Billion Dollar Whale

by Tom Wright

  Martin Scorsese, the legendary film director who had worked with DiCaprio on a number of projects, was frustrated. Even though he was at the apex of his career—recently clinching his first directing Oscar for The Departed—he could not control the studios. He’d spent five months annotating Winter’s script in preparation for filming and grumbled to people in the industry that it was wasted time. In the midst of this stalemate, Jho Low entered DiCaprio’s orbit. The Malaysian’s money offered an alternative solution, one that could provide DiCaprio and Scorsese with the Hollywood holy grail: boundless financing coupled with unfettered artistic control.

  In September 2010, Riza Aziz and Joey McFarland set up Red Granite Productions (it would later change its name to Red Granite Pictures), operating at first out of a suite of rooms in the L’Ermitage hotel in Beverly Hills. Aziz was appointed chairman, and McFarland became vice chairman. As per his habit, Low took no official title. He left the day-to-day running of the firm to others. He was the secret money. The firm soon announced it had hired a number of executives from Millennium Films, including Joe Gatta, to head production. From day one, there was a furtiveness about finances. McFarland informed staff that Low was an investor, but that the Malaysian, Riza, and McFarland would stay in the background.

  “That’s why we’d hire someone like you,” McFarland told one of the Red Granite executives.

  A few months later, Red Granite’s offices were ready, in the same low-rise building on the Sunset Strip where DiCaprio’s production company, Appian Way, was located. It wasn’t a coincidence. “They chose to be in Leo’s building because they wanted to be close to him and be in business with him,” the Red Granite executive said.

  The plan was to coproduce The Wolf of Wall Street, and Red Granite bought the film rights to Jordan Belfort’s memoir for $1 million. Suddenly, Low was no longer just a guy who threw flashy parties. Through McFarland and Aziz, he was a player in Hollywood.

  Chapter 18

  Two-Million-Euro Bottle Parade

  Saint-Tropez, France, July 2010

  It was Fleet Week in Saint-Tropez, and the world’s superyachts vied for berthing space at the town’s marina. In July and August, the resort on the French Riviera, centered around a warren-like medieval old town of ochre-colored houses and old churches, is heaving with the world’s richest people. They flock to the town for parties on yachts and in the town’s bars and the daytime carousing at the clubs on nearby Pampelonne beach.

  Tourists walking along the Quai Jean Jaurès gawp at the yachts backed up right next to a line of cafés. It’s an annual display of concentrated wealth unsurpassed anywhere, as crews of young deckhands run around polishing balustrades, while onlookers try to see who is on board. For many, these boats represent the pinnacle of success. Yet the real parties of Saint-Tropez happen far from the tourist hordes. While regular folk get caught in horrendous traffic jams trying to reach town, located on the end of the peninsula, the pampered set are ferried in on motorized skiffs. The hottest nights take place on yachts out at sea, or in the town’s exclusive clubs, where A-list celebrities mingle with billionaires.

  The most illustrious of all is Les Caves du Roy, a fixture on the world party scene since the 1960s. Every inch of the club, situated in the basement of the Hotel Byblos, just a few hundred meters back from the port, is covered in gold. There are golden columns, which end in waves of fluting, a parody of the Corinthian style meant to evoke champagne bursting from a bottle. The dance floor is golden, as are the tables on which are perched gold leaf–covered cocktail bowls. Here, late on July 22, not even two weeks since the World Cup final in South Africa, Jho Low was engaged in a bidding war.

  He’d sailed into town a few days earlier, with Paris Hilton still in tow, on the Tatoosh, a 303-foot, ten-cabin superyacht, complete with swimming pool and helicopter pad, owned by Microsoft cofounder Paul Allen. These were the days of bottle parades, an invention by clubs to get “whales” to spend even more money by ordering multiple magnums—or even jeroboams—of champagne. If the order was big enough, bottle girls—usually models earning extra cash—would bring out the champagne with sparklers attached, as the DJ cut the music and lauded the buyer. Back in New York, Low’s spending had helped popularize these parades.

  Even by the usual standards, this bottle parade tonight was going to be unseemly. Dressed in a black polo shirt with a checkered collar and grey slacks, a Rolex on his arm, Low had become entangled in a battle with Winston Fisher, whose family were in New York real estate, to see who was willing to pay the most for Cristal champagne. A year earlier, before Low got his hands on serious money, he had lost out in this exact venue during a similar bidding war with a Belgian billionaire of Pakistani descent. Not this time.

