by Tom Wright
But it was one thing to take money from a Malaysian fund and funnel it to Swiss bank accounts under the guise of a sovereign investment, using friends in official positions to address any concerns of compliance executives at banks. Now, Low wanted to get the money into the United States so he could spend it on luxuries and begin building his empire. That was risky, because the United States had started clamping down on corrupt foreign officials buying assets in Western nations. To do so, Low turned to Shearman & Sterling. Founded in 1873, with its headquarters at 599 Lexington Avenue in Midtown Manhattan, Shearman was as white-shoe a law firm as they came, an organization more suited to handling major mergers and acquisitions than dealing with the likes of Low.
Low claimed to have a relationship with a large Malaysian sovereign fund, and he appeared to also be close to Mubadala, the Abu Dhabi fund, so Shearman’s partners apparently felt comforted about his reputation. The fact that Low held money with Coutts, banker to the Queen, was another level of assurance, as if the funds had accrued their own integrity simply by passing through storied institutions.
Low informed his new legal team that he would be making a sequence of major investments, but he was very concerned about privacy. He opted to use the firm’s Interest On Lawyer Trust Accounts, or IOLTAs, to help distribute the money. These trust accounts are typically formed by U.S. law firms to pool clients’ money, say, when they are holding short-term funds for business deals or property purchases. This arcane corner of the financial world came into existence three decades ago as a way for law firms to earn short-term interest on client money to finance legal aid for the poor, but over time the accounts developed a reputation for shielding the identity of clients in transactions and helping to hide the origin of funds. Some states mandate that law firms set them up. IOLTAs are at once good for society and a powerful tool for crime.
Lawyers, unlike bankers, don’t have to conduct due diligence on a client. Details of transfers through IOLTAs, meanwhile, are protected by lawyer-client privilege. While it is illegal for lawyers to abet money laundering, they are not required to report suspicious activity to regulators. The Financial Action Task Force, a Paris-based intergovernmental group that sets standards for stopping fraudulent use of the global finance system, has highlighted the United States’s poor oversight of lawyers as a weak spot in its defenses against money launderers.
In just a few years since graduating from Wharton, Low was becoming skilled in working out ways to use relatively unobserved parts of the financial system to avoid detection, darkened corners where regulators don’t have full visibility and others had no reason or duty to be suspicious. These lawyer accounts fit the bill perfectly, especially because wire transfers leaving an IOLTA account generally denote only the name of a law firm, not that of the client, making it hard for correspondent banks to detect suspicious activity.
On October 21, 2009, Low wired $148 million from the Good Star account in Switzerland to an IOLTA account at Shearman in New York, part of a staggering total of $369 million that would enter such accounts at the law firm over the next twelve months. The reasons Low gave for the transfers, noted on wire documents, ranged from property purchases to deals to buy companies. But at first, he simply used this money to fund endless rounds of partying.
Between October 2009 and June 2010—a period of only eight months—Low and his entourage spent $85 million on alcohol, gambling in Vegas, private jets, renting superyachts, and to pay Playmates and Hollywood celebrities to hang out with them. Low set himself up at the Park Imperial on 230 West Fifty-Sixth Street in New York, a granite apartment building with geometric angles that resemble bookends and sweeping views of Central Park and the Hudson River. The move put Low in the company of boldfaced names of entertainment. James Bond actor Daniel Craig was staying in a $38,000-a-month apartment there while starring in a Broadway play, and Sean “Diddy” Combs had a place in the building.
Low rented a suite of rooms that cost $100,000 per month. The flashy new resident showed up at the building in a convoy of black Cadillac Escalades with a retinue of security, and he paid for a number of other apartments in the building for his entourage, which included Hamad Al Wazzan, his wealthy Kuwaiti friend from Wharton. Long-term residents complained about the bodyguards and the ostentation, but that was exactly Low’s aim: to show he had arrived.
He began to spend eye-popping amounts, running up a $160,000 bar bill at Avenue, a new club in New York’s Chelsea district, on a single night during fall Fashion Week in 2009. On another occasion, Low sent twenty-three bottles of Cristal to actress Lindsay Lohan’s table when he spotted her during a night out in Manhattan. These enormous outlays landed Low in the New York Post, which called the “big-spending Malaysian… the mystery man of [the] city club scene.”
