How Low Can Jho Go?

On November 30, two actions in the U.S. District Court for the District of Columbia indicate that the U.S. Department of Justice has been actively pursuing a troubling dimension of the extensive efforts by Malaysian billionaire Jho Low to evade prosecution for his role in the 1MDB scandal.  Not content with allegedly conspiring to bribe Malaysian and Abu Dhabian government officials to obtain and retain business and conspiring to launder the proceedings of that conduct, and fleeing Malaysia for Hong Kong, Macau, and parts unknown, the filing indicate that Low sought to use laundered funds to support lobbying efforts in the United States to influence the Department’s investigations of him.

First, the U.S. Department of Justice announced the filing of a civil forfeiture action, seeking to recover more than $73 million in funds that the Department stated were connected with billions of dollars embezzled from 1MDB that Low and others allegedly conspired to launder.  The Department also alleged, consistent with the indictment returned against Low and another individual last month, that Low and others paid hundreds of millions of dollars in foreign-official bribes.   The forfeiture complaint alleged that Prakazrel (“Pras”) Michel, a noted rapper and record producer – with the assistance of George Higginbotham, a senior Justice Department congressional affairs specialist until August 2018  — opened multiple bank accounts at U.S. financial institutions in 2017 to receive tens of millions of dollars in funds from overseas accounts controlled by Low.

The purpose of those funds was “to pay individuals to lobby high-level U.S. government officials to influence, inter alia, an ongoing U.S. Department of Justice (DOJ) criminal investigation of JHO LOW and related civil forfeiture proceedings over numerous of JHO LOW’s assets.”  In opening these accounts, Michel and Higginbotham allegedly made false and misleading statements to U.S. financial institutions that housed the accounts in order to mislead these institutions about the source of the funds and to obscure Low’s involvement in these transactions.

Second, Higginbotham entered a plea of guilty to one count of conspiracy to make false statements to a bank, relating to his helping to facilitate the transfer of tens of millions of dollars for Low’s lobbying campaign.  Higginbotham admitted “that the foreign principal behind the lobbying campaign was alleged to be the primary architect of the 1MDB scheme,” and

that another purpose of the lobbying campaign was an attempt to persuade high-level U.S. government officials to have a separate foreign national, who was residing in the United States on a temporary visa at the time, removed from the United States and sent back to his country of origin.

Finally, he also admitted that in order to conceal Low’s identity he conspired to make false statements to U.S. financial institutions concerning the source and purpose of the funds, and that he worked “on various fake loan and consulting documents in order to deceive banks and other regulators about the true source and purpose of the money.”

Note: Although the Wall Street Journal first disclosed the existence and general dimensions of these lobbying efforts in March 2018, these filings indicate more specifically the extent to which those efforts were intertwined with Low’s broader array of alleged federal crimes.  The Justice Department has sought to dispel potential concern that those efforts had any effect on the Department or its investigations.  In the forfeiture complaint, the Department stated categorically that “HIGGINBOTHAM, who was employed at DOJ in a non-lawyer position, was not involved in any way in the DOJ’s investigation of JHO LOW and failed to influence any aspect of DOJ’s investigation of 1MDB and JHO LOW.”  Still, many current and former Justice Department officials and employees must be dismayed, even angered, that any Justice Department employee would consider it appropriate to assist a known target of civil and criminal investigations by the Department in attempting to use political influence to interfere with the pursuit of those investigations.

As for Michel, the Department to date has not announced any civil or criminal charges against him personally pertaining to 1MDB or Low.  Nonetheless, Higginbotham’s plea and the forfeiture complaint – which includes allegations such as “MICHEL knew that JHO LOW was toxic to U.S. banks and that U.S. banks did not want to deal with him or accept JHO LOW’s funds” – provide reasons to believe that Michel, like Low, at the least may be losing his equanimity.