Campaigners hope move will force commercial banks to rethink holding assets linked to the fossil fuel
Climate campaigners have declared a victory after the Bank of England said it would no longer accept bonds linked to one of the most polluting industries on the planet for key loan arrangements.
The ban, which comes into force in October, marks a fresh crackdown on thermal coal, which is burned in power plants to create electricity, and has long been a target of green policy activists.
Najib Razak walked into Kajang Prison outside Kuala Lumpur on 23 August 2022, the first Malaysian prime minister ever to be jailed, after the Federal Court upheld a 12-year sentence and a 210 million ringgit fine tied to the looting of a state investment fund he himself had chaired. Investigators had traced roughly $681 million into his personal AmBank accounts, money that prosecutors said originated in 1Malaysia Development Berhad — better known as 1MDB — the sovereign wealth vehicle Najib launched in 2009 to develop the Malaysian economy.
The fund was supposed to build power plants and finance affordable housing. Instead it became the largest kleptocracy case the U.S. Department of Justice had ever pursued, with at least $4.5 billion siphoned through a daisy chain of shell companies, offshore banks, and a Hollywood film studio.
The story is partly about a politician. It is mostly about how a single bank account became the evidentiary spine of a global financial scandal.
The fund that was supposed to build a country
Najib became prime minister of Malaysia in April 2009. Within months he had converted a Terengganu state investment outfit into 1MDB and installed himself as chair of its advisory board, with sign-off authority over major transactions. The pitch was ambitious — strategic infrastructure, partnerships with Gulf sovereign funds, a sovereign wealth approach modeled on Singapore’s Temasek.
Behind the brochures, something else was being built. Between 2009 and 2014, 1MDB raised more than $10 billion in bonds, much of it underwritten by Goldman Sachs, which collected close to $600 million in fees on three bond offerings — an extraordinary multiple of what a sovereign-linked deal would normally pay. Hong Kong regulators later fined Goldman $350 million for its role in the offerings.
Money flowed out of the fund almost as fast as it came in.
The $681 million that arrived by SWIFT transfer
In March 2013, weeks before a general election, two transfers totaling roughly $681 million landed in Najib’s personal accounts at AmBank in Kuala Lumpur. The transfers came through Falcon Private Bank in Singapore, originating from a British Virgin Islands shell called Tanore Finance Corporation.
When the Wall Street Journal first reported the deposits in July 2015, Najib’s office did not deny the money had arrived. The official explanation, repeated for months, was that the funds were a personal donation from the Saudi royal family to support Malaysia’s fight against the Islamic State.
Saudi officials never publicly confirmed the gift. U.S. prosecutors later traced the money back not to Riyadh but to 1MDB itself, routed through a chain of accounts in Switzerland, Luxembourg, and Singapore designed to obscure its origin.
The young financier at the center
The architect of the scheme, according to filings by the U.S. Department of Justice and Malaysian prosecutors, was a Penang-born financier named Low Taek Jho, known as Jho Low. He held no official position at 1MDB. He carried no government title. But he moved between Najib’s inner circle, Abu Dhabi’s sovereign wealth funds, and Hollywood producers with a fluency that prosecutors described as the operational core of the fraud.
Low spent some of the diverted money on a $250 million superyacht called the Equanimity, on Picassos and Basquiats, on a stake in EMI Music Publishing, and on financing the 2013 film The Wolf of Wall Street through Red Granite Pictures — a company co-founded by Najib’s stepson Riza Aziz. The Department of Justice would later seek to claw back the film’s profits as proceeds of crime.
Low has been a fugitive since 2016. Malaysian authorities believe he is in China. He denies wrongdoing.
How the jewelry box became the smoking gun
When Malaysian police raided properties linked to Najib and his wife Rosmah Mansor in May 2018, days after his shock election defeat to Mahathir Mohamad, the inventory read like an auction catalog. Officers seized 12,000 pieces of jewelry, 567 handbags including 272 Hermès Birkins, 423 watches, and 234 pairs of sunglasses. The total estimated value reached 1.1 billion ringgit, roughly $273 million at the time.
One pink diamond necklace alone was valued at $27 million.
The seizure became a visual shorthand for the case. Physical objects — handbags, watches, real estate — anchor abstract financial crimes in the public imagination in a way that SWIFT codes and shell-company structures never can. A spreadsheet doesn’t make the news. A wall of Birkins does.
The SRC International trial
The 12-year sentence Najib began serving in 2022 stems not from the full 1MDB case but from a smaller subsidiary called SRC International. Prosecutors proved that 42 million ringgit, about $10 million, flowed from SRC into Najib’s personal accounts between 2014 and 2015.
High Court judge Mohamad Nazlan Mohamad Ghazali convicted him on all seven charges in July 2020 — one count of abuse of power, three counts of criminal breach of trust, and three counts of money laundering. The Court of Appeal upheld the verdict in December 2021. The Federal Court, Malaysia’s highest, dismissed his final appeal on 23 August 2022.
He was driven from the courthouse straight to Kajang Prison the same afternoon.
The far larger 1MDB trial — the one dealing directly with the funds that flowed into his personal accounts — ran on for years afterward. On 26 December 2025, the Kuala Lumpur High Court convicted Najib on four counts of abuse of power and 21 counts of money laundering over more than $700 million channeled from 1MDB into his accounts, and sentenced him to a further 15 years in prison along with a fine of 11.4 billion ringgit — the new term to begin only after his current sentence ends. His lawyers filed an appeal against the conviction and sentence within days.
The global recovery effort
The U.S. Department of Justice filed civil forfeiture actions seeking to recover more than $1.7 billion in 1MDB-linked assets — paintings by Van Gogh and Monet, a Bombardier jet, penthouses in New York and London, the Equanimity yacht, and rights to The Wolf of Wall Street. By 2024, settlements and recoveries had returned more than $1 billion to Malaysia.
Switzerland, Singapore, and Luxembourg opened their own investigations. Falcon Private Bank lost its Singapore license. BSI Bank was shuttered. Several private bankers received prison sentences ranging from a few weeks to four and a half years.
Goldman Sachs settled with the U.S. government for $2.9 billion in 2020 — at the time the largest penalty ever paid under the Foreign Corrupt Practices Act. The bank’s Malaysia unit pleaded guilty. Two former Goldman bankers, Tim Leissner and Roger Ng, were convicted in connection with the scheme.
What the bank account proved
The legal turning point in the SRC case was not testimony or whistleblower documents. It was the bank account itself. Najib’s defense argued he believed the money in his AmBank accounts was a Saudi donation. The court rejected that defense partly because the volume of deposits, withdrawals, and transfers passing through the accounts — and the fact that they continued long after the supposed donation purpose had lapsed — was inconsistent with any innocent reading.
A prime minister with sign-off authority over a sovereign fund, receiving nine-figure sums from offshore shells into his personal account, then spending portions of that money on credit-card bills and political expenses, leaves a paper trail that even sympathetic judges cannot ignore.
The gradual normalization of small ethical breaches can make the larger ones feel routine to the people committing them. A donation here. A consulting fee there. A bank account that no one ever questions.
Life inside Kajang
Najib is now an inmate at Kajang Prison, the same facility that once held opposition leader Anwar Ibrahim on charges Anwar maintained were politically motivated. The symmetry is not lost on Malaysians.
In February 2024, the Pardons Board chaired by then-king Sultan Abdullah halved Najib’s sentence to six years and reduced his fine from 210 million ringgit to 50 million. He then spent more than a year arguing that a royal addendum issued alongside the pardon entitled him to serve the rest of that term at home. In December 2025 the High Court ruled the addendum was not legally enforceable, and in April 2026 Najib withdrew his appeal against that decision, closing off the house-arrest bid.
The transition from high status to incarceration describes a particular kind of disorientation — not just the loss of liberty but the collapse of the deference structures that previously shaped every interaction. For a man who spent nine years as prime minister, addressed as Yang Amat Berhormat, the transition to a numbered uniform and a 6 a.m. roll call is its own kind of sentence.
The number that stays
Of all the figures in the 1MDB case — the $4.5 billion siphoned, the $2.9 billion Goldman penalty, the $1.7 billion in U.S. asset seizures, the 1.1 billion ringgit in jewelry — the one that keeps coming back is the original $681 million that arrived in a politician’s personal bank account in March 2013.
