American authorities investigating Malaysian state-run fund 1Malaysia Development Bhd. have asked JPMorgan Chase & Co., Deutsche Bank AG and Wells Fargo & Co. to provide details about their dealings with 1MDB, according to reports Thursday. The 1MDB probe has spanned three continents in the face of corruption allegations against the fund started by the embattled Malaysian Prime Minister Najib Razak.
Investigators have not accused the banks of any wrongdoing and the firms are only helping authorities with the investigation on alleged money laundering at 1MDB, Bloomberg reported. JPMorgan, Deutsche Bank and Wells Fargo helped transfers for the fund and its related units, sources told Bloomberg. The report added citing another source that the U.S. Department of Justice told one of the banks to save documents about dealings dating back to 2009 when 1MDB was founded.
Justice Department officials also traveled to Kuala Lumpur to speak to senior bankers and those with close links to 1MDB, sources told Reuters. It remained unclear whether the officials completed their visit or for how long they were in the city. Sources also told the news agency that a team of lawyers for Deutsche Bank is in Kuala Lumpur readying the report it plans to submit to the authorities.
Apart from the U.S., the 1MDB probe is ongoing in Luxembourg, Malaysia, Singapore, Switzerland, Hong Kong and Abu Dhabi.
On Thursday, the Monetary Authority of Singapore reportedly said that it has been carrying out a “thorough review of various transactions” through the country’s banking system as part of the 1MDB investigation.
Najib, who set up 1MDB in 2009 to boost economic growth in Malaysia, has been linked to the corruption scandal at the fund from which $681 million was traced to the premier's bank accounts. The prime minister has consistently denied the allegations, first made in a July 2015 report by the Wall Street Journal, which said that investigators tracked the money from an account at Falcon Private Bank in Singapore to accounts in Malaysia.
Last month, Tim Leissner, the former chairman of the Southeast Asia division of Goldman Sachs Group Inc., was subpoenaed by U.S. authorities investing the allegations. He reportedly worked on several significant deals for the state-run fund, which earned the investment bank hundreds of millions of dollars. Leissner resigned from the global investment firm in February.
U.S. investigators are probing whether Goldman misled bondholders when it sold securities issued by 1MDB. Investigators are also looking into whether the investment firm’s hiring practices in the region violated U.S. anti-corruption laws.