Low wasn’t a total newcomer to the party world. Since at least the mid-2000s, his behavior had raised eyebrows. He would appear at clubs and outspend even the biggest Wall Street bon vivants—ordering $900 bottles of Cristal for no seeming purpose on a midweek night. Tracy Hanna, a cocktail waitress who served him in the Hamptons, remembers Low around 2005 spending some $30,000, a sum nearly equivalent to the median U.S. annual income, in only one evening. In this era of inequality, however, Low’s behavior wasn’t so notable.
“We just thought he was some kind of royalty,” Hanna recalled. “There were a lot of princes at the time, especially from Saudi. We thought they can’t drink or party where they’re from, so they go crazy in America.”
On another occasion he flew waitresses from New York to Malaysia for a party.
When Nawaf Obaid, the brother of Tarek Obaid, the PetroSaudi cofounder, came across coverage of Low in the New York Post, he was livid. A security expert, Nawaf Obaid had spent decades at Washington think-tanks and advising Saudi ambassadors to the United States.
“Wow this is very dangerous, he needs to be curtailed cause at any moment he can lose his mind and blow the whole thing!” he wrote in an email to his brother.
Patrick Mahony and Tarek Obaid would have surely been happy to remain anonymous and enjoy their riches. For Low, such behavior would have rendered the scheme pointless. He desired to exist—and be seen—at the center of a powerful world. The very point, it seemed, was for him to get close to the rich and famous, and to publicize it, just as he had wanted his name on the sorority posters back at Wharton. In the days after his heist, Low was driven by the need to live among celebrities, as if this would validate his worth. In the future, he would see Hollywood as an investment opportunity. But right now, flush from the success of his scheme, Low just wanted to enjoy the thrill of buying his way into celebrity friendships. To do so, he had to figure out a way to cozy up to truly A-list Hollywood names. The key would be a pair of nightclub entrepreneurs named Noah Tepperberg and Jason Strauss.
The men were co-owners of Strategic Hospitality Group, a nightclub empire that included Avenue, as well as New York’s popular Marquee club and a part share in Las Vegas–based LAVO and TAO. Tepperberg and Strauss were among the country’s top nightlife entrepreneurs—Harvard Business Review had even conducted a case study of their operations. Now in their midthirties, the pair were native New Yorkers who had known each other since working as club promoters while still in high school. Strauss, who is tall and lean with a permanent tan, and Tepperburg, who is heavyset with a shaved head, made an odd couple, but they were nearly inseparable. After college, they began opening clubs in the Hamptons and New York. They realized clubs lived or died on who attended, and built databases of celebrities and big spenders.
The pair opened Marquee in 2003, and it quickly became the hottest place in town. On a Friday or Saturday night, to secure a spot at Marquee, with its huge video screens, modern lighting, and disco ball enclosed in a spherical frame, guests had to sign contracts to order a minimum of two bottles of champagne or liquor, costing hundreds or even thousands of dollars each. Hollywood celebrities like Leonardo DiCaprio and Tobey Maguire were regulars, and counted Tepperber
g and Strauss as friends. But the financial crisis of 2007 and 2008 had dented business, as Wall Street bankers shied away from dropping huge amounts in New York clubs. Low’s advent on the scene couldn’t have been better timed.
Tepperberg and Strauss had seen high rollers spend thousands, even tens of thousands of dollars at a time, but Low was on another level. He was willing to part with millions of dollars in a night. The duo, who also owned a successful events and marketing business, made themselves available to cater to Low’s every whim. Word of the big-spending Asian also began to spread around the Hollywood types who knew Tepperberg and Strauss.
It’s a little-discussed secret that even the biggest movie stars take payment to attend events, and Low began to seek out the managers of top actors, or pull on the Strategic Group’s network of club promoters, to get celebrities to his parties. The rumor that Low was a billionaire with unlimited funds made him an attractive person to know. Even for DiCaprio, one of the world’s top-paid actors, with a sizable fortune of his own, the scope of Low’s purported wealth was alluring. The night at the Palazzo in October 2009 was just the start of many parties the actor would enjoy with Low.