It is a small number compared to the total fraud. It is, by the reckoning of the prosecutors who built the case, among the largest sums ever traced into the personal account of a sitting head of government anywhere in the world.
The wire transfer took seconds. The reckoning took the better part of a decade to reach him. And with a second conviction now stacked on the first — under appeal, but handed down — the years Najib has left in Kajang to think about how it ever got that far stretch well beyond the sentence that first put him there.
Miranda Kerr handed jewelry to the U.S. Department of Justice in 2017, including a heart-shaped pink diamond that had been given to her by Malaysian financier Jho Low, after federal investigators traced the gems to money allegedly siphoned from the Malaysian sovereign wealth fund 1MDB. The Australian model told prosecutors she had no idea the gifts were bought with stolen money and surrendered them voluntarily once the chain of custody was explained.
The heart-shaped pink diamond was reportedly purchased from New York jeweler Lorraine Schwartz. The rest of the haul Kerr returned — earrings, a pendant, a bracelet — pushed the total package toward what court filings described as a multimillion-dollar parcel of stones that had moved from Geneva safes to a model’s jewelry box to, finally, an evidence locker in Washington.
None of it would have been remarkable in the world of celebrity gifting if the money behind it had been clean. It wasn’t.
What 1MDB actually was
1Malaysia Development Berhad was a sovereign wealth fund set up by then–Prime Minister Najib Razak, ostensibly to drive long-term economic projects across Malaysia. U.S. prosecutors say billions of dollars were diverted out of the fund through a chain of shell companies, fake consulting fees, and forged bond documents.
The Department of Justice called it one of the largest kleptocracy cases it had ever brought. The money funded penthouses in Manhattan and London, a superyacht called the Equanimity, Picassos and Basquiats, and — improbably — much of the production budget for the 2013 Martin Scorsese film The Wolf of Wall Street, a movie about financial fraud.
At the center of the spending was Low Taek Jho, known as Jho Low, a young Penang-born financier with no formal title at 1MDB but enormous influence over how its money moved. He has denied wrongdoing and remains a fugitive, last reported to be living under Chinese protection.
How the diamond ended up around Kerr’s neck
Kerr and Low met in the early 2010s. According to filings unsealed by the DOJ’s Kleptocracy Asset Recovery Initiative, Low gave her a series of high-end pieces from Lorraine Schwartz over several months — including earrings, a heart-shaped diamond pendant, and a diamond bracelet.
The heart-shaped pink diamond was the centerpiece. Pink diamonds of that size are vanishingly rare — the Argyle mine in Western Australia, which produced most of the world’s pink diamonds, shut down in 2020, and stones in the multi-carat range routinely sell for tens of millions at auction.
Kerr stopped seeing Low and married Snapchat co-founder Evan Spiegel in 2017. By the time the DOJ contacted her, the jewelry had been sitting in her possession for several years.
The Kleptocracy Initiative
The unit that came knocking was a specialized DOJ team launched to chase stolen foreign-government funds parked in U.S. assets. Its method is unusual: rather than waiting to extradite a suspect, it files civil forfeiture suits against the assets themselves — a yacht, a painting, an apartment, a diamond — and lets the property owner contest the claim.
That structure is why Kerr’s name appeared in court documents at all. The jewelry, not the model, was the legal defendant. Returning the pieces removed her from the proceeding entirely.
Actor Leonardo DiCaprio, who starred in The Wolf of Wall Street and had also received gifts from Low, separately handed over items including artwork. Both Kerr and DiCaprio cooperated; neither was accused of any wrongdoing.
What voluntary return actually means
The phrase voluntary disclosure carries specific legal weight in U.S. white-collar practice. Federal prosecutors offer reduced penalties — sometimes full non-prosecution — to individuals and companies that hand over assets or information before being formally charged. The IRS runs its own version, and recent reporting suggests the agency is trying to revive its Voluntary Disclosure Practice after years of low participation.
The Southern District of New York, which has handled many of the largest financial-crime cases of the past decade, recently formalized its own framework. In February 2026, SDNY announced a new corporate enforcement and voluntary self-disclosure program aimed at companies that come forward early with evidence of misconduct.
