From the New York Times, the latest on a scandal with a bunch of iSteve-related angles:
By Matthew Goldstein, Alexandra Stevenson and Emily Flitter
Nov. 1, 2018
Goldman Sachs is facing one of the most significant scandals in its history, a multibillion-dollar international fraud that investigators say was masterminded by a flamboyant financier with a taste for Hollywood and carried out with help from the Wall Street firm’s bankers.
Federal prosecutors on Thursday unveiled a guilty plea from one former Goldman Sachs banker and announced bribery and money laundering charges against a second banker, as part of an investigation into the alleged embezzlement of billions of dollars from a state-run investment fund in Malaysia. Prosecutors also brought charges against the Malaysian businessman they believe stole some of the money: Jho Low, who spent millions of dollars on gifts to celebrities like the actor Leonardo DiCaprio and the model Miranda Kerr.
The money was used to buy a Picasso painting, diamond necklaces and Birkin bags as well as to pay for the Hollywood blockbuster “The Wolf of Wall Street.” Najib Razak, the Malaysian prime minister who established and oversaw the so-called sovereign wealth fund, lost his re-election bid over the scandal, in which American prosecutors said $731 million of the missing money was deposited into his own bank accounts.
The charges against senior employees of a major American bank, a rare move in the decade since the financial crisis, put enormous pressure on Goldman Sachs and its new chief executive, David M. Solomon. American prosecutors are continuing to investigate other bankers and Goldman itself, according to three people with knowledge of the matter.
I just finished reading the new book about Jho Low and his friends like DiCaprio and Jamie Foxx by the Wall Street Journal reporters, Tom Wright and Bradley Hope, who uncovered the 1MDB scandal: Billion Dollar Whale: The Man Who Fooled Wall Street, Hollywood, and the World.
Jho Low is a pudgy Chinese guy from Malaysia whose dad came up with a master plan of sending his calculating and ingratiating youngest son to the most expensive international schools such as Harrow and Wharton to party with the richest of the rich.
In England, Jho Low became pals with the stepson of the (now ex-) prime minister of Malaysia, Najib Razak, who is best known to Americans as the foreign dignitary whose press conference with Obama got hijacked by the topic of Donald Sterling and the LA Clippers. He recently got voted out of office over this scandal and replaced by his 92-year-old predecessor
Malaysia is one of the less over-populated countries in southeast Asia, so it seems a little more easygoing than most. Its permanent problems is that its Muslim majority, the bumiputras, aren’t all that bright or hard-working, so most of the money is handled by Overseas Chinese like Jho Low.
Jho Low, like more than a few Overseas Chinese in Southeast Asia, figured the easy road to riches was helping the native politicians embezzle from their citizenry. So he got control over a Malaysian sovereign wealth fund that he named 1MDB. My guess is that he came up with that name to make it look like IMDB, Internet Movie DataBase, because he’s a big movie fan.
Also, his go-to move for stealing zillions was to create phony companies with names very similar to real companies. For example, say there is a big investment fund in Abu Dhabi that Jho Low regularly dealt with called, say, AAABBBCCC LLC. Well, Jho Low would just start a firm in the Cayman Islands called AAABBBCCC LTD, because, like I’m always saying, who really reads all the way to the end of a name? And then Jho Low would have Malaysia’s 1MDB wire a few hundred million to AAABBBCCC LTD instead of to AAABBBCCC LLC like he normally did, figuring that the various bank compliance officers who glanced at the transaction wouldn’t notice the difference. This stupid scam worked more often than you might expect. (I’d tell you the real names of the firms involved, but Billion Dollar Whale doesn’t have an index, and I got tired of flipping through endless accounts of Jho Low’s parties in Vegas looking for an example.)
But his big brainstorm was: I give most of the money to the prime minister and just keep a percentage for himself? Why not give the Muslim prime minister the percentage and pocket the main billions for himself?
Or not exactly pocket it, since Jho Low loved to spend money on partying with American celebrities and buying trendy paintings like Basquiat’s Dustheads for $49 million. Jho Low also had his own rap producer, Swizz Beatz (the husband of Alicia Keys). When he bought a record company, he announced to Busta Rhymes, “I own you! You’re my bitch!”
I would have liked to see the authors of Billion Dollar Whale explain more about the economics of being a movie star. Movie actors aren’t paid quite as much these days as in their heyday in the 1990s, but DiCaprio isn’t hurting. Variety says:
Leonardo DiCaprio is worth $20 million in a crowd-pleaser like “Inception,” but he’s halving his salary for Quentin Tarantino’s “Once Upon a Time in Hollywood” in order to trigger a sprawling historical epic with dicey commercial prospects.
But these days there are a lot of ways to make money money as a movie star than making movies. For example, in 2013, Low bought another Basquiat for $9 million and gave it to Leonardo, who gave it up to the feds last year.
Billion Dollar Whale ought to make a pretty colorful Wolf of Wall Street-type of movie, although DiCaprio is enough of a power player that you’d have to be pretty brave to greenlight this project.
Maybe Leo’d want to play himself? I mean, it couldn’t hurt to ask. Well, actually it could hurt to ask.
But for some reason I didn’t like this book as much as Bad Blood by the WSJ’s John Carreyou about Theranos, which will star Jennifer Lawrence as Elizabeth Holmes.
Jho Low, the stereotypical Asian Guy Who Likes Rap, could be a pretty funny character on screen, but he doesn’t really come to life in print: