into this, he definitely was.

I wasn't aware of Malaysia or Malaysian politics, really, until obviously I started looking into this.

And it's interesting.

Najib Razak, the Prime Minister, he was political royalty in Malaysia.

That's right.

His father was the second Prime Minister ever of Malaysia.

His uncle then became the third Prime Minister ever of Malaysia.

They led a party that held on to power since the foundation, since Malaysia became independent in 1957.

And so Razak was the heir apparent.

He was an Anglophile, went to school and college in the UK, seen as a moderate and was seen as a good bit more liberal than other Malaysian politicians.

And initially he transformed tough laws and public gatherings.

He cut government subsidies, loosened restrictions on foreign investment.

But as the spotlight started to focus on his corruption, he became less moderate and less liberal.

He reinstated detention without trial.

They pursued a number of their critics on sedition charges.

There was stuff in his history before he became Prime Minister that definitely would have pointed to his darker side.

Are you aware of the submarine deal?

This is really interesting.

This is a bit grisly.

This is all fun and games, taking millions, spending them and all that.

But this is actually a very scary part of where corruption can lead to.

So this is a scandal that followed Razak throughout his career.

And it's an event that happened in 2002 when he was Minister for Finance, or Minister for Defense, rather.

He signed a 1.2 billion submarine deal to buy three French submarines.

And a Mongolian interpreter and young mother by the name of Atlantuya Sharabu acted as an interpreter for this deal.

Now it's transpired that there was a 114 million kickback that went into a company controlled by Razak's right-hand man.

And the money was apparently for an inverted, so-called consulting work, even though the company that the money went into had only been founded a few months beforehand.

So it was basically corruption.

The majority of that 114 million you can be sure went to Razak.

Now, apparently Atlantuya, the interpreter, was promised 500,000 euro from this.

And she was also having an affair with Razak's right-hand man.

So it's all a bit messy.

But basically she never received the money.

And it's believed that when she threatened to talk about what she knew about, she was kidnapped, taken to a forest, shot dead, and then military-grade explosives were strapped to her body and she was blown to pieces.

Yeah.

Now two policemen from an elite squad, whose job it was to protect senior politicians and who had no connection with Atlantuya, they didn't even know her.

They had no connection at all.

They were found guilty of her murder.

And apparently all the evidence points to them, and they've actually admitted to us.

But they've also said that Najib Razak, the Malay current or the Malaysian Prime Minister during 1MDB and behind all this, that he ordered her murder.

Now there's a lot more to this story than we can go through here, but I'd really recommend any listener that wants to see more of this.

They look up the 101 East documentary by Mary Ann Jolley, she's a journalist I've referenced before, and they're really going to detail all this.

And is that who wrote the story?

No, the story was, there was a trial because his right hand man was implicated very early on in the story.

Now he got off, and Razak has always maintained his innocence, but the policemen who were found guilty of it, I think one of them is still in Australia, but one of them was caught and is in Malaysia on death row at the moment.

And that policeman has said that he took his orders from Razak, and it was Razak who ordered that they kill her.

So very, very grisly.

So this is the kind of guy you're dealing with.

Yeah, you're right.

It's not just sort of the fun and games and the entertainment and the purging.

It's ruthless.

Yeah, nobody gets in his way.

And if they do, he's take whatever step necessary to make sure that he doesn't get implicated.

But anyway, I suppose getting back to 1MDB, how did Razak profit from this?

Well, within days of the 2013 Goldman Sachs bond offering finishing, 681 million of funds were placed into Razak's account, which I just found amazing that he didn't even try and hide it.

It went straight into his own personal bank account.

It didn't even rest anywhere in the meantime.

Didn't even rest, well, I'll have father Ted's.

No, it went straight into his bank account.

So there was that huge upper cash.

There was jewelry and gifts to the family.

There was the transfer of property.

I mean, what was the total amount that the Razak family received?

Nobody knows, I mean, we know there's that 681 million that would knit his account.

We know then, and I've got a litany of what they found in their property when they raided them.

But I suppose it's worth letting the listeners know that it took a few years for this to come out in Malaysia because Razak was in power.

And the transfer of 681 million happened in 2013.

And it was only in 2015 that the Sarawak Report got loads of leaked documents from a whistleblower.

And a whistleblower is a whole other story onto itself because this poor whistleblower ended up in jail in Thailand.

I mean, there's so many strings to this.

But the whistleblower gave the Sarawak Report loads and loads of leaked documents.

They leaked tons.

And the documents showed that 681 million was transferred from an account in Singapore that was linked to Jo Lo and went into Razak's account.