The Commodity Futures Trading Commission followed in May with a similar cooperation policy for commodities-market participants. The pattern is consistent across agencies: hand things over fast, and the penalty curve bends.
Kerr’s surrender of the jewelry in 2017 was the celebrity-shaped version of the same move.
Where the diamond went
The DOJ sold the returned 1MDB assets — including the Kerr jewelry, DiCaprio’s artwork, real estate in Beverly Hills and Manhattan, and the seized superyacht — and repatriated the proceeds to Malaysia. By the most recent DOJ accounting, substantial sums have been returned to the Malaysian government in what represents one of the largest civil-forfeiture recoveries in U.S. history.
The pink heart-shaped diamond was auctioned privately. Its current whereabouts are not public.
The Equanimity, the superyacht Low commissioned, was seized by Indonesian authorities at the DOJ’s request and sold to Malaysian casino operator Genting. It now sails under the name Tranquility.
The Najib trial and the verdict that followed
Najib Razak, the former prime minister at the center of the scheme, was voted out of office in 2018 after nearly a decade in power — an election upset driven in large part by public anger over 1MDB. He was convicted in 2020 on multiple charges including criminal breach of trust, abuse of power, and money laundering, and sentenced to prison.
Najib has continued to deny knowing the money was stolen, insisting Jho Low misled him. In 2024, his sentence was reduced by Malaysia’s pardons board, a decision that drew significant domestic criticism.
Goldman Sachs, which underwrote bond issuances for 1MDB, paid billions of dollars in settlements to the Malaysian government and pleaded guilty in 2020 to violating the Foreign Corrupt Practices Act. Its Malaysian subsidiary pleaded guilty to conspiracy to bribe foreign officials.
Why the case still matters to compliance officers
1MDB has become a kind of teaching case for bank compliance teams, partly because the money moved through so many supposedly well-monitored institutions before reaching jewelers, art dealers, and yacht brokers. Modern anti–money-laundering programs lean heavily on transaction monitoring, beneficial-ownership checks, and what compliance specialists call enhanced due diligence on politically exposed persons.
The next phase, industry analysts argue, will be heavier use of AI for pattern detection. A recent Compliance Week piece describing how banks will stay ahead of financial crime in 2026 argues that real-time analytics and behavioral models are replacing the old rules-based screens that 1MDB-era transactions slipped through.
That shift creates its own problem: opaque models that flag transactions without showing their work. Financial regulators have started pressing institutions to use systems that can explain a decision in human-readable terms, a push that one Forbes Technology Council piece frames as the need for transparent, trustworthy AI in financial decision-making.
Jho Low, still missing
Low himself has never been arrested. U.S. prosecutors indicted him on money-laundering and bribery charges. Malaysia and Singapore have also issued warrants. He is widely reported to be living in Shanghai or Macau, and a 2019 Wall Street Journal book co-authored by reporters Tom Wright and Bradley Hope, Billion Dollar Whale, documented his attempts to maintain a luxury lifestyle in transit between safe jurisdictions.
In 2019, he agreed to a civil settlement with the DOJ to forfeit hundreds of millions of dollars in assets — without admitting wrongdoing — including a Bombardier jet, a Beverly Hills hotel stake, and various real estate parcels.
The detail that lingers
Kerr’s handover is, in dollar terms, a rounding error against the billions the DOJ traced. The heart-shaped diamond was one of thousands of objects that money bought before it was caught.
What it captures is the geometry of modern financial crime — stolen sovereign wealth becoming a stone, the stone becoming a gift, the gift becoming evidence, the evidence becoming a wire transfer back to the country it came from. The diamond moved through Geneva, New York, Los Angeles, and Washington before its proceeds settled, eventually, back in Kuala Lumpur.
Somewhere it is being worn again, by someone who probably doesn’t know where it has been.
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On 18 June 2020, the auditors at Ernst & Young told Wirecard’s management board they could not confirm that EUR 1.9 billion the company claimed to hold in two Philippine bank accounts actually existed. Within four days, Wirecard would admit the money probably never had. Within a week, the most valuable fintech in Europe — a member of Germany’s DAX 30, briefly worth more than Deutsche Bank — would file for insolvency.
