Home Latest News A Trumped Up Pardon? Jho Low, 1MDB and Trump’s Pardon Process

A Trumped Up Pardon? Jho Low, 1MDB and Trump’s Pardon Process

What is the 1MDB scandal?

The 1MDB scandal is a multi-billion-dollar fraud involving Malaysia’s state investment fund, 1Malaysia Development Berhad (1MDB). US authorities allege that approximately $4.5 billion was misappropriated through a complex network of shell companies, offshore accounts and corrupt payments, with Malaysian financier Jho Low identified as a central figure.

Inside the $4.5bn Fraud

The Malaysian fugitive Jho Low, the “billion-dollar whale”, allegedly central to the USD 4.5 billion fraud on the state fund 1Malaysia Development Berhad (“1MDB”), is reportedly seeking a pardon from the US president, Donald Trump.[1]

The US Department of Justice (“DoJ”) website for the Office of the Pardon Attorney lists the request for “pardon after completion of sentence” as pending. [2] Low’s request brings one of the world’s largest financial frauds back into the spotlight 11 years after the scandal began to unfold. This article explains the fraud scheme, the central architects, the subsequent global investigation and legal fallout, and the key lessons learned from the scandal.

Who is Jho Low?

According to investigations, Low’s birth name is Low Taek Jho. He was born in 1981 to a wealthy Malaysian-Chinese family and grew up in Penang. He attended Harrow before graduating from University of Pennsylvania’s Wharton School in 2005.[3]

Whilst Low was a teenager, his family bought an apartment in Kensington Green. During family holidays in London, Low befriended Riza Aziz, a college student whose family also owned an apartment in the area. At the time, Riza’s stepfather, Najib Razak, was the Malaysian Defense Minister and would later go on to be elected as Prime Minister. Riza was Low’s entry into Malaysia’s political elite.[4]

What was 1MBD?

1MDB was established in 2009 by the Malaysian government under Prime Minister Najib Razak, with the stated goal of promoting national development through strategic investments. The fund borrowed heavily, raising billions of USD through bond issuances, including USD 6.5 billion arranged by Goldman Sachs. These funds were intended to finance infrastructure projects, energy investments, and real estate developments.[5] However, weak governance structures and concentrated political control created an environment ripe for abuse. Over time, mounting debts and opaque transactions triggered suspicions that the fund was being misused.[6]

How did the 1MDB fraud work?

Whilst Low did not have an official position at 1MDB[7] he consulted for the fund following the development of his relationship with Prime Minister Najib Razak, who was the Chairman of 1MDB. According to US prosecutors, Low’s trusted relationship with Prime Minister Najib Razak and other high-ranking government officials in Malaysia and Abu Dhabi was central to the scheme.[8]

US prosecutors state that the fraud occurred in at least four distinct phases:

Firstly, in 2009, under the pretence of investing in a joint venture, senior officials of 1MDB organised the fraudulent transfer of USD 1 billion.[9] According to a Public Accounts Committee report on the management of 1MDB, the joint venture was with PetroSaudi Holdings (Cayman) Ltd and 1MDB agreed to contribute USD 1 billion for a 40% holding in a BVI entity named 1MDB PetroSaudi Limited. However, only USD 300million was sent to the joint venture’s bank account. The remaining USD 700 million was paid to Good Star Limited. This was reported to 1MDB as the repayment of a loan originally made by PetroSaudi Holdings (Cayman) Ltd to the joint venture and Good Star Limited was a subsidiary of the PetroSaudi Group.[10] Good Star Limited was in fact a bearer-share company and its single share was held by Low, who was also signatory to its bank account.[11]

Secondly, in 2012, 1MDB officials and others misappropriated and fraudulently diverted a substantial portion of bond proceeds arranged by Goldman Sachs. The bonds were guaranteed by both 1MDB and the International Petroleum Investment Company (“IPIC”), an investment fund owned by the government of Abu Dhabi. 1MDB officials diverted approximately $1.367 billion of the amount raised to a Swiss bank account belonging to a BVI entity called Aabar Investments PJS Limited (“Aabar BVI”). Aabar BVI was named so to create the illusion that it was linked to Aabar Investments PJS (“Aabar”), a subsidiary of IPIC, but in reality, there was no link between Aabar BVI and either Aabar or IPIC. The funds diverted to Aabar BVI were sent to a bank account controlled by Eric Tan, an associate of Low. From there, funds were distributed for the benefit of individuals including officials at 1MDB, IPIC, and Aabar.

Thirdly, in 2013, proceeds from another bond offering arranged by Goldman Sachs were again diverted by individuals, including 1MDB officials. More than USD 1.26 billion of the USD 3 billion raised was diverted to a bank account held by Tanore Finance Corporation, for which Eric Tan was the recorded beneficial owner. These funds were used for the benefit of Low and officials at 1MDB.

Fourthly, in 2014, approximately USD 850 million was misappropriated under the pretence of paying Aabar to relinquish certain options it had been given in consideration of IPICs guarantee of the 2012 bonds. 1MDB borrowed USD 1.225 billion from a syndicate of banks to fund these payments to Aabar. However, officials from 1MDB and Aabar diverted USD 850 million to Aabar BVI, the same entity used for the fraud in 2012. A portion of the funds was used to create a Ponzi-like scheme to create the illusion that the PetroSaudi joint venture in 2009 had been profitable. Most of the funds however were used for Low’s personal benefit.