And because Razak was in power, he was able to control the narrative.

He basically sacked the Attorney General and put in a new Attorney General.

Any politicians that started raising concerns were arrested on spurious charges.

There were four members that headed an investigating Parliamentary Account Committee.

They were promoted without any choice to cabinet positions, which then left them with no power to continue investigating.

And the committee's work was declared suspended.

And then a mysterious fire swept through police headquarters where records of white-collar crimes were kept.

And at the same time, the government started blocking any websites that were reporting on this.

And they also put out an arrest warrant.

They asked Interpol to put out a red-nose arrest warrant for the arrest of Claire Rue Castle-Brown, the editor of Sarah Caporte.

Interpol refused to do so.

She's Gordon Brown's sister-in-law.

She is, and a real tough cookie, by the way.

Yes.

So he basically, while because he was empowered, he was able to shut down any mention of this.

And so then you're kind of going, okay, but it still came out that he had 681 million.

So it took him a few months to explain that.

And when he did, he said, the 681 million was a donation from Saudi Arabia as a thank you for helping in the fight against Muslim extremists.

And it was used to fund his party at election time.

And the attorney general, the new attorney general, who he put in place, even came out and said, yeah, that's all good.

Money came from Saudi Arabia, and the prime minister gave 620 million back because he didn't spend all of it.

So they used it to sort of, because it was an election around this time as well, so they would have used some of it for local election purposes.

They would.

Well, a fraction of it.

A fraction of it.

And I'd say it must have hurt Razak big time to give 620 million of that hard-earned cash back to...

Yeah.

He said he gave it back to Saudi Arabia.

But there were reports from the two guys you talk about, from The Billion Dollar Whale, in The Wall Street Journal at the time, and in The Sarrac Report, they had tons of documents showing that this was a loaded BS, that the funds came from accounts linked to Jo Lo.

And how did the wheels come off?

I mean, it seems like, okay, so one had Jo Lo starting to maybe re-portray and excuse his lifestyle, talking about historical wealth.

He started to realize, I think, as news was breaking back home, that he needed to be a little bit more careful around how he communicated, how he was seen, so he seemed to dial back the high-profile visibility a little bit.

Where did it all start to turn?

When did things start to take a...

Well, I'm not too sure about the history or the record in America, because the American Department of Justice were definitely on to Jo Lo, but where it all really started to unravel for Razak was his party lost power.

His party had been in power since 1957 or 59.

He knew as long as he stayed in power, he was fine.

But the opposition who ran against him, ran against him on the promise that they will investigate 1MDB.

So they won.

They started investigating 1MDB.

They raided Razak's house.

When they raided Razak's house, they found 567 luxury handbags, over $30 million in cash.

They found 423 luxury watches, and they found 12,000 items of jewelry, said to be worth around $273 million.

So this was, again, there's pictures of this online of the police raid, where there's supermarket trolleys full of all these luxury goods.

So this was the beginning of the end for Razak, and for Jo Lo as well.

And the end of it was, for Razak, was that he was brought up on charges.

He was convicted in 2022, sent to jail for, I think it was 12 years, and he was fined $49.5 million.

And his wife, Rosemar Mansoor, again, while we haven't talked about her, that $273 million in jewelry that was found in their property, and an awful lot of that is linked directly to her, because again, 101 East, the documentary series I have are those I was talking about, they have interviews with businessmen who said they met her regularly where she took jewelry bribes in return for government contracts.

So she was definitely involved in this.

Now she was sentenced in 2022 September to 10 years in prison and was fined $194 million, but she's still out on appeal.

And this is the sad thing about this.

The Razack's party, even though they lost in 2018, they're back in power now again.

And I would say there's every likelihood that Rosemary Mansoor won't get jail time.

And there's every likelihood that Razack will be pardoned and released, I would say sometime soon.

You would say to yourself, they must have some of this well salted away, but to brazenly have again brazen, that's a word we kind of start at the conversation, to brazenly have that wealth on show in your house, in a handbag, jewelry available.

It doesn't seem like they took any care to salt it away somewhere, or even flee the country.

No, this is the arrogance, I think, that is just so obvious.

They were untouchable.

They never ever saw the day where the police might raid their house.

They saw themselves as so above the law that they never, that's why I think he put 681 million directly into his account.

He just thought, but I can do whatever I want.

Who's going to question me?

Yeah, the arrogance was...

And this is a country, it's not a particularly rich or prosperous country necessarily.

So you would imagine there should have been a huge clamor and protests on the street at this time.

Well, I think from my reading of it, corruption is accepted in Malaysian society.

