1MDB
In July 2009, three months after becoming prime minister, Najib Razak launched the 1Malaysia Development Berhad (1MDB) sovereign wealth fund, intended to invest in energy, real estate, and other industries. 1MDB was set up with the help of Malaysian financier Jho Low to promote economic development. Najib chaired its advisory board until 2016. 1MDB raised billions of dollars in bonds for use in investment projects and joint ventures between 2009 and 2013. [Source: Reuters, December 8, 2021]
1MDB was wholly owned by the Minister of Finance. Originally established in 2008 as the Terengganu Investment Authority (TIA) to promote economic development in Terengganu state, it was taken over by the federal government in 2009 and renamed 1MDB, with the goal of expanding its benefits nationwide. The company invested in energy, real estate, and financial ventures, including joint ventures with PetroSaudi Holdings, Segregated Portfolio Company, and SRC Group. [Source: Wikipedia]
Najib Razak established 1MDB in 2009 as a way to manage resource-rich Malaysia's wealth with strategic investments. 1MDB’s investments, particularly the 1MDB-PetroSaudi joint venture, were marred by poor governance and lack of board approval for significant transactions, such as a $700 million transfer to a PetroSaudi subsidiary account. Subsequent deals, including Murabahah Notes and equity swaps with PetroSaudi subsidiaries, raised red flags due to the absence of risk assessments and knowledge of liabilities, yet proceeded under 1MDB management.
1MDB Corruption Scandal
By 2015, 1MDB had become the center of a major international corruption scandal. Evidence indicated large-scale fraud, money laundering, and misappropriation of funds, with the U.S. Department of Justice alleging at least $3.5 billion had been stolen from the state-owned fund. By 2020, the alleged misappropriated amount had risen to $4.5 billion, while Malaysia reported 1MDB debts totaling $7.8 billion. The scandal implicated former Prime Minister Najib Razak, contributing to his party’s defeat in the 2018 elections and his subsequent trial and imprisonment. [Source: Wikipedia; [Source: Reuters, December 8, 2021]
The U.S. Department of Justice (DoJ) said $4.5 billion was diverted to offshore bank accounts and shell companies, many linked to Low. Malaysian authorities say billions more remain unaccounted for. The siphoned funds were used to buy luxury assets and real estate for Low and his associates, including a private jet, a superyacht, hotels, jewelry, and to finance the 2013 Hollywood film "The Wolf of Wall Street", U.S. lawsuits have said. The scandal remains one of the largest cases of state-linked financial fraud, highlighting systemic governance failures and reshaping Malaysia’s political and financial landscape.
At least six countries, including Singapore and Switzerland, launched financial mismanagement and criminal investigations into 1MDB dealings, in a global probe that has implicated financial institutions and high-ranking officials worldwide. The U.S. Department of Justice recovered and returned $1.2 billion in misappropriated funds to Malaysia. Audits conducted after the 2018 change of government revealed 1MDB was insolvent, leading to the removal of CEO Arul Kanda Kandasamy and further investigations. In 2024, companies linked to 1MDB entered Chapter 15 bankruptcy proceedings to recover misappropriated assets.
1MDB-Related Charges Against Najib
Authorities said Najib illegally received more than $1 billion traceable to 1MDB. He faced 42 charges of criminal breach of trust, abuse of power and money laundering over losses at 1MDB and other state entities. Defence lawyers say Najib was misled by Low and other 1MDB officials, and that he believed the funds in his accounts were donations from the Saudi royal family.[Source: Reuters, December 8, 2021]
In 2020, in the first of five trials, Najib was sentenced to 12 years in prison and a $50 million fine after being found guilty of seven charges for illegally receiving $10 million from SRC International, a former 1MDB unit. Other trials he faces involve funds at 1MDB and other government bodies, as well as allegations of audit tampering. He pleaded not guilty to all charges. As of 2021 Najib remains on trial in four other cases.