The forensic question is narrow and strange. How does almost two billion euros disappear from a balance sheet when it was never there to begin with? The answer lies in a paper trail that ran through Manila, two of the largest banks in the Philippines, and a set of documents that the banks themselves said were fake.
The money that was supposed to be in Manila
Wirecard’s official story, repeated to investors for years, was that the company processed payments for clients it could not legally hold accounts for directly — high-risk merchants in places where Wirecard did not have local licences. To handle those flows, it used what it called “third-party acquirers,” partners in Asia who collected the cash on Wirecard’s behalf and parked the proceeds in escrow accounts at local banks.
By 2019, those escrow balances had grown to EUR 1.9 billion. On paper, the money sat in trust accounts at two Manila institutions: BDO Unibank and Bank of the Philippine Islands. The auditors at EY had been signing off on Wirecard’s accounts for a decade. Each year, the third-party acquirer business reported the fattest margins in the group. Each year, the cash balances grew.
The trouble was that no one at EY had ever physically confirmed the accounts existed by talking directly to the banks. Confirmation letters, instead, were funnelled through a Manila-based trustee, who in turn produced documents on what appeared to be BDO and BPI letterhead.
Seven days in June
In April 2020, KPMG completed a separate special investigation that Wirecard had commissioned to silence years of fraud allegations from the Financial Times. The KPMG report could not verify the existence of the third-party acquirer revenues. It was the first crack.
Two months later, EY refused to sign off on the 2019 annual accounts. Wirecard’s chief executive Markus Braun went on video on 18 June and suggested the company might be the victim of a large-scale fraud, an attempt to frame Wirecard itself as deceived rather than complicit.
That framing collapsed within forty-eight hours. On 21 June, Benjamin Diokno, governor of the Bangko Sentral ng Pilipinas, told reporters in Manila that the EUR 1.9 billion had never entered the Philippine financial system. Both BDO and BPI, he said, had checked their records. Neither had ever had Wirecard as a client.
Diokno stated in remarks reported by Deutsche Welle that their investigation found no money had entered the Philippine financial system and that both banks had no records of Wirecard as a client. He added that the scandal had fraudulently used the names of two major Philippine banks to conceal the perpetrators’ activities.
The documents linking the banks to Wirecard’s escrow accounts, Diokno said, were fake.
On 22 June, Wirecard’s management board issued an ad-hoc disclosure conceding that the EUR 1.9 billion most likely did not exist. On 25 June, the company filed for insolvency. Markus Braun had already resigned. His chief operating officer, Jan Marsalek, had vanished.
The mechanics of a forged escrow
To understand how the documents passed muster for so long, you have to picture the chain of custody. Wirecard did not claim to hold the accounts itself. The accounts were held by a third-party trustee, who held the money in trust for Wirecard’s clients, at banks Wirecard had no direct relationship with. Each link in the chain reduced what could be verified directly.
When auditors asked for confirmation, the request went to the trustee. The trustee produced bank statements and confirmation letters. Those letters bore what looked like the letterheads of BDO and BPI, with what looked like the signatures of bank officers. EY relied on screenshots and faxed copies for years before finally, in 2020, demanding direct contact with the banks.
When that contact happened, both banks said the same thing: the documents were not theirs. Philippine prosecutors later filed charges against a bank executive, while clearing several others, in a case that named a former Department of Transportation official among those tied to forged documents.
The structure worked because each party in the chain had an alibi. The banks did not know their letterheads were being copied. The trustee — a Manila lawyer named Mark Tolentino, appointed in 2019 — who held no real money, was the choke point. And the auditors, who should have been the backstop, accepted documents that travelled through too many hands.
The forensic puzzle does not end with the forgery. The EUR 1.9 billion was not merely cash that disappeared. It was the accounting plug that made the rest of the business look profitable.
Wirecard’s third-party acquirer revenues — the supposed payments processing in Asia — accounted for a substantial portion of the group’s reported profits in the years before 2020. Take away those revenues and what remained was a payments business that was, at best, marginally profitable, and at worst losing money. The escrow balances were the visible proof that the revenues were real. As long as the cash pile kept growing, the profits looked credible.