If you look at the documentary where Mary Angeli interviews businessmen, it was like, this is how you do business in Malaysia.

We mentioned earlier about Tim Leisner and how he was well suited to doing business in Malaysia, because there's a mixture of business and politics.

Where skimming and a bit of corruption is the norm.

But it was the size of this corruption that brought people out onto the streets.

But I think there is a very sad to say there's a resignation and acceptance within Malaysian society that corruption is part of doing business.

So it's a cost of doing business?

It's a cost of doing business, but there definitely was an awful lot of anger over the size, the amount of corruption.

Even the guy who came into power after Razak said, and he had been prime minister for 20 years or something before Razak came into power, he admitted that there was corruption when he was in government, but he was like, but it wasn't as bad as it was with Razak.

And you're kind of going, you can't have any, if you allow any bit of corruption become the norm, then it is, you're going to get to fight this.

Yeah, absolutely.

And then I guess just to bring it to a conclusion, as you're reading, as I was going towards the end of the book, I thought, okay, so the scales are starting to fall from people's eyes, and the reality of this sort of situation is becoming clear to everybody.

Prime Minister is under arrest.

Who captured Jo Lo?

That's the thing.

Jo Lo is still out there.

And apparently, according to your guys, who wrote The Billion Dollar Whale, they've traced an account to the British Virgin Islands that has $333 million in it, and they believe he owns that.

He's hiding in China, is that right?

I think so.

Although there's been rumors of him popping around.

I certainly won't be going to Malaysia in ARIA, I think, but there was rumors of him being in the Middle East as well.

Obviously, his kind of connections over there.

And then there was talk of him having a family, having kids.

So life is moving on for Jo Lo, but never caught.

Never caught.

And you know what you're saying?

He won't go back to Malaysia and Malaysia are saying, Oh, you know, they've got arrest warrants out for him.

They want him back.

But I think with Razak's party back in power, the last thing they want to spring Jo Lo back, because Jo Lo just has too much on them.

So I can't see Malaysia ever going out there and begging countries, Oh, please arrest Jo Lo if you see him.

They don't want him back at all.

So I think he's pretty much OK on that front.

But now the US Department of Justice have an arrest warrant out for him, so he can't go to the US, so he won't be able to see Paris Hilton anymore.

No more Vegas for Jo Lo.

No more Vegas, no more Vegas.

But I'm sure there's plenty of casinos over in the Far East that he'd be frequent.

Yeah, so he's still at large, and an awful lot of his cronies are with him, I believe.

Aren't they?

Like, they're still...

Yeah, I can't remember the guy's name.

Fatsulting.

This guy whose name was used in emails and who corresponded sort of indirectly.

Yeah, I think he's an incredible sort of character.

I wonder what the future will be like for him.

Are we likely to hear from him again?

I would say the next time we hear from him, he won't be in a good way.

That's for sure.

It will be something to do with 1MDB.

Maybe there are a lot of countries that are looking for him, and maybe he will fly into the wrong place sometime, and the US will be able to get their hands on him.

There might be something like that.

Or he goes legit, maybe?

I don't know.

Can he go legit?

I mean, he's in China now, and I believe that the Chinese aren't too keen for him to talk an awful lot about what kind of business he does over in China either.

I don't know.

I think, okay, he's got a lot of money, but I think his options are running out year by year.

And I don't know if it's going to go end well for Jo Lo, but you never know.

He's a smart guy, and he seems to have always stayed one step ahead.

And strangely, I was reading in Malaysia, he's actually become something of a cult hero because they think that he stayed one step ahead.

He stole all this money.

And when I was summing this up, I was saying, that's kind of the sad thing about this.

It's their money.

Yeah.

Only in a country where corruption is so endemic, because someone like Jo Lo, the guy who stole their money, is seen as a hero figure.

And also the fact that a guy is corrupt as Najib Razak, a guy who not only stole billions from the people of the country, but who also has a huge question mark over his possible involvement in the murder of a young woman.

Not only might this guy be released, but this guy could be prime minister again.

And I think it's really sad for Malaysia that the stink of corruption just seems to stay and permeate throughout their political and business life.

It's a tragedy.

It is.

It is.

An interesting story.

A great story.

And almost doesn't seem real.

I know.

I know.

I mean, you couldn't make it up.

No.

Make a great movie.

It would.

It would.

It would.

All right.

All right.

Good shot.

And it's your turn next time to come up with a story.

So I have one.

I have one.

I do.

But I'm not going to ruin it just yet.

Okay.

I'll talk to you.

You can tell me.

Perfect.

Cool.

Talk to you.

All right, Keith.

Take care.