“Billion dollar whale” has become a new term in the financial crime dictionary. The term is the nickname associated to the infamous chinese businessman Jho Low. The term also became the title of a famous 2018 bestseller authored by WSJ journalists . The world has come to believe the ridiculous theory that Jho Low was the main character and mastermind of what the 83rd USA General Attorney, Loretta Lynch, described in July 2016 as the largest kleptocracy case in US history, the 1MDB scandal . The DOJ claimed that a total of at least $4.5 billion was misappropriated from 1MDB by high-level officials of the fund and their associates. Since 2016 Jho Low has been the target of several DOJ court cases echoed by the international press . The most famous of all DOJ enforcement actions was the seizing of Jho Low’s $250 mln yacht by Indonesian authorities at the request of US authorities .
On October 30th, 2019 the DOJ announced that had reached what can only be described as a shameful civil settlement with the famous US lawyers representing this fugitive on the run to recover more than $700 mln in assets traceable to 1MDB . It is absolutely unbelievable that the DOJ is willing to agree to a deal that has allowed Jho Low to claim the settlement as a victory since it did not include an admission of guilt or wrongdoing on his part.
I may be wrong but we will probably not see any DOJ criminal prosecutions against Jho Low in the future in spite of the fact that DOJ officials claimed that Jho Low is not off the hook from pending criminal cases in the US: for conspiring to violate the Foreign Corrupt Practices Act and for conspiring to make and conceal “foreign and conduit” campaign contributions in the 2012 US presidential election.
The fact is that both the US and the Malaysian governments have avoided making public that they have known for years that Jho Low took refuge in China where he is being protected by the Chinese government. To the best of my knowledge, no Interpol order of arrest was issued nor will probably ever be issued by the US government in order to prevent a serious diplomatic incident with China.
The 2019 DOJ – Jho Low settlement will leave many questions permanently unanswered, especially inconvenient questions that clearly point to the participation of several USA institutions and corporations in the 1MDB scandal and to the existence of numerous high profile accomplices of Jho Low in the USA, UK and other countries involved in the operation. In this article, I would like to focus some attention on one of these unanswered questions.
On Oct. 13th, 2013 it was announced in Houston and later widely publicized a $50 million donation by Jho Low to the MD Anderson Center . Dr. Lynda Chin, who as Chair of the MD Anderson Department of Genomic Medicine would later manage some of the $50 million dollars donated by Jho Low to the MD Anderson Center, was also the co-chair of an event organized by the Houston Asian Chamber of Commerce (HACC) on April 3rd, 2014 and sponsored by Shell Oil, where Jho Low received the 2014 Entrepreneur of the Year Award from the HACC . (I was invited to that special event but finally, I decided not to attend. I did not know who Jho Low was at the time. I still regret having missed the opportunity to have a picture taken next to the person some have called the most famous financial criminal mastermind of the 21st century so far).
Interestingly enough, Houston was again one month later the stage of Jho Low’s next act, the official announcement on Nov. 13th, 2013 of a $2.2 Billion US dollars deal to purchase Houston’s based oil and gas company Coastal Energy Resources . The buyer was the Abu Dhabi-owned Spanish oil company CEPSA-IPIC . The deal was completed on January 17th, 2014  after receiving approval from the Spanish regulators  as well as from CEPSA and Coastal’s shareholders. No approval was required from the SEC because Coastal was registered at the Toronto Stock Exchange (TSX). No approval was required either from the Canadian regulator because Coastal’s assets were located in Thailand and Malaysia. The Coastal-CEPSA deal has been mostly ignored by the press although it should have been the epicenter of the 1MDB scandal. According to the DOJ, $300 million dollars of that deal found their way into Jho Low’s personal bank account one week after closing the deal even though he had only invested $50 mln that were traceable to the 1MDB fund. . In a previous LinkedIn article  I have shown that Coastal declared 66 MMbbl in reserves before the deal with CEPSA-IPIC on January 2014 and only 17 MMbbl in reserves less than a year after the sale, which is clear evidence of a reserves fraud accounting for the entire value of Coastal, or in other words Coastal intentionally manipulated and overestimated the company value by 45 MMbbl before the sale to CEPSA.
The president of MD Anderson at the time, Ronald A. DePinho, who also happened to be Lynda Chin’s husband, resigned in March 2017 after five years and a half at the job. His leadership attracted heavy scrutiny following an audit by the UT  that raised alarms especially about the troubled partnership with IBM [15,16,17,18] funded by Jho Low’s donation. The partnership was spearheaded by the ex-director’s wife, Dr. Lynda Chin. The audit claimed that “several contracts with IBM and with world-leading auditing company, PwC, violated internal rules. Several of the contracts were not competitively bid and went beyond the approved scope of work, payments were made regardless of whether the services were delivered as agreed upon, payments were made without documented results, and the decision-making skirted the medical center’s own IT department”. The bungle cost $62 million paid to IBM and PwC, plus “uncalculated internal resources including staff time, technology infrastructure and administrative support”, according to the audit. The cost was supposed to be shouldered by a single donor, Jho Low, who didn’t come through with all of the promised funds .
The most interesting part of the M.D.Anderson – IBM fiasco is the fact that half of Jho Low’s gift, $23 mln were paid to PwC for a “Business Plan for a Flagship Informatics Tool” , a technology feasibility study report. Why on Earth did the M.D. Anderson need a business plan for a cancer R&D initiative? How can a simple business plan that some M.D. Anderson employees could have done for free cost $23 mln?