Low met DiCaprio through Danny Abeckaser, a club promoter for Strategic Group who was trying to carve out his own career as an actor. Top promoters like Abeckaser were powerful figures in the nightlife world, bringing in big-spending customers in return for a fee. While still at Wharton, Low had gained Abeckaser’s attention by laying out $3,000 in a night. Those sums had ramped up to $20,000, then $50,000. Now, Low thought nothing of putting down $1 million. No one had ever encountered such profligacy. The spending fed rumors among this nightclub set that Low was a new Asian billionaire looking to invest in Hollywood.
By early November 2009, fueled by the 1MDB money, Low was ready to take his socializing to the next level. It was his twenty-eighth birthday, and he wanted to mark his arrival on the Hollywood scene with a splash. The festivities ran over several days, including a party at the pool area of Caesars Palace in Vegas that featured caged tigers and lions, as well as bikini-clad models frolicking in the pool. Guests played carnival games set up at booths around the property. This was Low’s magic—to throw the craziest party, stunning even models and actors who were used to the most sumptuous events. Some of Low’s earliest Hollywood friends were there, including DiCaprio, the musician Usher, and Jamie Foxx, the actor and comedian.
On nights when he went clubbing, Low acted as much as a master of ceremonies as a reveler. Often, he would hold a microphone and order waiting staff to deliver Cristal champagne or Patrón tequila to the whole establishment, while only sipping on a Corona himself. A poor small-talker, he nonetheless developed a sense of showmanship, often shouting “Malaysia in the house” into his microphone. He had the Strategic Group staff draw up elaborate plans for events, including the smallest features of the decor, the flowers on display, and the alcohol behind the bar. He ensured the best-looking models were on hand to mingle with the guests.
Was there a justification for all this conspicuous consumption? To Low, it was part of a larger design. If the parties were successful, Low figured, he would grow in stature, enticing more powerful figures into his world. Even an up-and-coming rap star like O.T. Genasis, himself not short of cash and women, was in awe after witnessing Low one night buy multiple bottles of champagne costing $50,000 each.
“I’m like, ‘What?’ Never! This is not for real,” he said.
Surrounded by women who looked like they came straight from a Victoria’s Secret shoot, Genasis, who had accompanied Busta Rhymes to the party, was overwhelmed.
“I’ve never been in nothing like that.”
Low was partly a calculating showman, but he struggled to be present in the moment. He was afflicted by a deep-seated compulsion that drove him to spend more, acquire more, and move incessantly. Once, he went to a mall to get juice and returned home with eight identical pairs of black shoes. He bought Hermès Birkin bags, which start at $12,000 and go up to six figures, for friends, friends of friends, and even people he had just met.
“He was the biggest spender I’ve ever met in my life,” said one jet-setter along for the ride. “You could be having lunch in a restaurant in London and he’ll say who wants to have dinner in New York. Then he’d charter a jet and before you know it, you’re having dinner with the best wine of your life in Manhattan. Nothing was out of reach.”
In addition to his binge spending, people noticed another trait of Low’s: a seemingly photographic memory. Some friends noticed he had an ability to remember very specific details of what money was moving where, down to a decimal point. “He was always a bit extreme,” said one person who knew him.
In the autumn of 2009, the Malaysian was achieving something remarkable. In just a few short months, he had infiltrated the world’s most elite circles and was becoming friends with celebrities. Some of it came down to money—he was paying for stars to attend his parties. Partly, he knew how to throw an amazing event, and with the help of Strategic Group was building a reputation as a socialite. But he was also figuring out what motivated stars like DiCaprio, and how his money could assist them to do more than just party.
There was one star for whom partying and business were one and the same, a model and actor over whom he’d fantasized since his college days. It took Low no time to befriend her.
