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A Swiss bank executive in Singapore has become the first western national to face criminal prosecution over the suspected looting of billions of dollars from Malaysia’s 1MDB state investment fund, Financial Times reported earlier today.
Jens Sturzenegger, former head of Falcon Private Bank’s Singapore branch, will plead guilty to some of a 16-count charge sheet related mainly to the alleged falsification or withholding of information, his lawyer told a court hearing in the city state on Thursday.
The affair triggered a political crisis in Malaysia and embroiled Najib Razak, the prime minister, who has denied any wrongdoing.
Sturzenegger, who was arrested in October, is charged with offences related to alleged money transfers totalling more than $1.25bn. Tan Hee Joek, Sturzenegger’s lawyer, said his client planned to admit guilt, although he did not say to which charges.
The 42-year-old Swiss banker is accused of lying to authorities by denying that several Falcon bank accounts were linked to Taek Jho Low, a high-profile Malaysian businessman and socialite. Low is close to Najib and is accused by US authorities of being a main architect of the laundering of 1MDB funds.
Low has previously denied any wrongdoing. He has not been charged with any offence. Falcon, which is owned by Abu Dhabi’s state International Petroleum Investment Company, has emerged as a central player in the 1MDB case. In October it was fined by Swiss authorities and shut down in Singapore for allegedly processing almost $4bn linked to 1MDB.
Sturzenegger is accused in the Singapore case of failing to report a suspicious transfer of $378m in March 2013 from a Falcon account held by Granton Property Holding to a company named Dragon Market.
Sturzenegger also failed to report a suspicious $9.19m transfer to a company named Helly Nahmad Gallery Inc. The US lawsuit does not name the gallery but alleges that Mr Low and others used 1MDB money to buy more than $130m of artworks, including two paintings by Claude Monet and one by Vincent van Gogh. Helly Nahmad Gallery Inc could not immediately be reached for comment.
Falcon bank has come under further scrutiny after Swiss authorities accused it of failing to adequately investigate the commercial background of $681m of “pass-through transactions” in 2013 and the return six months later of $620m. The $681m is the exact amount of mysterious payments made at that time to Mr Najib, who chaired 1MDB’s advisory board.
Malaysia’s attorney-general has said the money sent to Mr Najib’s personal bank accounts was a gift from the Saudi Arabian royal family.
Falcon declined to comment other than to confirm Mr Sturzenegger was a “former employee”.