Former Malaysian Prime Minister Najib Razak was found guilty today on all 25 charges in his final trial related to the 1Malaysia Development Berhad scandal. The Kuala Lumpur High Court convicted Najib of abuse of power, criminal breach of trust, and money laundering for illegally transferring RM 2.3 billion (approximately $569 million) from 1MDB into his personal bank accounts.
The court sentenced Najib to 15 years in prison and imposed fines totalling RM 11.4 billion ($2.82 billion). This sentence runs consecutively to his earlier conviction in the SRC International case — a subsidiary of 1MDB — for which he received 12 years. Najib has been serving that sentence since August 2022, after Malaysia’s Federal Court upheld his conviction and rejected his final appeal.
The 1MDB scandal is among the largest cases of sovereign wealth fund theft ever documented. At least $4.5 billion was misappropriated from the fund between 2009 and 2015, during Najib’s tenure as both prime minister and chairman of 1MDB’s advisory board. The stolen funds were laundered through a global network spanning Switzerland, Singapore, Luxembourg, the United States, the United Arab Emirates, and the British Virgin Islands.
The money financed an extraordinary catalogue of luxury spending: a $250 million superyacht, high-end real estate in New York, London, and Beverly Hills, a $35 million Bombardier jet, and more than $200 million in fine art, including works by Monet and van Gogh. Approximately $100 million in 1MDB funds was used to finance the production of the Hollywood film The Wolf of Wall Street — a movie, ironically, about financial fraud.
The central figure in the laundering operation was Low Taek Jho, the Malaysian financier known as Jho Low, who orchestrated the movement of funds through shell companies and correspondent banking relationships. Low remains at large despite an Interpol Red Notice and is believed to be in mainland China. Malaysian authorities have repeatedly requested his extradition without success.
Goldman Sachs played a significant role in the scheme, raising $6.5 billion through three bond issuances for 1MDB in 2012 and 2013 while collecting approximately $600 million in fees — an extraordinary premium that reflected either the risk or the corruption embedded in the transactions. Goldman’s Malaysian subsidiary pleaded guilty to U.S. charges in 2020 and the bank paid $3.9 billion in global settlements, including $2.5 billion to the Malaysian government. Former Goldman partner Tim Leissner pleaded guilty to money laundering conspiracy and was sentenced in 2025.
A case study in state capture
The 1MDB case is not merely a financial crime. It is the definitive modern example of state capture — the systematic corruption of national institutions for private enrichment at a sovereign scale.
In my career, I have worked on cases involving state-owned entities, sovereign wealth funds, and the complex layering techniques used to move state assets into private hands. 1MDB stands apart from all of them in its scope, its brazenness, and the depth of institutional complicity required to sustain it for nearly a decade.
The most important feature of the case is that Najib was simultaneously the prime minister and the effective controller of the fund he was stealing from. This dual role meant that the normal institutional safeguards — board oversight, audit committees, regulatory scrutiny — were neutralised at source. When the person at the top of the government is also the person directing the fraud, there is no internal mechanism that can stop it. Only external pressure — journalistic investigation, foreign regulatory action, and ultimately a change of government — brought the scheme to light.
The banking failures are also significant. 1MDB could not have operated without the willing or negligent participation of major international financial institutions. Goldman Sachs earned $600 million in fees on three bond deals — a fee level so anomalous that it should have triggered immediate compliance scrutiny. Several Swiss and Singaporean banks were fined or shut down for facilitating 1MDB-related flows. Correspondent banks in New York processed billions in transfers that were layered through shell companies with no apparent commercial purpose. Each of these institutions had AML obligations. Each of them failed.
The Jho Low dimension remains unresolved. His continued fugitive status — and the widespread belief that he is sheltered in China — adds a geopolitical layer to the case. The ability of a wanted financial fugitive to evade international justice for nearly a decade, despite an Interpol Red Notice and the cooperation of multiple governments, illustrates the limits of the international law enforcement architecture when a powerful state chooses not to cooperate.
Today’s verdict brings a measure of accountability. But the $4.5 billion is not coming back. The superyacht has been sold and the proceeds repatriated, but the vast majority of the stolen funds are either spent, hidden, or held by individuals and entities beyond the reach of Malaysian courts. In the end, the people who bear the cost are Malaysian citizens, whose sovereign wealth was looted to fund a lifestyle of grotesque excess.
For those of us who work in financial crime, 1MDB should be a permanent case study — not just in how funds are stolen and laundered, but in how the global financial system, despite its elaborate compliance infrastructure, can still be used to facilitate sovereign-scale theft when the right combination of political power, banking greed, and regulatory indifference align.