The U.S. Justice Department is investigating whether a fugitive Malaysian financier laundered tens of millions of dollars through two associates and used the funds to pay a U.S. legal team that includes former New Jersey Gov.
and a lawyer who represents President Trump, according to people familiar with the matter.
Jho Low, the Malaysian businessman, has been described in U.S. court filings as playing a central role in the alleged embezzlement of $4.5 billion from a Malaysian fund called 1Malaysia Development Bhd.
Malaysian authorities this week separately charged Mr. Low with money laundering in the case, which investigators suspect may be one of the biggest financial frauds in history. He has been moving around Hong Kong, Macau and mainland China in recent months, according to people with knowledge of his whereabouts.
The Justice Department, in July 2016 and last year, filed civil lawsuits in federal court in California seeking to recover assets from Mr. Low and others including mansions, artwork and a yacht allegedly bought with 1MDB funds. It is now pursuing a criminal investigation in which Mr. Low, who has U.S. assets, is a target, these people said.
The team of lawyers and consultants working for Mr. Low includes Mr. Christie, who briefly headed Mr. Trump’s presidential transition team; Mr. Trump’s longtime lawyer
a lawyer who has served as the Trump Organization’s outside ethics adviser; and
a Washington lobbyist with close ties to the Republican Party.
Mr. Low was close to former Malaysian Prime Minister
who unexpectedly lost an election in May and was arrested last month in Kuala Lumpur. Mr. Najib has pleaded not guilty to charges of money laundering and criminal breach of trust in connection with the 1MDB scandal.
Since 2016, Mr. Low’s access to the global financial system has been sharply curtailed by banks wary of handling allegedly tainted funds, according to the people familiar with the matter. That has made it difficult for him to pay directly for a range of outlays, from lifestyle expenses to legal and advisory services, according to these people.
There is no indication that any of the people who ultimately received payments were aware the funds could have originated from money Mr. Low allegedly siphoned off from 1MDB. The Justice Department is investigating Mr. Low’s potential use of two intermediaries to facilitate the payments through the international financial system, people familiar with the matter say. A Justice Department spokeswoman declined to comment.
Representatives for Mr. Low didn’t respond to a request for comment. He has previously denied wrongdoing.
Mr. Christie is representing Mr. Low in the asset-forfeiture cases in California, a spokesman for the former governor said. “There has been no communication by Governor Christie with any other area of government on Mr. Low’s behalf,” the spokesman said, adding there has been “no inquiry made to him by the Department of Justice with regard to any other investigation regarding funding or otherwise.”
A spokesman for Kasowitz Benson Torres, Mr. Kasowitz’s New York law firm, confirmed the firm represents Mr. Low in Justice Department matters. “Here, as with all of our clients, our job as attorneys is to represent and vindicate our clients’ interests; and here, as with all of our non-pro-bono clients, we are paid for the legal services we provide,” the spokesman said in a statement.
Mr. Burchfield said, in an emailed statement, that Mr. Low retained his Atlanta-based firm, King & Spalding, to “advise him on the ongoing investigations,” adding that the law firm “performed appropriate due diligence on sources of payment.”
“Further, neither I nor King & Spalding has had contacts with any governmental entity, directly or indirectly, on behalf of Mr. Low, nor has King & Spalding received any inquiries from the Department of Justice regarding this engagement,” Mr. Burchfield said.
Mr. Rogers declined to comment.
The Justice Department is looking into whether a Thai businessman, Phengphian Laogumnerd, and American former rap artist
a founding member of the Fugees hip-hop group, played roles in helping Mr. Low make payments, the people familiar with the matter said.
For at least a year, these people say, Mr. Low has relied on Mr. Phengphian to pay accommodation expenses in Hong Kong and Macau, legal and advisory bills and to keep Mr. Low’s $250 million yacht, Equanimity, fully staffed and maintained until it was seized earlier this month. Justice Department investigators are examining records and money flows related to a series of companies controlled by Mr. Phengphian in Hong Kong and in offshore havens such as the British Virgin Islands to determine whether Mr. Low’s money was involved, the people said.
The Thai businessman also handled payments of tens of millions of dollars to Mr. Low’s lead law firm and advisers, New York-based Kobre & Kim LLP, and British reputation law firm Schillings International LLP, according to the people familiar with the investigation.
“We do not comment on any specific financial arrangements with our clients due to the commercial confidentiality and privileged nature of such information,” said Robin Rathmell, who has identified himself as Mr. Low’s global counsel at Kobre & Kim. Partners at Schillings didn’t respond to a request for comment.
A representative for Mr. Phengphian said his client “is an independently wealthy businessman. The source of his income is nothing to do with—and he has not received any money from—Mr. Low.”
The representative added: “What he chooses to do with his own funds is his business alone. The Department of Justice has never contacted him about anything, neither have they ever asked him about the source of his funds.”
Mr. Michel was responsible for bringing on another consultant to work on Mr. Low’s behalf: Republican fundraiser and venture-capital executive
who was vice chairman of the Trump campaign’s joint fund with the Republican Party during the 2016 presidential campaign. The route of any payments to Mr. Broidy also are part of the Justice Department probe, the people said.
Mr. Broidy’s lawyer has previously said Mr. Broidy and his wife were hired by Mr. Michel “to provide strategic advice as part of a broader team to Mr. Low.”
A lawyer for Mr. Michel said: “I do not know what, if anything, the Department of Justice is currently reviewing, but I am confident that Mr. Michel has not done anything improper.”
The public-integrity section of the Justice Department is separately investigating some of the lobbying work on behalf of Mr. Low, including whether Mr. Broidy attempted to sell his influence in the Trump administration to Mr. Low, who in turn was allegedly acting as an agent of the Malaysian and Chinese governments, people familiar with the investigations said.
A lawyer for Mr. Broidy said: “Elliott Broidy has never agreed to work for, been retained by nor been compensated by any foreign government for any interaction with the United States Government, ever.”
Mr. Low has been seeking to influence the administration to drop its investigations into him and 1MDB, according to people familiar with Mr. Low’s dealings and the Justice Department investigations. The Justice Department investigations overlap and involve some of the same investigators, the people familiar with them said. The Washington Post first reported on the public-integrity investigation.
—Julie Bykowicz in Washington contributed to this article.
Corrections & Amplifications
The former Malaysian prime minister arrested in Kuala Lumpur last month is Najib Razak. An earlier version of this article incorrectly spelled his name as
(Aug. 29, 2018)