The United States Justice Department on Wednesday struck a deal with fugitive financier Jho Low to recover almost US$1 billion allegedly pilfered from the 1Malaysia Development Berhad (1MDB) state investment fund.

The 1MDB global corruption scandal, believed to be among the largest heists in financial history, contributed to the fall of former Malaysian Prime Minister Najib Razak’s government. The former premier is currently in the dock on various related fraud charges and could face life in prison if fully convicted.

The scandal has also implicated US investment bank Goldman Sachs, Germany’s Deutsche Bank and a United Arab Emirates investment fund for raising capital and doing deals with the mismanaged fund.

The massive fraud has spurred investigations across the globe including in Singapore, Switzerland and the United States. The Malaysian government, meanwhile, is pressing Goldman Sachs for a multi-billion dollar settlement for its role in arranging three bond issuances that raised $6.5 billion for the fund.

Malaysian prosecutors in August filed criminal charges implicating 17 current and former directors of Goldman Sachs. The US investment bank has maintained that its role was limited to a couple of rogue employees but Malaysian prosecutors claim knowledge of the alleged fraud went to the very top of the bank’s management.

Malaysia is seeking a whopping $7.5 billion from Goldman Sachs in damages, though reports indicate they could settle for less than half that amount through behind-the-scenes negotiations.

1MDB logo pictured on a bus window in Kuala Lumpur, February 17, 2017. Photo: AFP via NurPhoto/Chris Jung

Goldman Sachs has consistently denied that its role in the fraud was institutional in nature, arguing that a few unscrupulous executives circumvented the bank’s internal controls.

The proposed settlement with Jho Low, which does not include an admission of guilt or wrongdoing, was filed on Wednesday in a California court, according to news reports. It is not clear if the pending deal will drop still-pending criminal charges against Low in the US.

Low has maintained his innocence and has pursued defamation charges against outlets that have claimed he was the mastermind of the fraud. He has been seen in Macau and is believed to be residing in China, though its unclear if with official knowledge.

Reports have suggested China helped to keep the fund afloat through rich infrastructure deals with Najib’s government that the current Mahathir Mohamad administration has scotched.

The Jho Low deal, if approved by a US federal judge, would help resolve forfeiture cases tied to financial, who prosecutors say orchestrated the theft of $4.5 billion from 1MDB that was funneled into buying a private jet, a super-yacht, mansions, luxury jewelry, fine art and even Hollywood movie productions.

Low has apparently agreed to forfeit high-end real estate he holds in Beverly Hills, California, New York and London and other business investments amounting to some $700 million, the Justice Department statement said.

Malaysian businessman Jho Low with US actor Leonardo DiCaprio. Photo: Twitter
Malaysian businessman Jho Low with US actor and Wolf of Wall Street star Leonardo DiCaprio. Photo: Twitter

Jho Low had already forfeited a yacht reportedly worth $120 million and now in possession of the Malaysian state, and $140 million in other assets before yesterday’s announcement.

The proposed settlement also includes assets he holds in the United Kingdom and Switzerland, the statement said. If concluded, the settlement will represent the largest civil forfeiture of assets ever notched by the US Justice Department, the same statement said.

“I am very pleased to confirm that a landmark comprehensive, global settlement has been reached with the United States government,” Low said in an emailed statement reported by Reuters.

It was still unclear if Jho Low must appear in a US court for the settlement to be approved and finalized.

This dispatch draws on news agency reports