Every year The Man From FCPA thinks that corruption scandals cannot get any bigger or worse. Consider the following: 2012 Wal-Mart; 2013-GSK in China; 2014-Petrobras; 2015 (spring) FIFA; 2015 (fall VW); now in 2016 we have the alleged looting of the Malaysian sovereign wealth fund, 1MDB. The scandal has certainly crossed the globe with all its twists turns and permutations. Of all of the above scandals, only GSK went to trial and that trial was a one-day trial, held in secret in China, where a sentence was ‘delivered’ and later announced to the world.
However there is which has begun in Singapore on a portion of the massive 1MDB scandal, which may well begin to shed light on the massive fraud and theft. As reported by the Wall Street Journal, the private banker, Yeo Jiawei, who managed the fund’s accounts in Singapore faces “four charges of attempting to pervert the course of justice”. He faces other charges of money-laundering and forgery at a later date.
Jiawei worked at the Singapore branch of the now defunct Swiss bank BSI SA as a wealth manager. He is alleged to have facilitated the money-laundering and bribery for those who are alleged to have looted the fund of more than $4bn. In his opening statement, the Singaporean prosecutor said the investigation was “by far the most complex, sophisticated and largest money-laundering case” ever handled by Singaporean authorities.
While it may seem like Jaiwei is only a bit player in this worldwide scandal, his role may well turn out to be pivotal. A well-known law enforcement tactic is to arrest and prosecute lower-level functionaries in a criminal matter and get them to flip on the way up to the top perpetrators. However this tactic is rarely seen in a truly worldwide bribery and corruption scandal as there are usually too many enforcement authorities with too many divergent interests. 1MDB may be the first corruption scandal to change this.