The answer to this question resides in the crucial role that PwC played at the same time in designing the structure of the Oil & Gas Coastal-CEPSA deal where Jho Low received illegally $300 mln for his role as a middleman. PwC UK deals practice office senior partner Tony Skrzypecki was responsible for buy-side due diligence on the $2.2 bln offer for Coastal Energy Resources by Emirati-owned Spanish oil company CEPSA . PwC was not only perfectly aware of the illegal origin of the $50 mln invested by Jho Low but PwC also helped to design the offshore deal that allowed CEPSA to “purchase” Jho Low’s initial $50 mln share for $300 mln just one week after closing the Coastal deal. Oscar Wyatt was also perfectly aware of the illegal origin of Jho Low’s investment as evidenced by the hiring of Law firm Cleary Gottlieb Steen & Hamilton as a legal advisor . This law firm is well known for its representation of national governments in sovereign-debt cases. Spain’s financial regulatory agency CNMV, which approved the deal in record time, was also perfectly aware of all the details regarding the offshore structuring of the deal .
PwC had also advised Jho Low’s SRG company on the same purchase deal and previously PwC was also an advisor on the issuance of the 1MDB bonds deal that Goldman Sachs helped to arrange and sell [21,22]. I would like to point out that Tony Skrzypecki was also the PwC senior partner responsible for several high-profile Oil & Gas deals involving Shell Oil (at the time of the Coastal-CEPSA deal PwC was the official auditing company of Shell Oil).
To summarize, the $23 mln that PwC received from the M.D. Anderson Center was an obvious kickback paid to PwC for the crucial role the auditing company played in the 1MDB scandal and especially in the design of the Coastal-CEPSA deal. The M.D. Anderson Center was not a victim of Jho Low’s evil mastermind plans. On the contrary, the M.D. Anderson management had a key role in facilitating the 1MDB operation. To this date, the M.D. Anderson Center and PwC have not been investigated nor accused of any crime by the DOJ in spite of their obvious complicity in the 1MDB scandal.
 Billion Dollar Whale : The man who fooled Wall Street, Hollywood and the world (Tom Wright & Bradley Hope, Hachette Books, Sept 2018)
 USA Attorney General announces kleptocracy enforcement action to recover more than 1 billion obtained from corruption involving Malaysian sovereign wealth fund (DOJ July 20th 2016).
 US District Court for the Central District of California v. Certain Rights To and Interests in the Viceroy Hotel Group (Deborah Connor et al., June 15th, 2017)
 Superyacht linked to 1MDB arrives at Malaysian port (Reuters, August 6th 2018)
 USA reaches a settlement to recover more than $700 mln in assets allegedly traceable to corruption involving Malaysian sovereign wealth fund (DOJ October 20th 2019)
 M.D. Anderson Moon Shots program gets $50 million pledge. (Houston Chronicle, October 22nd 2013)
 Houston Asian Chamber of Commerce to Award Global Investor and Philanthropist Jho Low During 24 Annual Spirit of Entrepreneurship Awards Dinner. (March 19th 2014, Houston TX, Business Wire)
 Spain’s CEPSA to buy Coastal in deal worth $2.2 billion (Reuters, November 18th 2013)
 CEPSA adquiere la norteamericana Coastal Energy por 1.630 millones de euros (El Economista, November 19 2013)
 CEPSA finalizes Coastal Energy Takeover (1/20/2014, Offshore Energy Today)
 La CNMC da luz verde a la compra de la petrolera canadiense Coastal Energy por CEPSA ( 1/18/2014 El Confidencial Digital).
 U.S. Links Malaysia Prime Minister to Millions Stolen From Fund. (7/21/2016, Bradley Hope, Tom Wright, WSJ).
 The reserves fraud case at the center of the 1MDB scandal (Javier Ferrandis, LinkedIn, December 19th 2019)
 Special Review Procurement Procedures Related to UT M.D. Anderson Oncology Expert Advisor (UT System Administration, November 2016)
 MD Anderson Cancer Center’s IBM Watson project fails, and so did the journalism related to it. (2/23/2017, Health News Review).
 MD Anderson DePinho resigns (STAT News, March 8th 2017)
 4 reasons MD Anderson put IBM Watson on hold (Becker Hospital Review, March 8th 2017) .
 MD Anderson Benches IBM Watson In Setback For Artificial Intelligence In Medicine. (2/19/2017 by Matthew Herper, Forbes Magazine).
 Global Oil & Gas Deals Practice : An International network of Oil & Gas deal advisors (PwC 2015)
 Coastal Completes Merger with CEPSA (Coastal Energy Press Release, January 17th 2014) (This is an outdated site of Coastal Energy Resources. Some links are not working anymore. I can provide a PDF copy of the Coastal Press Releases before the sale to CEPSA by request.)
 Goldman Sachs Ties to Scandal-Plagued 1MDB run deep (12/22/2016, Justin Baer, Tom Wright, Ken Brown, WSJ).
 Behind the 1MDB Scandal: Banks that missed cues and bowed to pressure. (9/6/2016, Tim Wright, Bradley Hope, WSJ).
Categories: Bribery, Corruption
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