  As the revelers looked on in awe, with an emcee overseeing the escalating war of affluence, Low and Fisher matched each other as the bids mounted. With no signs the Malaysian would bow out, Fisher caved. As the bill was announced over the stereo system, revelers in the club couldn’t believe what had occurred. Low had just spent 2 million euros on champagne—an amount of alcohol that the whole club couldn’t possibly finish off in a week of drinking.

  As the frantic staff produced bottle after bottle of champagne—including jeroboams and methusalehs—Low’s coterie, which included wealthy Russians, Arabs, and Kazakhstanis, cheered with pleasure. Paris Hilton, wearing a short blue dress with polka dots, blue pendant earrings, and pink nail polish, got up on a table near a gold column and began opening a bottle, spraying the contents over Low and others. A ruddy-faced and sweat-damped Low was photographed with his head laying on Hilton’s shoulder.

  Days later the pair was in another club, with yet another bottle parade. As the champagne came out with sparklers attached, the theme music from Rocky and Star Wars blaring, Low took control. Handed a microphone, he directed waiters to ensure everyone in the club got a bottle. “Saudi Arabia in the hoouuussse,” he yelled, as Hilton danced and embraced him from behind. She was so drunk that other partygoers had to support her. Both Hilton and Low, who sported a white fedora, were drenched in champagne, as alarmed-looking security guards tried to make space around them.

  As one Kuwaiti friend put it, Low excelled at making people feel like they were included in the most exclusive of circles. But amid all the revelry, he was also hard to know, more like a compère. The friend came to believe he was taking part in a charade of wealth, rather than genuinely having fun.

  “It felt fake and as if we were just there to go through the motions and entertain and look cool as a group,” he said.

  The spectacle in Saint-Tropez garnered widespread paparazzi coverage, and gossip writers speculated Low was Hilton’s latest boyfriend. Although he appeared intimate with Hilton at the parties, he told friends they were never physically involved. Instead, another woman had captured his imagination.

  The Rolls-Royce rolled up at Dubai’s Atlantis, the Palm, a towering hotel located on one the city’s islands, a series of man-made landmasses that from the air look like palm fronds in the sea. The main building was framed around a gigantic Arabian-style arch, with multiple pools and 360-degree views of the Persian Gulf. It’s a decadent place, and Low, a few months after his French vacation, had taken over part of the resort’s private beach for an elaborate ceremony. Accompanying him in the Rolls was Elva Hsiao, a thirty-one-year-old Taiwanese pop star. Wearing white pants, a light blue shirt, and slip-on leather shoes without socks, Low escorted Hsiao, also dressed informally in a striped skirt and sandals, from the car. They stood hugging around the waist, as Low pointed out candles that had been set up on the beach in the shape of a gigantic heart. A light display behind the candles spelled out their names.

  Low then led Hsiao to a long dining table, bedecked with flowers and more candles, and placed on a raised platform, behind which the planners had erected an intricately carved screen. As they began to dine on a multicourse tasting menu, a blonde musician in a blue evening dress played a harp set up next to the table,
later switching to a jewel-encrusted violin. Hsiao looked nervous and began to giggle. Low slipped his arm around her in a stiff embrace. There was little conversation.

  It was time for the grand finale. Suddenly, a helicopter hovered into view. As it neared the beach, two men parachuted out, each wearing a smart tuxedo and bow tie. Landing on the beach, inside the heart made of candles, the men unhooked their parachutes and strode up to the table. Smiling, they presented Hsiao with a box. Inside was a Chopard necklace holding a round pendant made from diamonds and gold. After dinner, the pair watched a special fireworks display, set off from a boat anchored off the island.

  It was a gaudy, laughably clichéd exhibition of love, and as the ostentation piled up, Hsiao wiped a tear from her eye. The event had reportedly cost more than $1 million to stage, and it was a date, not even a marriage proposal.

  As it turned out, Low already had a girlfriend, a woman called Jesselynn Chuan Teik Ying, whose father owned a seafood restaurant back in Penang. Low often flew her out to the United States, but he told McFarland, who was increasingly acting as a kind of catchall fixer for Low, to keep her away from the partying. Instead, she would be sequestered in a hotel or one of Low’s apartments, accompanied by the other females in his inner circle, women like Catherine Tan, a former Vegas croupier who organized Low’s schedule, and Jasmine Loo, 1MDB’s legal counsel. Back in Malaysia, visitors to Low’s Kuala Lumpur apartment noticed Chuan acted deferentially, serving drinks on bended knee. While Low treated her respectfully in public, he was also in the habit of making gifts of luxury cars and jewelry to other women, and paying for models to mill around at parties in hotel suites, clubs, and on yachts.

