Ex-US official admits charges linked to Malaysian scandal
WASHINGTON (AP) — A former Justice Department official admitted his role Friday in a multimillion-dollar effort to try to get the United States to drop its investigation into a money laundering and bribery scheme that pilfered billions from a Malaysian investment fund.
George Higginbotham’s guilty plea in federal court in Washington marked the first public acknowledgement of a secret attempt to pressure American officials to drop their probe of the fund known as 1MDB.
The massive corruption investigation, which upended Malaysian politics, spanned the globe with the money from the fund gambled in Las Vegas, spent on diamond jewelry and a luxury yacht and used to finance the “Wolf of Wall Street” and other Hollywood productions. The long-ruling coalition in Malaysia was ousted in a May election, and then-Prime Minister Najib Razak, who set up the fund, now faces criminal charges there.
Prosecutors say Higginbotham, who worked on the congressional affairs staff in the Justice Department’s Office of Justice Programs, helped open bank accounts and created false loan documents for shell companies to pay an influential person to pressure officials to drop their probe. That person’s identity wasn’t revealed in court.
Authorities allege that Higginbotham’s efforts were also meant to conceal the involvement of an unidentified co-conspirator, who prosecutors say was an architect of 1MDB and because of that, banks wouldn’t do business with him directly. Higginbotham admitted in court that bank accounts and shell companies were set up in 2017 because the influential person didn’t want to be directly tied to the co-conspirator.
Higginbotham falsely claimed in emails to banks that the money was being used to fund entertainment ventures and failed to disclose that it was, in fact, being used to finance the lobbying effort to shut down the 1MDB investigation, prosecutors said.
Higginbotham also traveled to a foreign country to meet with that co-conspirator and was ultimately paid $70,000 for his involvement, authorities said. Higginbotham would not answer questions as he left court Friday.
Authorities say Higginbotham was also part of an effort to try to have a foreign national, who had been critical of his home country and was in the U.S. on a visa, thrown out of America and sent back to his nation of origin. Prosecutors charge that Higginbotham met with the ambassador of that country — which wasn’t identified — and told them he was acting personally and not on behalf of the Justice Department, but that the U.S. government was working on expelling the person.
Higginbotham told the judge that $41 million placed in an escrow account was supposed to be paid out to the politically connected person once the foreign national was removed from the U.S.
U.S. District Judge Colleen Kollar-Kotelly said Higginbotham likely faced a sentence of up to 16 months in federal prison, but said he could also face no jail time. As part of a plea deal, Higginbotham has agreed to testify before grand juries and speak to federal investigators.
Higginbotham pleaded guilty to a charge of conspiracy to make false statements to a bank and was released without bail on Friday. He is due back in court in March.
As part of the 1MDB investigation, the Justice Department on Nov. 1 announced criminal charges against a well-connected fugitive Malaysian financier and two former Goldman Sachs bankers, accusing them in a money laundering and bribery scheme that pilfered billions of dollars from the fund. In 2016, the Justice Department moved to recover more than $1 billion that it said had been stolen, filing a civil complaint that sought the forfeiture of property, including a Manhattan penthouse, a Beverly Hills mansion, a luxury jet and paintings by Vincent Van Gogh and Claude Monet.
The charges against Higginbotham were first reported by ABC News.
Associated Press writer Eric Tucker contributed to this report.