In July 2016 the DoJ filed a civil lawsuit. "A number of corrupt officials," said then-US Attorney General Loretta Lynch, "treated this public trust as a personal bank account". The lawsuit named alleged perpetrators but left a "Malaysian Official 1" — later confirmed to be Najib — was alleged by US prosecutors to have received $681 million in stolen funds but to have returned most of it. Malaysian authorities cleared him of all wrongdoing while he was in office, but the tide has dramatically shifted since his party's shocking defeat in last year's general elections. Several of his residences were raided, and the police seized luxury goods and $28.6 million (£21.3 million) in cash. He is currently facing 42 charges for alleged corruption, money laundering, and abuse of power. He has pleaded not guilty to all charges and has maintained his innocence, even performing a soul ballad with a choir. [Source: By Heather Chen, Kevin Ponniah and Mayuri Mei Lin, BBC News, August 9, 2019]
According to the New York Mr. Najib explained that $681 million deposited in his personal bank account was a gift from a Saudi patron. In 2015, after Malaysia’s attorney general gathered evidence of Mr. Najib’s involvement in 1MDB and seemed poised to press charges, Mr. Najib fired him. Subsequent Malaysian government investigations cleared Mr. Najib of any wrongdoing.[Source: Hannah Beech, Richard C. Paddock and Alexandra Stevenson, New York Times, May 15, 2018]
Jho Low — the Central Figure in the 1MDB Scandal
Low Taek Jho, better known as Jho Low, was a central figure in the 1MDB scandal. Born in 1981 on bustling island of Penang into a wealthy Malaysian family, he graduated from the University of Pennsylvania in 2005. Low became a fugitive wanted by Interpol in 2016 for his alleged role in diverting over US$4.5 billion from 1MDB. Low has been charged in Malaysia and the United States and other countries. His whereabouts was unknown in 2021. According to investigative journalism outlet, Brazen, as of 2025, Low is allegedly living in Shanghai with a forged Australian passport under the name "Veis Constantinos Achilles". [Source: Wikipedia]
Low is reported to have benefited from numerous discretionary trust assets allegedly funded by 1MDB money. He has consistently maintained hisinnocence, claiming that Malaysian authorities have targeted him for political reasons due to his past support of former Prime Minister Najib Razak, who was later convicted on seven counts, including abuse of power, money laundering, and criminal breach of trust.
Originally a Malaysian citizen, Low also held citizenship in Saint Kitts and Nevis (2011–2019) and Cyprus (2015–2024), both of which were later revoked. Despite never holding a formal position with 1MDB, Jho Low is alleged to have played a crucial role in its activities. According to journalists Bradley Hope and Tom Wright in their 2018 best-seller Billion Dollar Whale, it was Low's savvy networking and shrewd business sense that allowed him to thrive. The book recounts Low's alleged exploits. "Jho Low is the most interesting person in the 1MDB affair, a mysterious master of ceremonies," Hope told the BBC. "It became clear very early on that he was the connecting point between everyone involved in the 1MDB fund and the only one with a 360-degree view of the multibillion-dollar scheme." [Source: By Heather Chen, Kevin Ponniah and Mayuri Mei Lin, BBC News, August 9, 2019]
Jho Low's Lavish Lifestyle
Investigators allege that Low used stolen 1MDB funds to support a lavish lifestyle in the United States, including the purchase of Hollywood properties (traced from $100 million of the PetroSaudi deal) and $40 million in New York apartments. According to the BBC: US prosecutors say Mr Low leveraged his powerful political connections to win business for 1MDB through the payment of hundreds of millions of dollars in bribes. Billions, they say, were laundered through the US financial system and used to buy some of the world's most expensive real estate, coveted artwork, and finance Hollywood films. [Source: By Heather Chen, Kevin Ponniah and Mayuri Mei Lin, BBC News, August 9, 2019]
This was a man known for mixing business with a great deal of pleasure. Lavish parties and high-profile friendships with Arab royalty and A-list celebrities fuelled his quick rise to the top. Britney Spears even popped out of his birthday cake at a 2012 Vegas bash. The reporters speculate in their book that at one point, Jho Low may have had access to more liquid cash than almost anyone else on earth. "Jho Low is driven but he is also both meticulous and terribly sloppy. He was frantically building an empire with money that wasn't his and in the end, his whole scheme became desperate and unsustainable," Hope said.
Low befriended Kasseem Dean (aka Swizz Beatz) and his wife Alicia Keys. They were once part of Jho Low's inner circle, often photographed at his notoriously swanky parties. Dean performed at Mr Low's infamous 31st birthday celebrations, where Britney Spears showed up in cake. The musician is also credited with introducing Mr Low to the moneyed art world, where he is alleged to have bought works including a Van Gogh drawing and two Monet paintings with 1MDB funds.
