The Malaysia financial scandal involves a state-owned investment fund called 1MDB. The fund was supposed to be used for development, but it has instead spurred investigations around the world. In particular, the scandal has targeted former Prime Minister Najib Razak. In the 2018 election, he was ousted by angry voters, ending his party’s 61-year rule. Since then, his wife, Rosmah Mansor, has been charged with money laundering.
As part of the investigation, the Justice Department returned more than $1.2 billion of 1MDB funds to Malaysia. These funds were laundered through major financial institutions around the world, including the United States, Luxembourg, Switzerland, and Singapore. While Najib has pleaded guilty to the crimes, he has since appealed his conviction.
The Malaysian government has banned Najib Razak from leaving the country. The police confiscated cash and valuables from his homes. Those seized included RM900 million to RM1.1 billion (about $220 million to $269 million) and more than 12,000 pieces of jewelry and 423 high-end watches.
The cost of Malaysia’s financial scandal has risen 63,000-fold since the first scandal surfaced in 1975. The first scandal, involving the Bank Rakyat, cost RM66 million, while the latest, involving the 1MDB sovereign investment fund, has cost RM42 billion. As a result, former prime minister Mahathir has demanded accountability and transparency for the 1MDB deals.