Chapter 11
Raining Cristal
Whistler, British Columbia, Canada, November 2009
Paris Hilton was getting increasingly agitated. Low had sent a leased private jet to LA to whisk her to Vancouver, the nearest international airport to Whistler, the Canadian ski resort, but it had sat for six hours on the tarmac while Canadian immigration decided whether to let her into the country. The holdup was due to Hilton’s legal history—a DUI conviction in the United States, which had garnered worldwide press attention. Eventually she was waved through, and Low’s staff ferried her to the Four Seasons. It was early ski season, and Low was treating Hilton.
Low had contacted Hilton’s manager a few months earlier and arranged for her to come along to his parties, for which she told friends that Low paid around $100,000 per event. But there was more to Low than simply cash, and Hilton, herself from money and with a blossoming television career, would grow close to him over the months ahead. Many people who got to know Low described him as kind and good-hearted, and his desire to please, to ensure everyone was having a good time, compared favorably with the arrogance that often accompanies extreme wealth.
Hilton brought along a friend called Joey McFarland, a native of Louisville, Kentucky, who had moved to LA a few years before and began helping his friends out in a business that hired stars for parties and events. Tall with short-cropped blond hair and an approachable, open manner that reflected his Southern upbringing, McFarland got to know Hilton through the talent-booking business. Only a few years earlier, he had been a small-time investor in a building in Cincinnati that housed a gyros restaurant, and his change in station made him eager to please, obsequious even. McFarland became close to Hilton, allowing her at one point to tweet from his account that she was a “celebrity princess.” He would run around taking photos of her at events. She gifted McFarland a Louis Vuitton toiletries bag.
At the hotel, Low was surrounded mainly by his family and Middle Eastern friends, including Al Wazzan, the Kuwaiti Wharton classmate, who bragged over drinks about a recent arms deal he claimed to have done, unsettling some of Hilton’s entourage. This was the first of what would become annual end-of-year ski vacations, paid for by Low to treat his closest friends and celebrities. Most of the group was just learning to ski—Low was taking snowboarding lessons—so Hilton, a practiced skier, spent most of the days on the slopes with other friends.
Riza Aziz, the stepson of Prime Minister Najib, also was present. He was short, balding, and rarely said much, but his calmness was alluring to women. He was a talented tennis player and posted pictures on Facebook of himself with stars
like Rafael Nadal. Relatively smart, he had entered banking after the London School of Economics, and had recently quit his job in the mergers-and-acquisitions department of London-based HSBC.
Rosmah’s child from an earlier marriage, Riza was a few years older than Low, and even though the pair had known each other for years, their relationship was polite and formal. Since coming into Najib’s orbit, Low was always careful to remain subservient to the prime minister, calling him “my PM,” and this extended to Rosmah and her son.
Now, Riza was living in Los Angeles, ready to help Low invest some of the money at his disposal, and that evening in Whistler led to an idea. A film buff, Joey McFarland had helped produce some low-budget movies since relocating to Los Angeles and for months had been telling friends about his desire to start a full-fledged production company. McFarland and Riza shared an interest in cinema, and immediately hit it off on the ski trip, bonding over movies. Riza was a fan of Italian postwar neorealistic cinema, while McFarland preferred contemporary films with Hollywood A-listers like Brad Pitt and Leonardo DiCaprio. Nonetheless, a connection had been made, and over the coming weeks Low, Riza, and McFarland got talking about an idea. Why not leverage Low’s money to get into the film business?
The rise of McFarland and Riza in the filmmaking world would be unexpected and meteoric. As he reinvented himself, McFarland soon would be disavowing his talent-booking past, even to those closest to him. And like others, amid the excitement of money and recognition, he would ask very few questions about the origin of Low’s funds.
On February 20, 2010, a Saturday night, a few months after the Whistler getaway, Paris Hilton laughed while putting down bets on the baccarat table at a private room on the floor of the Palazzo in Vegas. In a matching white dress and heels, with Chanel earrings and her hair parted tightly to one side, she was celebrating her twenty-ninth birthday, carrying herself with the assurance of wealth. But even such a monied heritage—her family had founded the Hilton hotel chain—had not prepared her to sit in front of a quarter-million dollars in gambling chips.