Another member of the famed inner circle was Paris Hilton.She reportedly met Mr Low in 2009. They were often seen together in paparazzi pictures (and selfies), partying it up around the world — from the gambling tables of Vegas to the ski slopes of Whistler and balmy Saint-Tropez. After a series of extravagant dates (including sailing around Europe for 10 days) Mr Low showered Miranda Kerr, one of the world's highest-paid supermodels, with out-of-this-world gifts: an acrylic, see-through grand piano (worth up to $1m) and an 11-carat diamond necklace and matching earrings. She has since turned over millions in jewellery to US prosecutors. Mr Low took Taiwanese singer Elva Hsiao on a million-dollar date to Dubai, where they dined on a private beach, according to Billion Dollar Whale.
According to the New York Times: The DoJ said $250 million went for a megayacht, complete with a helicopter pad and movie theater, built for Jho Low. Federal prosecutors said he used 1MDB funds to buy the actor Leonardo DiCaprio a $3.2 million Picasso painting for his birthday. The Australian model Miranda Kerr received $8 million in jewelry. (Both have since returned the gifts.) [Source: Hannah Beech, Richard C. Paddock and Alexandra Stevenson, New York Times, May 15, 2018]
Some of the misappropriated funds were funneled into Hollywood film production, notably through Red Granite Pictures, co-founded by Riza Aziz (Najib’s stepson) and Joey McFarland in 2010. DOJ investigations found that 1MDB money helped finance films including The Wolf of Wall Street, Daddy’s Home, and Dumb and Dumber To, with royalties from all three eventually seized by 2017. Low was even personally thanked in the credits of The Wolf of Wall Street. More broadly, investigators reported that over $4 billion from 1MDB was siphoned off by perpetrators and spent on art, diamonds, property, and other luxury items. While Riza Aziz later cooperated with authorities and returned some assets, Low remains a fugitive, accused of orchestrating one of the largest global financial frauds in recent history.
Birkin Bags and the Expensive Tastes of Najib’s Wife
Rosmah binti Mansor (born in 1951) is the second wife of the former Prime Minister of Malaysia, Najib Razak. Like her husband, she was implicated in the 1MDB scandal. On September 1, 2022, she was found guilty of corruption relating to a school electricity project. She was fined $303 million and sentenced to ten years in prison. On December 19, 2024, a Malaysian high court acquitted Rosmah Mansor of seventeen counts of money laundering and tax evasion due to insufficient evidence. [Source: Wikipedia]
Rosmah became notorious for her extravagant lifestyle during her husband tenure as prime minister. She amassed hundreds of high-end Hermes Birkin handbags, diamond jewelry, and luxury watches, drawing widespread scorn in Malaysia. Birkin bags alone can cost hundreds of thousands of dollars each. [Sources: Mei Mei Chu and A. Ananthalakshmi, Reuters September 1, 2022; AFP, February 24, 2015]
After Najib’s unexpected defeat in the 2018 elections police seized 12,000 pieces of jewelry, 567 luxury handbags, 423 watches, and $26 million in cash from properties linked to the couple. Among these was a $27 million pink diamond necklace, reportedly arranged by financier Jho Low, introduced to Najib by Riza Aziz, Rosmah’s son from her first marriage. Rosmah and Najib had married in 1987, both for the second time. The public anger grew as more details of 1MDB emerged. The Wall Street Journal reported that between 2008 and 2015 she spent at least $6 million on shopping sprees in London, New York, and elsewhere. The New York Times also documented millions of dollars spent on U.S. real estate and jewelry by those close to Najib, much of it benefiting Rosmah.
In 2018, police raids on properties linked to her and her husband made headlines as images circulated on social media of supermarket carts filled with over 500 luxury handbags, hundreds of watches, and 12,000 pieces of jewelry, reportedly worth up to $273 million. These images confirmed Malaysians' suspicions that their first family had been living extravagant lives. "She isn't rude, but she isn't particularly friendly or bubbly either. In person, she comes across as imperious," Reuters reported. "On days Rosmah Mansor is called in for questioning, there is a lot of interest in her outfits and bags." [Source: By Heather Chen, Kevin Ponniah and Mayuri Mei Lin, BBC News, August 9, 2019]
While Rosmah has not been charged in connection with 1MDB, U.S. and Malaysian authorities allege that luxury jewelry—including a $27 million pink diamond necklace—was purchased for her using funds misappropriated from the state-owned wealth fund. During her 2020 trial for soliciting bribes over a $279 million solar power project, she denied the charges, calling them character assassination. Authorities alleged that she sought 187.5 million ringgit ($41.85 million) in bribes and had already received 6.5 million ringgit in cash, partly delivered in two bags to her residence.