The cash pile was the alibi. Once it evaporated, the entire growth story did too. Wirecard’s share price collapsed in the space of a week. The company’s auditors at EY, who had signed off on the accounts for more than a decade, became defendants. German prosecutors opened criminal investigations into Braun and his colleagues. Braun denies wrongdoing and says he was deceived by subordinates; his trial in Munich has been underway, with proceedings continuing.
The man who vanished
The other half of the forensic question is who actually moved the paper. Jan Marsalek, the Austrian chief operating officer who oversaw the third-party acquirer business, disappeared in the days following the scandal’s exposure. Reports indicate he fled to Russia.
Marsalek had spent years cultivating contacts in Russian intelligence circles. Investigative reporting by The New Yorker and a joint investigation by Der Spiegel, ZDF and The Insider has since placed him in Moscow, where German prosecutors believe he is being protected. The Bundeskriminalamt has had him on an international wanted notice for more than five years.
The forensic significance of Marsalek is not just where he ended up. It is that the person with operational responsibility for the third-party acquirer business — the part of Wirecard that did not exist — was the one with the means and the contacts to disappear cleanly within seventy-two hours of the auditors raising the alarm.
For those interested in the broader context of this scandal, Silicon Canals has a detailed video examining the full scope of what became one of Europe’s largest financial frauds, including the intelligence connections that made it possible.
What the auditors saw and did not see
The KPMG special investigation, published in April 2020, is the cleanest forensic record of how the escrow story unravelled from the inside. KPMG examined transactions across three third-party acquirer partners — in Dubai, the Philippines and Singapore — and reported it could not obtain the original documentation to verify the revenues. The auditors’ phrasing was careful, but the message was clear: the evidence Wirecard had been giving its statutory auditors for years was not the kind of evidence a forensic accountant could trace to a counterparty.
That phrasing — that the auditors could not verify — is what triggered EY’s refusal to sign two months later. The two events were sequential. The KPMG report exposed the absence of original documents. EY then demanded the originals from the banks themselves. The banks said the documents did not exist.
EY itself has since faced regulatory sanction in Germany. The Apas, the German audit watchdog, fined the firm and barred it from accepting new listed-company audit mandates for two years. Several individual EY auditors face professional sanctions. Civil litigation by Wirecard’s creditors and shareholders continues in courts across Europe.
The trail that ended on letterhead
What makes the Wirecard case unusual in the catalogue of financial frauds is not the size, although EUR 1.9 billion is large by any measure. It is the simplicity of the final step. The fraud did not require a complex derivatives structure or a hidden subsidiary network. It required a printer, a plausible letterhead, and a chain of intermediaries long enough that no auditor ever picked up a telephone to the bank named on the page.
BDO and BPI, when finally asked directly, took less than seventy-two hours to confirm what a single phone call years earlier could have established: they had never heard of Wirecard. Statements from both banks and from the Philippine central bank were unequivocal. No accounts. No client relationship. Fabricated documents.
The forensic mechanism, stripped to its essentials, was this: a company invented a stream of profits, invented the bank balances that proved the profits were real, invented the trustees that held the balances, and invented the bank confirmations that verified the trustees. Each layer of the invention pointed at the next layer for validation. None of the layers pointed at anything that could be physically counted.
For five years, the Financial Times reporter Dan McCrum had written that the Wirecard business model did not add up. The Bundesanstalt für Finanzdienstleistungsaufsicht — BaFin, the German regulator — responded in February 2019 by banning short-selling of Wirecard shares, the first time it had ever shielded a single listed company that way, and later referred a suspected market-manipulation case to Munich prosecutors, who were already investigating McCrum. The regulator was treating the people pointing at the empty room as the threat.
The room turned out to be empty on a Thursday afternoon in Aschheim in June 2020, when EY refused to sign. By Sunday, the Manila banks had said the documents on their letterhead were not theirs. By the following Thursday, the company was insolvent. Six years on, Markus Braun’s trial continues in Munich. Jan Marsalek, according to investigators tracking his Moscow life, is still there. The EUR 1.9 billion is still where it always was, which is nowhere at all.
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