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How 'One Of The Greatest Frauds Of All Time' Helped Finance 'The Wolf Of Wall Street'

Authorities say Jho Low stole $4.5 billion from his home country of Malaysia and used the money to fund a lavish lifestyle — and “The Wolf of Wall Street.”

By Jill Sederstrom
Jho Low

It’s been called “one of the greatest frauds of all time” — and it was carried out while its alleged perpetrator was rubbing elbows with some of Hollywood’s biggest stars.

Jho Low, a Malaysian businessman, is suspected of stealing $4.5 billion from the government of Malaysia, using the money to fund movies like “The Wolf of Wall Street,” throw lavish, over-the-top parties and purchase his own custom $250 million yacht to sail around the world with his famous pals.

But when the daring fraud was discovered, Low fled the United States and went on the run. He continues to evade authorities to this day.

“I think it’s safe to say this is one of the greatest frauds of all time, certainly in our times,” Bradley Hope, a journalist and author of “Billion Dollar Whale” told “American Greed” in an episode airing Wednesday at 10 p.m. ET/PT on CNBC.

Low grew up on the island of Penang, Malaysia, where his family was part of the ethnic Chinese minority. His father owed a garment factory that made cheap clothes for the United States. And, while he’d later claim his family had been very wealthy, Low was also known to make up stories about his past — once even claiming he had been a member of royalty, according to "American Greed."

He left Malaysia for the renowned Harrow School, a British boarding school just outside of London where he’d make a critical connection to classmate Riza Aziz.

Aziz’s stepfather, Najib Razak, would later serve as the Prime Minister of Malaysia — that link would then provide Low with the connection he needed to make his suspected theft possible.

But before Low allegedly found a way to steal billions from the country he had once called home, he established himself at the University of Pennsylvania’s Wharton School of business as a financial expert.

“He started an investment fund while he was at Wharton, and that was making some investments on behalf of some wealthy families that he knew in the Middle East and around the world at that time,” said Louise Story, a filmmaker and former journalist with The New York Times.  

He also became known as the “Asian Great Gatsby” after throwing a series of lavish and ridiculous parties, through which he earned popularity and favor by showering other clubgoers with bottles of Cristal (which in some cases could cost up to $4,000 a bottle), according to "American Greed."

“It would start out with like 10 bottles of Cristal and by the end of the night everybody in the entire club was drinking their own bottle of champagne or, you know, something or another bought by Jho Low,” Hope said of Low's parties.

They continued in New York and across the world after he finished school.

Paris Hilton was a frequent fixture at his side, whether it was on a yacht, club or casino, after — said Christen Sproule, a former assistant U.S. attorney — he “basically bought access to her” after developing a crush on her in college.

She wasn’t the only celebrity to befriend the “awkward” businessman. Sproule said Low also once bought Lindsey Lohan 23 bottles of Cristal for her 23rd birthday.

Federal authorities believe that, over a two-year period, Low spent over $200 million in gifts and jewelry for his friends.

“Jho Low loved to purchase gifts for women,” Sproule said. “He would purchase Birken bags or Cartier or Rolex watches and he would just give them away to models and other women he was hanging around with.”

Authorities believe Low gained access to the money after convincing Razak to start a sovereign wealth fund in Malaysia.

“It was supposed to be like, the benevolent fund for the country of Malaysia, where money would get pulled in and generate funds that would help the people of Malaysia,” Debra Laprevotte, a former FBI supervisory special agent told “American Greed.”

Unlike more wealthy countries like Saudi Arabia, Malaysia didn’t have the capital to start a sovereign wealth fund on its own and had to borrow the money — putting the Malaysian taxpayers on the hook — to start the 1 Malaysia Development Berhad, or 1MDB.

Bill McMurry, a former FBI supervisory special agent, said that while Low “purposefully did not have an official role in 1MDB,” he served as a consultant behind the scenes.

And when 1MDB decided, during one of its first projects, to invest $1 billion of Malaysian state funds in a joint venture with a Saudi Arabian oil extraction company, authorities say Low rerouted $700 million of the money into his own account.

His alleged piggy bank only continued to grow after 1MDB partnered with U.S. investment firm, Goldman Sachs, for three separate bond offerings, ultimately raising $6.5 billion.

“Within days of getting the proceeds of these bond offerings, the bank accounts show that hundreds of millions of dollars were being sent to shell company accounts held in Swiss banks and then from there — if you follow the financial tracing further — the funds would then flow to other shell companies controlled by Jho Low,” said Woo S. Lee, former deputy chief at the Department of Justice.

While Goldman Sachs had been unwilling to do business with Low because of their own questions about the source of his finances, authorities say the company was assured by executive Timothy Leissner that Low didn’t have any role in 1MDB.

With billions now at his fingertips, authorities say Low used shell companies to purchase a $30 million penthouse in New York’s Exclusive Time Warner Center, a $140 million stake in a New York hotel and other lavish pieces of real estate in both New York and Los Angeles.

Then in 2012, he partnered with Sony Music and others to purchase EMI Music Publishing — which owns the song catalogs of artists including Lady Gaga, Bob Dylan and Michael Jackson — for $2.2 billion. 

Low also invested in the film studio Red Granite Pictures — which was cofounded by Aziz, his former classmate at Harrow School — in 2011.

While the film studio made several movies, its most notable was the “The Wolf of Wall Street” which ironically told the true story of Jordan Belfort, who would pleaded guilty to stealing more than $100 million from investors.

“They made ‘The Wolf of Wall Street,’ a movie about criminals spending money in ridiculously lavish ways. It’s perfectly fitting that that movie was financed by fraudsters about fraudsters,” McMurry said of Low’s involvement with the hugely successful film.

In 2014, Low continued to use his ill-gotten gains to purchase a 300-foot-long super yacht — complete with a sauna, helicopter landing pad and jacuzzi — for $250 million, according to "American Greed."

But the next year, Low found himself at the center of exposés by The New York Times and The Wall Street Journal that revealed both his connection to 1MDB and questioned the source of his finances.

By 2016, the U.S. government had issued a forfeiture complaint to seek the recovery of more than $1 billion in assets bought with stolen money. Low eventually relinquished about $700 million in assets, and the government seized gifts Low had given to several of his celebrity friends. They also claimed the rights to several films, including “The Wolf of Wall Street,” and both Red Granite Pictures and its cofounders surrendered cash and assets to the government.

Federal charges were filed against Leissner, who officials say helped launder 1MDB funds through the U.S. financial system and helped bribe government officials in Malaysia. He later pleaded guilty to conspiracy to launder money as well as violating the foreign corrupt practices act and agreed to forfeit $43.7 million.

While Leissner is now awaiting sentencing, Low managed to evade authorities. Although he was indicted for conspiring to launder money and conspiring to violate the foreign corrupt practices act, Low fled before his arrest and is said to be living in China with a high-ranking member of the Communist party.

“He will never be able to travel freely around the world," McMurry said. “He will be a fugitive from the United States for the rest of his life, and the United States will never stop looking for him.”

To learn more about the sensational case tune in to “American Greed” Wednesday at 10 p.m. ET/PT on CNBC.

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