Bad Reputation and Influence of Najib’s Wife
Rosmah Mansor, 63, remains one of Malaysia’s most controversial public figures, often criticized as being disconnected from ordinary citizens struggling to make ends meet. Despite her lavish lifestyle, Rosmah came from humble beginnings. In her 2013 autobiography, she described financial struggles as a student and a meager salary in her first job at an agricultural bank. [Source: Mei Mei Chu and A. Ananthalakshmi, Reuters September 1, 2022; AFP, February 24, 2015]
Rosmah drew public ire in the mid 2010s when she reportedly lamented the 1,200 ringgit ($330) spent on hairstyling for her voluminous hair and 500 ringgit on tailored dresses. “We have to make beautiful clothes to attend functions, but the prices are way too high. For those who can afford it, it’s all right. But what about housewives like us, with no income?” she told the Malaysian Insider. Social media erupted with mockery, with one Twitter post reading, “I hope to become a poor housewife of a civil servant just like you, Rosmah.”
Although Rosmah held no official government position, prosecutors described her as wielding considerable influence due to her dominant personality. She wielded influence behind the scenes during Najib Razak’s premiership. In 2009, Singaporean statesman Lee Kuan Yew reportedly requested a meeting with her to understand the couple who “worked as a team.” Investigators later released a 2016 recording capturing Rosmah instructing Najib on handling aides and foreign officials amid the 1MDB scandal, urging him to take charge and manage his inner circle.
Goldman Sachs and the 1MDB Scandal
Timothy Leissner was a suave German banker who represented Goldman Sachs as the bank aggressively expanded into Asia. Following the 2008 financial crisis, Leissner’s deal-making in Southeast Asia, particularly in Malaysia, generated significant revenue for Goldman and propelled him to become the company’s regional chairman. [Source: By Heather Chen, Kevin Ponniah and Mayuri Mei Lin, BBC News, August 9, 2019]
His biggest deals, however, came after he crossed paths with Jho Low, the alleged mastermind behind 1MDB. Although Goldman had initially rejected Low as a client due to compliance concerns over the source of his funds, a U.S. indictment claims that Leissner and fellow banker Roger Ng leveraged Low’s powerful connections to secure business for the bank.
Goldman reportedly earned $600 million in fees for arranging and underwriting three bond sales that raised $6.5 billion for 1MDB in 2012 and 2013. Leissner later pleaded guilty in the U.S. to conspiring to launder money and violating anti-corruption laws by bribing foreign officials. Malaysia also filed charges against him, Ng, and 17 other current and former Goldman bankers, while the bank itself faced legal action.
Goldman Sachs denied any wrongdoing, labeling the Malaysian charges as “misdirected” and pledging to “vigorously defend” them. The bank characterized Leissner, who had been suspended in 2016, as acting independently and issued an apology for his conduct. The Malaysian government, however, rejected the apology and demanded $7.5 billion in reparations. Roger Ng, who left Goldman in 2014, denied all charges against him.
In 2020, U.S. firm Goldman Sachs agreed to pay more than $5 billion, including a record $2.9 billion in the United States, to settle investigations into its role in underwriting $6.5 billion in bond sales for 1MDB. [Source: Reuters, December 8, 2021]
1MDB Corruption Scandal Timeline
2015
January – 1MDB, struggling with rising debt, misses a loan payment of approximately $550 million.
March – Malaysia establishes a special task force—including officials from the central bank, police, anti-corruption agency, and Attorney General’s Chambers—to investigate 1MDB.
July – The Wall Street Journal reports that nearly $700 million of 1MDB funds were transferred into Najib’s personal bank account.
August – Malaysia’s anti-graft agency states the money in Najib’s account was a donation, not from 1MDB. Swiss authorities open criminal proceedings related to 1MDB, citing suspected corruption of foreign public officials, mismanagement of public funds, and money laundering. [Source: Reuters]
2016
January – Malaysia’s Attorney General clears Najib of wrongdoing, claiming the $681 million in his account was a donation from a Saudi royal and noting that Najib returned $620 million within months.
April – A Malaysian parliamentary inquiry criticizes 1MDB’s board for irresponsibility and calls for a probe into its former chief. The 1MDB board resigns.
