1MDB scandal (2015-)
This page explains the 1MDB scandal, the court cases and international investigations it produced, and its role in Malaysia’s change of government in 2018.
Photo: InterEdit88 · CC BY-SA 4.0 · Wikimedia Commons
what happened
1MDB began as a government-owned development and investment company in 2009. It later raised large sums through bond transactions, including three transactions worth about US$6.5 billion arranged by Goldman Sachs in 2012 and 2013.
The issue became central to Malaysian politics after 2015 reporting alleged that large sums had entered then-prime minister Najib Razak’s personal accounts. U.S. authorities subsequently pursued civil forfeiture of assets connected to alleged 1MDB fund misappropriation, while Malaysian and foreign authorities pursued investigations, settlements, and criminal cases.
In 2018, Pakatan Harapan and its Sabah ally won enough parliamentary seats to form the federal government, ending Barisan Nasional’s period in power. Researchers identify the fallout from 1MDB as one among several important factors shaping that election’s political environment.
The legal consequences have been spread across countries and years. Goldman Sachs’ Malaysian subsidiary pleaded guilty in the United States in 2020, Roger Ng was sentenced there in 2023, and the DOJ says it has returned about US$1.4 billion to Malaysia. In Malaysia, Najib’s SRC conviction was upheld by the Federal Court in 2022, while his main 1MDB conviction in December 2025 remains a High Court decision rather than the same final appellate outcome.
the working
What the sources say
established
1Malaysia Development Berhad (1MDB) was a Malaysian government-owned strategic investment and development company, created after the federal government took control of Terengganu Investment Authority in 2009.
established
In 2012 and 2013, Goldman Sachs arranged and underwrote three 1MDB bond transactions worth about US$6.5 billion; Goldman later acknowledged receiving about US$600 million in fees for this work.
established
In July 2015, reports by *The Wall Street Journal* and Sarawak Report alleged that about US$700 million had entered Najib Razak’s personal bank accounts, making 1MDB a major public and political issue in Malaysia.
established
The U.S. Department of Justice (DOJ) brought civil forfeiture actions in 2016 seeking to recover assets connected to the alleged misappropriation of 1MDB funds; the DOJ described these as among its largest forfeiture actions.
adjudicated
In 2020, Goldman Sachs (Malaysia) Sdn. Bhd. pleaded guilty in the United States to conspiracy to violate the Foreign Corrupt Practices Act; its parent company entered a deferred-prosecution agreement and the coordinated resolution involved more than US$2.9 billion in payments.
established
Malaysia and Goldman Sachs reached a 2020 settlement over claims and charges relating to the three bond transactions, described by Malaysia’s Finance Ministry as a US$3.9 billion settlement.
established
In 2023, the DOJ said it had returned approximately US$1.4 billion in misappropriated 1MDB funds to Malaysia.
established
MACC chief commissioner Azam Baki said Malaysia had recovered RM31,301,717,268.56 in 1MDB-related funds by the end of 2025, which he described as 74.5% of RM42 billion misappropriated; recovery work was continuing, so this was an official accounting rather than necessarily a final total.
adjudicated
Former Goldman Sachs managing director Roger Ng was convicted in the United States in connection with the 1MDB bribery and money-laundering scheme and was sentenced to 10 years’ imprisonment in March 2023.
established
At the 9 May 2018 general election, Pakatan Harapan and its Sabah ally secured enough seats to form the federal government, ending Barisan Nasional’s long period in federal power; Najib accepted his coalition’s defeat.
adjudicated
Najib Razak was convicted over RM42 million from SRC International Sdn. Bhd., a company linked to 1MDB; on 23 August 2022, the Federal Court upheld all seven convictions, the 12-year prison sentence, and the RM210 million fine.
established
In February 2024, the Federal Territories Pardons Board halved Najib's SRC sentence to six years and reduced the fine to RM50 million, with release due in August 2028 if the fine is paid; the reduction is an executive clemency decision, separate from the courts' affirmation of the convictions.
adjudicated
On 26 December 2025, the High Court found Najib guilty on four abuse-of-power charges and 21 money-laundering charges in the main 1MDB case.
adjudicated
A separate 2023 case concerning alleged tampering with a government audit report on 1MDB ended in Najib’s acquittal.
uncertain
Police said in May 2026 that Low remained at large and wanted after charges were brought against him in Malaysia in 2018; his location and whether he will face trial in Malaysia or another jurisdiction have not been publicly confirmed.
where accounts differ
The parts nobody agrees on
alleged
The DOJ’s 2016 civil complaints alleged that more than US$3.5 billion belonging to 1MDB was misappropriated between 2009 and 2015 by high-level officials and associates. This was an allegation in civil-forfeiture proceedings, not by itself a criminal conviction of every person mentioned.
adjudicated
Najib denied wrongdoing in the proceedings against him. In the SRC case, his defence was considered and rejected by the Federal Court; the High Court’s 2025 verdict in the main 1MDB case remains distinct from a final appellate determination.
contested
Political scientist Sophie Lemière argues that the fallout from 1MDB was one of several forces that changed Malaysia’s electoral dynamics in 2018; this is an interpretation of political causation, not a finding that the scandal alone determined the election result.
uncertain
The full responsibility of fugitive financier Low Taek Jho (“Jho Low”) and other individuals has not been finally resolved in a Malaysian criminal trial; U.S. authorities have described charges against some individuals as allegations unless proven in court.
still being researched
- Which remaining civil claims and criminal proceedings connected to 1MDB are still active in Malaysia and abroad?