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Singapore starts first trial in 1MDB scandal with banker who ‘pocketed $26 million’

by October 31, 2016 General

A former private banker went on trial in Singapore on Monday in the first prosecution of suspects linked to a massive international money-laundering scandal centred on Malaysian state fund 1MDB.

State prosecutors described the sums involved as “staggering”.

They said Singaporean Yeo Jiawei, 33, an ex-wealth manager at Swiss bank BSI, was “one of the main Singapore-based suspects” in the scandal, which is also being investigated by Switzerland and the United States.

Allegations that billions of dollars were misappropriated from 1MDB have triggered a scandal in neighbouring Malaysia that has embroiled Prime Minister Najib Razak.

Both Najib, who founded the fund, and 1MDB have strongly denied any wrongdoing.

Singapore, a regional financial hub, last year launched a probe into alleged illicit fund flows linked to 1MDB and closed down the local branches of two Swiss banks – BSI and Falcon Private Bank – involved in the scheme.

Singapore authorities also seized nearly $180 million in assets.

Half of the assets were linked to Low Taek Jho – known as Jho Low – a jet-setting Malaysian financier who helped set up 1MDB and played a key role in its decisions.

Low, who has also denied any wrongdoing, is a close Najib family friend.

Yeo, the former BSI banker, faces 11 charges including money-laundering, cheating, forgery and obstructing the course of justice.

The current trial, expected to last until November 14, will centre on four charges accusing Yeo of “intentionally” obstructing justice in relation to Singapore’s money-laundering probe.

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Deputy Public Prosecutor Tan Kiat Pheng described Yeo, 33 as “one of the main Singapore-based suspects in this massive money laundering case.” He said Yeo allegedly pocketed SGD$26 million (US$18.7 million) in the process.

Prosecutors said Yeo approached various individuals while under investigation and instructed them to lie to the authorities or destroy evidence.

In a written statement issued at the trial, prosecutors said the 1MDB-related probe “is by far the most complex, sophisticated and largest money-laundering case” ever handled by the Commercial Affairs Department, the city-state’s main white-collar crime investigation body.

They said it involves multiple companies, persons and financial institutions and the movement of “staggering amounts of money across jurisdictions over the course of several years”.

In July the US Justice Department filed lawsuits in the United States alleging a massive international conspiracy by Najib’s relatives and associates to steal billions from 1MDB.

US authorities moved to seize assets including real estate in Beverly Hills, New York and London, artworks by Monet and Van Gogh, a Bombardier jet, and corporate ownership stakes which they allege were purchased with stolen 1MDB money.

Swiss Financial Market Supervisory Authority FINMA said in October that during its investigation from 2012 to 2015, it found that “assets amounting to approximately $3.8 billion were transferred to accounts at Falcon and associated with the 1MDB Group”.

Najib is currently on a state visit to Beijing. China came to Najib’s rescue last year with a US$2.3 billion deal to buy assets of 1MDB. The infusion of cash helped ease Najib’s concerns over the firm’s mounting debts.

Additional reporting by Associated Press