The 1Malaysia Development Berhad scandal (1MDB scandal) is a corruption, bribery and money laundering conspiracy in which the Malaysian sovereign wealth fund 1Malaysia Development Berhad was systematically embezzled, with assets diverted globally by the perpetrators of the scheme. As of 2026, legal proceedings and asset recovery efforts are still ongoing.
Although it began in 2009 in Malaysia, the scandal's global scope implicated institutions and individuals in politics, banking, and entertainment, and led to criminal investigations in a number of nations. The 1MDB scandal has been described as "one of the world's greatest financial scandals" and declared by the United States Department of Justice (DOJ) as the "largest kleptocracy case to date" in 2016.
A 2015 document leak reported in The Edge, Sarawak Report, and The Wall Street Journal showed that Malaysia's then-Prime Minister Najib Razak had channeled over RM 2.67 billion (about US$700 million) into his personal bank accounts from 1MDB, a government-run strategic development company. The alleged mastermind of the scheme, Jho Low, was central in the movement of 1MDB funds internationally through shell companies and offshore bank accounts. As of 2018, the DOJ found that Low and other conspirators including officials from Malaysia, Saudi Arabia and the United Arab Emirates diverted more than US$4.5 billion from 1MDB.
In September 2020, the alleged amount stolen from 1MDB was estimated to be US$4.5 billion and a Malaysian government report listed 1MDB's outstanding debts to be at US$7.8 billion. The government has assumed 1MDB's debts, which include 30-year bonds due in 2039. In August 2021, the United States recovered and returned a total of US$1.2 billion of 1MDB funds misappropriated within its jurisdiction, joining countries such as Singapore and several others that have also initiated recovery or that have already repatriated smaller recovered amounts.
Background and key perpetrators
Najib Razak became Prime Minister of Malaysia in 2009. In his first year in office, he established 1Malaysia Development Berhad (1MDB), a sovereign wealth fund, which sought to make strategic investments and alleviate poverty, as part of his economic liberalisation policy and trademark 1Malaysia program. The fund had a budget of $1 billion to invest, with Najib having the sole authority to sign off investments and manage the personnel on its board and management team. His wife is Rosmah Mansor, whose son is Riza Aziz from a previous relationship.
Jho Low is a Malaysian businessman and financier from Penang. Despite not having a formal position at 1MDB, Low supported its establishment and was given extensive access to the fund due to high-profile political connections in Malaysia and the Middle East, and entertainment connections in the United States. Low joined high-level meetings and facilitated numerous deals.
Tim Leissner is a German banker who was chairman of the American investment bank Goldman Sachs in its Southeast Asia ventures. Leissner was credited with making lucrative deals for Goldman in the region after the 2008 financial crisis. The head of Goldman Sachs in Malaysia, Roger Ng, introduced Leissner to Jho Low. Leissner and Ng worked with Low and used his political connections to establish deals and orchestrate the scheme.
Scheme
The US DOJ described the scheme as involving three phases. In August 2009, Najib and Low met with representatives of the private oil company PetroSaudi on a yacht in Monaco to discuss 1MDB's first investment. This included Saudi royal Turki bin Abdullah Al Saud and Saudi national Tarek Obaid. During a subsequent visit to Saudi Arabia, Najib signed a $2.5 billion joint venture between PetroSaudi and 1MDB. The DOJ later said this was used as a "pretence" to move $1 billion into a Swiss bank account.
An additional $1.4 billion was then raised by Goldman Sachs in a bond issue and misappropriated into a bank account in Switzerland. An additional $1.3 billion from Goldman Sachs was also diverted into a bank account in Singapore. US authorities say that Goldman Sachs, particularly Roger Ng, were central in orchestrating the scheme, particularly the laundering of money from the fund, some of which was used to pay bribes to officials in Malaysia and the United Arab Emirates.
Use of funds
More than $4 billion was stolen from the 1MDB fund and spent by perpetrators on art, diamonds and property.
Low allegedly used 1MDB funds to support a lavish lifestyle in the United States. The DOJ traced $100m from the PetroSaudi deal to the purchase of properties in Hollywood and $40m to apartments in New York. He established friendships with musicians Swizz Beats, Alicia Keys and Pras, was pictured partying with socialite Paris Hilton, and used funds to purchase luxury items for model Miranda Kerr and singer Elva Hsiao, with whom he was romantically involved.
Hollywood film production company Red Granite Pictures, co-founded by Riza Aziz and Joey McFarland in 2010, also reportedly received misappropriated funds. The DOJ suggested these were put towards the production of The Wolf of Wall Street, Daddy's Home and Dumb and Dumber To, and by 2017 had seized royalties from all three films. Jho Low was personally thanked in the credits of The Wolf of Wall Street.
Malaysian investigations and actions
Change of auditors and transparency
The RM 425 million profit declared between 25 September 2009 and 31 March 2010 raised many criticisms and controversies about the lack of transparency in 1MDB's published accounts. Tony Pua, DAP Member of Parliament for Petaling Jaya Utara, questioned Najib, 1MDB's advisory board chairman, as to whether the figures were the result of an asset injection into 1MDB by the government such as the transfer of land rights to the company.
During the October 2010 parliamentary session, 1MDB explained that its accounts had been fully audited and signed off by KPMG, and closed as of 31 March 2010. Deloitte was involved in the valuation and analysis of the portfolio, while Ernst & Young provided tax advice for 1MDB.
1MDB eventually rang alarm bells by asking for a six-month extension on the filing of its annual report with the Companies Commission of Malaysia (CCM) due by 30 September 2013. At the same time, the change of three auditors since its inception in 2009 was considered suspicious. Responding to earlier criticism, CCM said that 1MDB had responded and lodged the necessary information, including registering an address, as required by law.
