1MDB trial: Najib returned US$620m to firm that gave him US$681m ‘ill-gotten gains’, sent RM162m to his other account

KUALA LUMPUR, Oct 12 — Former prime minister Datuk Seri Najib Razak had received US$681 million (RM2.081 billion) in “ill-gotten gains” — which originally belonged to a 1Malaysia Development Berhad (1MDB) subsidiary — and had returned US$620 million (RM2.034 billion) within a few months, a police investigator told the High Court today.

ACP Foo Wei Min said that Najib had also sent about RM162 million linked to the same “ill-gotten gains” from his AmIslamic bank account (with the code name “AmPrivate Banking-MR”) to yet another of his AmIslamic bank accounts (with the code name “AmPrivate Banking-1MY”).

Foo said this while testifying as the 48th prosecution witness in Najib’s trial over the misappropriation of 1MDB’s RM2.28 billion, which were alleged to have entered the former finance minister’s two personal AmIslamic bank accounts “AmPrivate Banking-MR” and “AmPrivate Banking-1MY”.

Foo, the assistant director of the police’s Commercial Crime Investigation Department’s money laundering investigation division, today presented a flow chart he had prepared of the “usage of ill-gotten gains” by Najib’s “AmPrivate Banking-MR” account.

According to Foo, US$1.265 billion originating from 1MDB subsidiary 1MDB Global Investments Limited (1MDB GIL) reached the company Tanore Finance Corp’s Falcon Private Bank account in Singapore between March 21 and March 25, 2013.

Foo noted that Tanore Finance Corp’s owner is Tan Kim Loong. Tan is now known to be an associate of Malaysian fugitive Low Taek Jho, with the latter better known as Jho Low and described by the prosecution as being Najib’s alter ego and mirror image.

Foo described the 1MDB-originated funds which reached Tanore as being proceeds from unlawful activities, adding that Tanore then passed US$681 million (RM2.081 billion) in nine transactions to Najib’s AmPrivate Banking-MR between March 22, 2013 to April 10, 2013.

Out of the RM2.081 billion which Najib received, he then used RM22.649 million of the funds originally from the 1MDB unit by signing and issuing five cheques to five different recipients in just one week’s time from August 1 to August 7, 2013.

The five cheques using the unlawful funds were received by Umno (RM2 million), Umno’s Batu Kawan division (RM100,000), Tan Sri Lim Soon Peng (RM246,000), social media and publicity management firm ORB Solutions Sdn Bhd which managed Najib’s social media accounts and personal blog (RM2 million) and Semarak Konsortium Satu Sdn Bhd (RM303,000) which managed publicity and offered speechwriting services in English for Najib.

These five cheques issued from “AmPrivate Banking-MR” were banked in from August 2 to August 14, 2013.

According to Foo, Najib’s “AmPrivate Banking-MR” had “returned” money totalling RM2.034 billion (equivalent to US$620 million) to Tanore, saying Najib had in a July 30, 2013 authorisation letter gave instructions to AmBank to carry out the transfer after converting it to US dollars.

The money was transferred from “AmPrivate Banking-MR” to the same Tanore account which had received money belonging to 1MDB GIL and which had given the initial illegal funds of US$681 million to Najib’s account.

Foo added that Najib had on August 27, 2013 transferred RM150,000 to his new account “AmPrivate Banking-1MY”, and had on August 30, 2013 transferred the remaining RM12,436,711.87 to “AmPrivate Banking-1MY”.

With these two transfers to his new account “AmPrivate Banking-1MY”, Najib had cleared out his “AmPrivate Banking-MR” account which had zero funds left and had also closed this account on August 30, 2013.

The new account “AmPrivate Banking-1MY” had been opened just about a month ago on July 31, 2013, based on previous court evidence.

“As a result of investigations, First In First Out and supporting documents, I find that there was transfer out of unlawful funds — that are the proceeds of 1MDB at the Tanore stage which were received by Datuk Seri Najib — to abroad in five transactions between August 2, 2013 to August 23, 2013 totalling RM2,034,350,000 and there were two transactions of transfers of money from the same source to Najib’s new personal account on August 27, 2013 and August 30, 2013 totalling RM162,436,711.87,” Foo said.

ACP Foo Wei Min, the assistant director of the police’s Commercial Crime Investigation Department’s money laundering investigation division, today presented a flow chart he had prepared of the ‘usage of ill-gotten gains’ by Datuk Seri Najib Razak’s ‘AmPrivate Banking-MR’ account. — Picture by Sayuti Zainudin

Actual illegal transfers of RM1.897b and RM161m due to ‘FIFO’

When analysing how funds belonging to 1MDB’s subsidiary 1MDB GIL was allegedly illegally moved and laundered via Najib’s old account “AmPrivate Banking-MR”, Foo said he had used the “First In, First out (FIFO)” method which uses accounting techniques to calculate money inflows and outflows.

Under this method, an account holder would be given the benefit of doubt, as each transaction identified as involving illegal funds would be determined to be purely from illegal funds.

Foo explained that funds from other sources or funds that already existed in Najib’s “AmPrivate Banking-MR” account before Tanore’s US$681 million came in would be considered clean funds, while 1MDB-originated funds that came in from Tanore into the account would be considered illegal funds.

Under the FIFO method, Foo would deduct money flowing out of Najib’s account from the pre-existing funds until the pre-existing funds are fully used up. (These “clean” funds were fully used up by August 2, 2013).

It is only after the pre-existing funds have been used up or from August 2, 2013 onwards, that Foo would consider money flowing out of Najib’s account as using the US$681 million (RM2.081 billion) from Tanore. These included the RM22 million cheques, the US$620 million (RM2.034 billion) transfer out back to Tanore and the RM162 million to Najib’s new account “AmPrivate Banking-1MY”.

But using the FIFO method, Foo explained to the High Court that he would consider the total sum of illegal funds returned in five transactions by Najib’s old account “AmPrivate Banking-MR” to Tanore to actually be a total of RM1.897 billion, instead of RM2.034 billion (US$620 million).

This is because the FIFO method would result in the first transaction involving RM515.6 million in illegal funds instead of the RM652.6 million that was transferred.

As for the transfer of RM162 million to Najib’s new account “AmPrivate Banking-1MY”, Foo said the amount of illegal funds involved in those transactions is actually only about RM161 million, again due to FIFO calculations. This is because one of the transactions involve RM11.4 million in illegal funds instead of the full RM12.4 million sum transferred.

Foo, 48, graduated with a bachelor’s degree in economics from Universiti Kebangsaan Malaysia and has a master’s degree in Transnational Crime Prevention from the University of Wollongong, Australia.

Foo joined the police in 2001 and has been an investigator at the police’s money laundering investigation division since it was formed in 2005, and has investigated more than 50 investigation papers related to money laundering crimes in his 18 years at this division.

Najib was seen wearing a grey suit today.

Najib’s 1MDB trial before judge Datuk Collin Lawrence Sequerah is scheduled to resume next Wednesday, with Foo expected to continue testifying.

There are 10 other trial dates already scheduled for the 1MDB case for the rest of this year, namely October 19, October 24 to 26, November 6 to 9, and November 14 to 15.

Today, the High Court fixed 13 additional hearing dates for the 1MDB trial to be heard next year, namely January 2, 3, 5, 8, 24, 26, 29 and February 5, 6, 7, 9, 13 and 14.