July – The U.S. Department of Justice files civil lawsuits seeking to seize assets allegedly purchased with misappropriated 1MDB funds, claiming over $3.5 billion was siphoned. The lawsuits note that $681 million from a 2013 bond sale was transferred to “Malaysian Official 1,” later identified as Najib.
2017
March – Red Granite, producer of the 2013 film The Wolf of Wall Street, agrees to pay the U.S. government $60 million to settle a civil lawsuit linked to 1MDB funds.
June – The U.S. Justice Department reports that over $4.5 billion was misappropriated from 1MDB by top fund officials and their associates.
August – The U.S. Justice Department opens a criminal investigation into 1MDB.
December – The U.S. Attorney General describes the 1MDB scandal as “kleptocracy at its worst.”
2018
May – Najib unexpectedly loses the general election to Mahathir Mohamad, who immediately reopens the 1MDB investigation. Authorities bar Najib and his wife, Rosmah Mansor, from leaving the country; their properties are investigated, and Najib gives a statement to the anti-graft agency.
June – Mahathir announces that Malaysia is pursuing charges against Najib for embezzlement and bribery involving government funds, claiming investigators have an “almost perfect case.” Police report nearly $275 million in assets seized from Najib’s properties, including 12,000 pieces of jewelry, over 500 handbags, more than 400 watches, and nearly $30 million in cash. Bank accounts linked to Najib’s political party are frozen as part of the probe.
July – Authorities freeze more than 400 bank accounts, including those of 81 individuals and 55 companies allegedly receiving 1MDB funds. Najib is arrested.
Najib Sentenced to 12 Years in Jail in 1MDB Corruption Trial
In July 2020, Najib was sentenced to 12 years in prison after being found guilty on all seven counts in the first of the 1MDB-related corruption trials. The charges—including criminal breach of trust, money laundering, and abuse of power—centered on 42 million ringgit ($9–10 million) transferred from SRC International, a former unit of the state-owned 1MDB fund, into Najib’s personal accounts. Najib has consistently denied wrongdoing, claiming he was misled by financial advisers, particularly fugitive financier Jho Low, and believed the funds were donations from the Saudi royal family. [Source: BBC, July 28, 2020; Melissa Zhu, BBC News, August 23, 2022]
The Kuala Lumpur High Court ruled the evidence proved the case beyond a reasonable doubt, rejecting Najib’s appeals and challenges to the panel, including requests to remove the Chief Justice. The sentences—12 years for abuse of power and 10 years for each of six counts of money laundering and breach of trust—will run concurrently but remain suspended pending further appeal. Najib was also fined 210 million ringgit ($46.8 million).
Najib began serving his sentence in August 2022. The This case marked a historic moment in Southeast Asian politics, as it is rare for a former leader of Najib’s seniority to be jailed, breaking a long-standing norm of unaccountable political power in the region. Najib’s conviction sent shockwaves through Malaysia, contributing to the 2018 defeat of his UMNO party, which had governed the country for 61 years.
In August 2022, Malaysia's top court rejected Najib's appeal to set aside his conviction. As of January 2026 Najib was serving his sentence in Kajang Prison. Despite his conviction, Najib remained influential within UMNO, retained some popular support, and might seek a royal pardon.
Najib’s Wife Given 10 Years Prison Sentence Related to 1MDB
In September 2022, a Malaysian court sentenced Rosmah Mansor, the wife of former Prime Minister Najib Razak, to ten years in prison for seeking and receiving bribes in exchange for government contracts.The verdict came just days after her husband had been jailed for corruption. [Source: Reuters September 1, 2022]
Rosmah was also ordered to pay a fine of over $216 million for three bribery charges, with the judge at Kuala Lumpur High Court stating that the prosecution had proven its case beyond reasonable doubt. The judge granted her a stay of sentence, so Rosmah did not go to jail immediately. She was allowed to appeal the decision in two higher courts.
Tearfully, Rosmah addressed the judge after the verdict, saying, “Nobody saw me taking the money, nobody saw me counting the money… but if that’s the conclusion, I leave it to God.” The former first lady had been seen as a powerful figure behind Najib and was widely scorned in Malaysia for her extravagant lifestyle and penchant for luxury bags. Rosmah also faced multiple charges of corruption, money laundering, and tax evasion, and a separate case involving solar project case.
Image Sources: Wikimedia Commons
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Last updated January 2026