This article first appeared in The Edge Malaysia Weekly on March 21, 2022 - March 27, 2022

FAMILY members were made accessories in the receipt of kickbacks given out in the massive misappropriation of funds belonging to 1Malaysia Development Bhd (1MDB). Former Goldman Sachs banker Roger Ng Chong Hwa did the same, Federal Bureau of Investigation (FBI) agent Eric Van Dorn revealed in his testimony in Ng’s trial in a US court last week, according to court transcripts obtained by The Edge.

Van Dorn, a forensic accountant, testified on March 14 that transfers of ill-gotten gains were made to entities and accounts under Tan Kim Chin, Ng’s mother-in-law.

About US$35.1 million was transferred to the account of Silken Waters Victoria Square, whose beneficiary is Tan. This was effected through four separate transactions over 2012 and 2013 and stemmed from the first and third 1MDB bond deals, codenamed Project Magnolia and Catalyze by financier Low Taek Jho (Jho Low) and his partners in crime in Goldman Sachs. Under Project Magnolia, the US bank had helped 1MDB to raise US$1.75 billion to acquire power assets from tycoon Ananda Krishnan’s company Tanjong.

Silken Waters’ account at UBS, Singapore, was opened on May 24, 2012. Prosecutors pointed out that this was just days after Goldman transferred US$907.5 million from the first bond deal to 1MDB on May 21.

The account was for an entity — Silken Waters Enterprise Limited, registered in the British Virgin Islands in April 2012, and Tan is the beneficial owner. Silken Waters subsequently changed its name to Victoria Square Capital Ltd in July 2012.

According to a bank call report from a client contact dated May 22, 2012, Tan said that she was looking to transfer recent profits from equity investments from Switzerland to Asia.

Reading from the report, Van Dorn said: “Madam Tan explained that they have recently taken profits on her equity investments in Switzerland totalling about US$26 million. As such, they intend to transfer these funds back from (Swiss Bank) BSI to Asia, either Singapore or Hong Kong.”

The report stated that Tan was recommended by an existing client, her son Lim Chee Khang. Lim had also recommended UBS to his mother.

“As we come highly recommended by her son Chee Khang, she is meeting (UBS representative) today to assess us — instead of Credit Suisse Hong Kong.

“Madam Tan agreed to proceed with the account opening after the meeting … and will be in Singapore on May 23 to sign the account opening documentation,” Van Dorn read.

A total of US$24.4 million from Project Magnolia was transferred on two separate occasions to Silken Waters’ account in 2012.

Prior to that, US$35 million was transferred from Blackstone, an account “controlled or related to” Jho Low to Capital Place on June 11. Judy Chan, Tim Leissner’s ex-wife, is the beneficial owner of Capital Place.

On June 13, half of that sum — US$17.5 million — was transferred from Capital Place to Silken Waters.

A second round of Project Magnolia funds — US$16.9 million — was transferred to Capital Place on July 9. A week later, on July 16, US$6.9 million was transferred from Capital Place to Silken Waters.

Later in 2013, a total of US$10.7 million from Project Catalyze was transferred to Silken Waters’ account in two more transfers. On Sept 18, US$4.2 million was transferred from Capital Place, and on the same day, US$6.5 million was transferred from Chan’s Morgan Stanley account.

Under project Catalyze, Goldman had helped 1MDB’s real estate unit raise US$3 billion, ostensibly to fund the infrastructure development of the Tun Razak Exchange (TRX).

Earlier, Van Dorn agreed with prosecutor Alixandra Smith that transfers made through Chan’s Morgan Stanley account for a period of time were funds from Project Magnolia, Maximus (another US$1.75 billion raised to buy power assets from the Genting group) and Catalyze.

Van Dorn also confirmed that apart from the four transactions, there were no other deposits made to Silken Waters’ account.

Smith: In a review of the bank records for Silken Waters, were there deposits into this account from any outside sources other than these four transfers?

Van Dorn: No, there weren’t.

Asked if there were any agreements for these transfers to be made, Van Dorn said he found no documentation.

Smith: Did you ever see any agreement in the Capital Place documents documenting any transfer from Capital Place to Silken Waters?

Van Dorn: No, there were no documentations within the bank records.

The money transferred to Silken Waters was then funnelled through various other bank accounts that were either Tan’s bank accounts in UBS and Deutsche Bank or a joint bank account she held with her daughter, Ng’s wife Lim Hwee Bin, in OCBC Singapore and OCBC Malaysia.

The prosecution also highlighted the case of River Blue Investing Corp where Lim and Tan are listed as contact persons, while Ng is listed as an authorised person for the account. Ng was added as an authorised person to that account on July 1, 2014, after transfers were made to the account.

However, during cross-examination, defence attorney Jacob Kaplan pointed out that there was a transfer from OCBC Singapore to River Blue on June 28, 2013, almost a year before Ng became an “online” authorised person for the account.

Ng is the only Goldman Sachs Group Inc banker to be charged in the multibillion-dollar 1MDB scandal. His trial is ongoing in the US District Court, Eastern District of New York.

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