Malaysia's former leader was formally charged with money-laundering $10 million linked to 1MBD that ended up in his personal coffers.

Najib Razak, the former Prime Minister of Malaysia, entered a not guilty plea after being charged with three counts of money-laundering in a Malaysian court on top of criminal breach of trust charges two months ago. He was released on bail on Wednesday.

The roughly $10 million sum which sparked the most recent charges against the ex-leader represents a drop in the bucket of the billions that U.S. prosecutors allege was pilfered, then rinsed through the financial system. On the same day, Malaysia also took possession of an impounded $250 million superyacht that had been allegedly bought with 1MDB money.

Uncharted Territory

The trial of Najib, which follows a peaceful handover of power after elections in May, represents uncharted territory. Najib's fate – he could face a hefty fine, up to 20 years in jail, and caning on the laundering charges – is unclear.

He has spent some of his time since leaving office declaring his innocence and criticizing the policies of his successor, Mahathir Mohamad, on social media, as well as with family:


Najib and his wife were prevented from leaving Malaysia shortly after the ex-PM was defeated by Mahathir in May. Najib's lawyer asked for a gag order which would prevent or limit public reporting on the trial, arguing that public opinion against Najib could prejudice the case against him.

A judge decides on Friday whether to grant the gag order, as well as whether Najib could defer trial – his lawyers argue for next year. The move will be highly political: until recently, Najib was a regular visitor to Singapore, and was welcomed by current U.S. President Donald Trump as well as previous U.S. President Barack Obama.

Probe Kickstarted

The May election which handed power to Mahathir, a 93-year-old career politician who already was PM from 1981 to 2003, gave a shot in the arm to a years-long 1MDB investigation in six countries including Singapore, the U.S., and Switzerland.

Switzerland's attorney general Michael Lauber visited his new Malaysian counterpart, Tommy Thomas, last month. Meanwhile, Malaysian anti-corruption investigators reportedly headed for Washington to compare notes with their U.S. counterparts last month.

During his visit to Malaysia, Lauber said he believed as much as $7 billion from 1MBD had made its way through the financial system, and wanted to investigate how much of this was misappropriated.