The proceeds of the four phases of the fraud, totalling c. USD 4.5 billion, were laundered globally, including through bank accounts in Singapore, Switzerland, Luxembourg, and the US.[12]

The Role of Jho Low in the scheme

As previously mentioned, Low did not have an official position in 1MDB but had developed close relationships with senior government officials in Malaysia, including Prime Minister Najib Razak. Low had also developed close relationships with senior government officials in Abu Dhabi, who had guaranteed the 1MDB bonds issued in 2012. These close relationships were central to the criminal scheme.

It is alleged in court filings that Low and others conspired to bribe government officials in Malaysia, including at 1MDB, and Abu Dhabi to issue and guarantee the bonds and to use Goldman Sachs on the three bond offerings in 2012 and 2013, for which Goldman Sachs allegedly received over USD 600 million in fees. From the proceeds of the bond offerings, millions of dollars were allegedly paid to government officials in these countries for their approval of the bond transactions. As well as paying bribes, Low diverted large portions of the bond proceeds to himself and his co-conspirators.[13] According to US prosecutors, Low took at least USD 1.4 billion for himself.[14]

The luxury assets purchased with 1MDB funds

Low transferred a significant proportion of the misappropriated funds into the US to spend on an extraordinary lifestyle. According to Billion Dollar Whale, between October 2009 and June 2010, Low and his entourage spent USD 85 million on alcohol, gambling in Las Vegas, renting private jets and superyachts, and paying celebrities to appear at parties with them. He purchased a hotel in Beverly Hills for USD 45 million as well as multi-million-dollar luxury homes in London, Los Angeles, and New York. He bought a private jet, spent USD 250 million on a yacht, purchased jewellery for celebrities and government officials worth tens of millions of dollars, accumulated an art collection worth USD 330 million and financed several Hollywood films, including The Wolf of Wall Street.[15] These conspicuous expenditures ultimately helped investigators trace the flow of funds.

Global Investigations and asset recovery efforts

The scandal triggered investigations in multiple jurisdictions, including the US, Malaysia, Switzerland, and Singapore.[16] Authorities pursued asset seizures globally, recovering billions in properties, artwork, and financial assets. The US alone has recovered or assisted in returning over USD 1.4 billion to Malaysia.[17]

Goldman Sachs and the 1MDB scandal

Goldman Sachs, which helped raise funds for 1MDB, faced intense scrutiny. In 2020, it agreed to pay more than USD 2.9 billion in global penalties to settle the US SEC’s charges for violating the Foreign Corrupt Practices Act (“FCPA”).[18] Criminal convictions were also obtained against individuals at Goldman Sachs. Ng Chong Hwa, also known as Roger Ng, a managing director of Goldman Sachs in Malaysia, was sentenced to 10 years in prison and to forfeit USD 35 million for conspiring to violate the FCPA and commit money laundering in connection with 1MDB.[19] Tim Leissner, the former Southeast Asia Chairman of Goldman Sachs plead guilty to charges of conspiring to launder money and conspiring to violate the FCPA by both paying bribes to various Malaysian and Abu Dhabi officials and circumventing the internal controls of Goldman Sachs. He was ordered to forfeit USD 43.7 million and shares worth USD 200 million because of his crimes.[20] He was also sentenced to two years in prison.[21]

What happened to Najib Razak?

Malaysian authorities say that Prime Minister Najib Razak illegally received more than USD 1 billion traceable to the 1MDB fraud. In July 2020 he was sentenced in Malaysia to 12 years in prison for criminal breach of trust, abuse of power, and money laundering. In 2025, he was sentenced to a further 15 years in prison for abuse of power and money laundering and fined USD 2.8 billion.[22]

The Eastern District of New York’s criminal indictment charged Low with conspiring to launder billions of dollars embezzled from 1MDB and conspiring to violate the FCPA by paying bribes to various Malaysian and Abu Dhabi officials. Low remains at large.[23]

What lessons can be learned from 1MDB?

The 1MDB scandal exposed:

Weak internal controls in state-owned enterprises
Political interference in financial institutions
Failures in corporate governance

It also highlighted vulnerabilities in:

Cross-border banking systems
Anti-money laundering enforcement
Due diligence among major financial institutions

In its aftermath, Malaysia and other jurisdictions have introduced stricter anti-corruption measures and regulatory reforms, though the case continues to serve as a reminder of what can go wrong if appropriate measures are not taken.

Conclusion

The story of Jho Low and 1MDB is more than a tale of corruption—it is a blueprint for how complex financial systems can be manipulated on a global scale.

From political power to international banking and high society, the scandal demonstrates how interconnected systems can enable wrongdoing when transparency and accountability fail.

Even today, with key figures convicted and billions recovered, the case remains unfinished—its central figure still at large, and its lessons still unfolding.

The 1MDB scandal serves as a benchmark case for the type of complex, multi-jurisdictional fraud matters in which Edmonds Marshall McMahon provides asset tracing, white-collar crime defence, dispute support, and investigative services.

Richard Freeman – Richard is a forensic accountant at Edmonds Marshall McMahon specialising in fraud investigations, asset-tracing and financial crime matters.

June 2026