The Sungai Besi airport land transfer took place in June 2011 as a precedent for the development known as Bandar Malaysia, a mixed integrated project of commercial, residential, and hi-tech green environment. Prior to this, there had been questions in parliament by the opposition regarding the lack of progress on Bandar Malaysia even though 1MDB had already raised RM 3.5 billion in loans and Islamic bonds to fund the project and take ownership of the land. In April 2013, 1MDB finally awarded a RM 2.1 billion contract to Perbadanan Perwira Harta Malaysia (PPHM), a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT) to develop eight sites for the relocation of Pangkalan Udara Kuala Lumpur, the military base on the Sungai Besi land that was to be developed. The construction of Bandar Malaysia was set to commence following the completion of this relocation. As part of its debt rationalisation plan, on 31 December 2015, 1MDB signed an agreement with a consortium comprising Iskandar Waterfront Holdings and China Railway Engineering Corporation to sell 60% of its stake in Bandar Malaysia Sdn Bhd. However, this deal eventually fell through.
On 7 September 2015, a member of the board of advisors to 1MDB, Abdul Samad Alias, resigned stating that he did so after many of his requests for information on 1MDB affairs were ignored. 1MDB subsequently denied receiving repeated requests from Abdul Samad, stating that its president, Arul Kanda, had personally met Abdul Samad in January and March of that year to "discuss the company's affairs".
1MDB had not had a proper external accounts audit since 2013, partly as a result of Deloitte Malaysia, their auditors at the start of that period, issuing a statement in July 2016 saying that their audit reports of 1MDB financial statements, dated 28 March 2014 and 5 November 2014 covering financial years 2013 and 2014 respectively, should no longer be relied upon. By early March 2015, with public discontent growing at the perceived lack of financial transparency at 1MDB, the Prime Minister, who was also the Chairman of 1MDB's Board of Advisors, ordered the Auditor General of Malaysia to carry out an audit of 1MDB. However, on completion of the audit, the final report was classified as an Official Secret and only made available to the Public Accounts Committee (PAC) tasked to investigate improprieties at 1MDB. Purported copies of the report however surfaced on the internet. After Najib's ouster in the 2018 general election, the much-leaked audit report was declassified by the new government on 12 May 2018.
In May 2018, after the formation of the new Cabinet following Pakatan Harapan's victory in the General Elections, Finance Minister Lim Guan Eng ordered the appointment of PricewaterhouseCoopers (PwC) to conduct a special position audit and review of 1MDB.
The Malaysian Conference of Rulers called for a prompt investigation of the scandal, saying that it was causing a crisis of confidence in Malaysia.
1MDB lawsuit against Amicorp Group for alleged fraud
On 20 December 2024 the Malaysian state fund initiated legal proceedings against Amicorp Group and its CEO, Toine Knipping. The lawsuit, filed in the British Virgin Islands, seeks over $1 billion in damages for alleged fraud. 1MDB claims that Amicorp, a Hong Kong-based corporate services provider, helped facilitate fraudulent transactions exceeding $7 billion between 2009 and 2014. The fund alleges that Amicorp orchestrated a sophisticated scheme involving numerous shell companies, fake transactions, and deceptive financial arrangements that concealed the actual source and flow of misappropriated funds. According to the lawsuit, the misappropriated assets were allegedly funneled through various locations, including Barbados, Curaçao, Hong Kong, and the British Virgin Islands. 1MDB asserts that Amicorp granted access to the international financial system, enabling fund entities and banking services to perpetuate the cycling of assets. This created an illusion that 1MDB's investments were generating returns when, in reality, they had been misappropriated.
In response to the allegations, Amicorp Group denied any wrongdoing and stated its intention to dispute the $1 billion legal claim. The company maintains that the claim is inaccurate and that it will be left to the British Virgin Islands Court of Justice to assess the suit.
Debts and rating downgrade
It was reported that by early 2015, 1MDB had accumulated debts of nearly RM 42 billion. Further alleged financial challenges caused 1MDB bonds to trade at a record low. Additionally, the Malaysian cabinet rejected a requested RM 3 billion cash injection by 1MDB, narrowing its options to pay off its debts on time.
Donation explanation from the government
On 3 August 2015, the MACC stated that the RM 2.6 billion that had been banked into Najib's personal account came from donors, not 1MDB, but did not elaborate on who the donors were or why the funds were transferred, nor why this explanation had taken so long to emerge since the allegations were first made on 2 July 2015. UMNO Kuantan division chief Wan Adnan Wan Mamat later claimed that the RM 2.6 billion was from Saudi Arabia as thanks for fighting ISIS. He further claimed that the Muslim community in the Philippines as well as southern Thailand had also received similar donations, and that since the donations were made to Najib personally as opposed to UMNO, the funds were deposited into Najib's personal accounts.
Saudi Foreign Minister Adel al-Jubeir said he was aware of the donation, and said that it was a genuine donation with nothing expected in return. Attorney-general Mohamad Apandi Ali has said that the donation was from one of the sons of the late Saudi King Abdullah, namely Turki bin Abdullah Al Saud. In an interview with ABC News, WSJ finance editor Ken Brown stated that the money did not come from the Saudis and they had evidence that it came from companies related to 1MDB.
Bank Negara actions
Using the premise that 1MDB had used inaccurate or incomplete disclosure of information, Bank Negara, in early 2016, revoked permissions previously granted to 1MDB for investments abroad totalling $1.83 billion. Bank Negara then called for the Attorney General to begin criminal prosecution of 1MDB after completing its own investigations into 1MDB fund transfers. 1MDB responded that they were unable to repatriate the $1.83 billion demanded by Bank Negara because the funds had already been utilized.