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Billions of dollars in allegedly misappropriated funds. Millions spent on luxury handbags and jewelry. One hit movie, two mediocre comedies, a swanky New York condo, a $250 million yacht and a Picasso. Leonardo DiCaprio, Paris Hilton, Miranda Kerr and Lindsay Lohan.

It’s a scandal bursting with juicy details, celebrity cameos and webs of confusing information. On February 12, prosecutors in Malaysia will begin unraveling some of it when the country’s former Prime Minister Najib Razak appears in court on charges of abuse of power, criminal breach of trust and money laundering.

Other alleged players in the scandal – chief among them the international financier Jho Low – remain at large, out of the reach of Malaysian and US authorities.

Malaysian police show photos of goods -- including millions of dollars worth of jewelry and hand bags -- seized from the home of former Prime Minister Najib Razak.
Malaysian police show photos of goods -- including millions of dollars worth of jewelry and hand bags -- seized from the home of former Prime Minister Najib Razak.
PHOTO: MOHD RASFAN/AFP/AFP/Getty Images

Genesis of a scandal

In early 2009 Najib, weeks into his premiership, ordered the creation of a state investment fund initially worth $1.2 billion, which would later be renamed 1Malaysia Development Berhad, or 1MDB.

Its stated purpose was to lead “market-driven initiatives to assist the government in propelling Malaysia towards becoming a developed nation that is highly competitive, sustainable and inclusive.”

Instead, according to US prosecutors, 1MDB was used as a slush fund by Najib, Low and other high-ranking officials at the fund, who allegedly embezzled more than $3.5 billion over six years. Swiss prosecutors would later put that figure at over $4 billion.

“(These funds) were intended to grow the Malaysian economy and support the Malaysian people. Instead, they were stolen, laundered through American financial institutions and used to enrich a few officials and their associates,” said Attorney General Loretta Lynch in 2016, after the US Department of Justice launched a case against 1MDB.

From the beginning, those in charge of the fund were allegedly siphoning off cash for themselves and allies, misappropriating more than $1 billion in 2009 alone.

Both Low and Najib have repeatedly denied the charges laid against them. They accuse Malaysian authorities of pursuing a politically motivated prosecution.

Jho Low attends the 2014 Grammy Awards alongside producer Swizz Beatz and musician Alicia Keys. Low was chairman of EMI Music Publishing Asia at the time.
Jho Low attends the 2014 Grammy Awards alongside producer Swizz Beatz and musician Alicia Keys. Low was chairman of EMI Music Publishing Asia at the time.
PHOTO: Christopher Polk/Getty Images North America/Getty Images for NARAS

Celebrity hound

Born in Malaysia to a wealthy Malaysian Chinese family and educated in the UK and US, Low burst onto the international financial scene in the late 2000s thanks in part to a friendship with Najib’s stepson Riza Aziz, whom he met while they were at Britain’s elite Harrow School.

“Harrow had lots of children of prominent European, Asian and Middle Eastern families. That’s when I met the former King of Jordan’s son, among others,” Low told Malaysia’s The Star newspaper in 2010.

While studying at the Wharton Business School in Pennsylvania, Low launched an investment company with an initial capital injection of $25 million, which he said was “mainly provided by my family and close Middle Eastern and South-East Asian friends.”

By 2010, Low claimed, the value of his investments had grown to upwards of $1 billion. However, prosecutors allege the source of most of his money was the 1MDB fund.

In Malaysia and New York, where Low spent much of his time, the financier became a regular presence in gossip columns courtesy of friendships with celebrities including Hilton and Lohan. In the same Star interview, Low denied widely circulated reports that he had spent more than $2 million during a trip to St Tropez.

“I think there is a pattern of trying to paint me as this person who orders a lot of champagne excessively,” he said.

Through Aziz, who ran a Los Angeles-based movie production company called Red Granite Pictures, Low expanded his celebrity network, palling around with the likes of DiCaprio and former Victoria’s Secret model Kerr.

According to US prosecutors, Low laundered money from 1MDB through Red Granite, which used it to fund movies including “The Wolf of Wall Street,” “Dumb and Dumber To,” and “Daddy’s Home.”

“This is a case where life imitated art,” a US official said in 2016. “The associates of these corrupt 1MDB officials are alleged to have used some of the illicit proceeds of their fraud scheme to fund the production of ‘The Wolf of Wall Street,’ a movie about a corrupt stockbroker who tried to hide his own illicit profits in a perceived foreign safe haven.”

DiCaprio is working with US prosecutors to return any funds he or his charities received from 1MDB. Kerr has handed over jewelry worth $8.1 million which was given to her by Low to the Justice Department.

Screenshots from a US Department of Justice document listing assets owned by alleged 1MDB conspirators. This image has been modified for clarity.
Screenshots from a US Department of Justice document listing assets owned by alleged 1MDB conspirators. This image has been modified for clarity.

How it all came crashing down

In early 2015, Clare Rewcastle-Brown, a British journalist and founder of the Sarawak Report website which reports on corruption in Southeast Asia, received about 227,000 leaked documents relating to 1MDB.

After months of investigation, Rewcastle-Brown published a story alleging more than $700 million had been transferred from the fund to the personal bank accounts of Prime Minister Najib. The Wall Street Journal also published several groundbreaking reports on the scandal, based partly on the same leaked documents.

Following the reports, Malaysian officials raided 1MDB’s offices in Kuala Lumpur and investigations were also launched in Hong Kong, Australia, Singapore, Switzerland and the US. Najib told reporters the wrongdoers would be brought to justice.

However many observers were skeptical of Najib’s willingness to investigate the scandal thoroughly, given he was the main person implicated in it. In January 2016, Malaysia’s attorney general cleared Najib of any wrongdoing regarding the $700 million transfer, saying the money in his accounts had been freely given to the Prime Minister by the Saudi royal family.

Even as reporting on the scandal continued, and US authorities launched an investigation and began seizing assets in early 2017, it seemed unlikely Najib would face prosecution – he had an iron grip on Malaysian politics and had passed several laws seemingly designed to stymie discussion of 1MDB.

All that ended on May 9, 2018, when 92-year-old Mahathir Mohamad – a former prime minister and onetime ally of Najib – secured a shock general election victory.

As Malaysians celebrated in the streets, Najib was turfed out of office – the start of a dramatic fall from grace. In the weeks after the election, he and his wife, Rosmah Mansor, were barred from leaving the country and police raided the couple’s home, seizing millions of dollars’ worth of jewelry, handbags and other luxury goods.

In July 2018, Najib was formally charged with multiple counts of corruption and faces upwards of 20 years in jail if convicted. He accused the new government of pursuing a politically motivated prosecution but said he welcomed a trial as “my best opportunity to clear my name.”

Najib Razak seen at a press conference following his shock defeat in the Malaysia general election in May 2018.
Najib Razak seen at a press conference following his shock defeat in the Malaysia general election in May 2018.
PHOTO: Ulet Ifansasti/Getty Images AsiaPac/Getty Images

On February 12, that opportunity will present itself as Malaysia’s trial of the century begins.

Of the main alleged conspirators, however, only Najib will be in the dock. Low is believed to be hiding out in China, defying attempts by Malaysia to extradite him.

“Mr. Low will not submit to any jurisdiction where guilt has been predetermined by politics and there is no independent legal process,” said a statement on his website.

“It is clear that Mr. Low cannot get a fair trial in Malaysia, where the regime has proven numerous times that they have no interest in the rule of law.”