  It was clear to Low’s friends that he was cheating on Chuan, as he began to rub up against more famous individuals like Elva Hsiao. Chuan found out about Hsiao—she came across a book the Taiwanese singer had gifted Low—but decided not to break things off. Chuan, too, seemed taken with the glitzy change of station Low now afforded. At one point, she showed friends back in Penang a new watch, a gift from Low she said once had belonged to the singer Usher.

  Low told friends he was torn by the duplicity in his life, between maintaining a girlfriend and the other women. His relationship with Chuan had been on and off for years. But he wasn’t a typical playboy. Some of the models whom Low regaled with Cartier jewelry or gambling chips were astonished he never hit on them. Far more than sex, it seemed, he craved recognition, whether from women or Hollywood stars, and he sought to create spectacles that reinforced his power and prestige.

  Extreme by any standard measure, the Dubai episode was merely a foreshadowing of what was to come. Low already was one of the most unhinged spenders anyone had encountered, but he was about to switch it up a gear.

  If his spending was winning him friends in Hollywood, others were perplexed by the way Low drew attention to himself. For many of Low’s business associates, his showy displays of wealth were hard to swallow. It was as if the same compulsive nature that made his scheme take off—Low’s ability to procure the biggest and best of anything, be it a yacht or a Hollywood star—was also his Achilles’ heel. By 2010, Otaiba, the UAE ambassador to Washington, was becoming unnerved by Low’s public antics.

  “He really needs to calm down and stop partying so much,” Otaiba complained in an August 4, 2010, email to a friend.

  Like many of Low’s contacts, Ambassador Otaiba wanted to keep his dealings with the Malaysian discreet. When Low asked Otaiba to act as a reference to help him open a private bank account with Goldman, the ambassador wondered in an email to Shaher Awartani, his business partner, whether such a letter would be “considered liable.” Low had told Awartani that banks were starting to question the hundreds of millions of dollars flowing through his accounts.

  Ultimately, Goldman rejected Low’s request to open a private wealth account at the bank, which required at least $10 million in deposits, because it was unable to ascertain his source of funds. This was a private wealth-management business, far removed from Leissner. But these actions did not stop Otaiba or Goldman’s investment bank, where the German banker worked, from interacting with Low on lucrative deals in the future.

  Prime Minister Najib Razak, too, believed Low needed a more serious image. Low told Awartani his “boss”—meaning Najib—had suggested Low join several prominent government advisory boards to rebrand himself as a credible businessman.

  Back in Penang, where the New York Post article about Low’s clubbing habits had raised eyebrows, Larry Low was furious and ordered a damage-control strategy for his son. After his French vacation in the summer of 2010, Low flew back to Penang, and, dressing in a conservative black suit with a light blue tie, gave a lengthy interview to a local English-language newspaper, the Star.

  He spun a web of fiction, telling the reporters that he had started Wynton, his private investment vehicle, with $25 million in capital from his rich friends from Harrow and Wharton, and that the firm’s assets now stood in excess of $1 billion. He attempted to pass off the nightclub spending covered by the New York Post as really that of his rich Middle Eastern friends, describing himself as merely a “concierge service” who catered to their whims.

  “I come from a fairly okay family but nowhere as close to the prominence and wealth levels of the people I usually spend time with, who also are my very good friends,” he told the Star. His business success was “attributable to being at the right place and right time and meeting the right people, coupled with a trusting relationship.”

  At home, Low knew he couldn’t get away with the story he told abroad: that he came from a billionaire family. Now his stories were starting to collide into one another. Any potential investor overseas who heard Low boast that he was from old money in Asia need only have perused the Star’s interview, easily available online, to know something was wrong. But no one, it seemed, bothered to do even this cursory research. As for the spending at Les Caves du Roy, Low contended it was his group, not him, that had purchased the champagne.

  “We all work very hard,” he said. “I am not an excessive person but I do have my breaks for relaxation with friends.”

  In private, Low shrugged off the media coverage of his parties, as if his reckless behavior was of no import. “I am not stupid. I know the issues with media and I am dealing with it,” he told Patrick Mahony of PetroSaudi in a BlackBerry message. With so much cash in his pocket, and a bevy of celebrity friends, Low was starting to believe he would never get caught.

  Some of Low’s allies were not so easily placated. There was dissension among the conspirators.

  Chapter 19

  “Keep Your Nonsense to Yourself”

  Montreux, Switzerland, October 2010

  Perched on a hill on the shores of Lake Geneva, Clinique La Prairie is considered one of the world’s preeminent medical centers and spas. Located in the Swiss town of Montreux, the clinic’s original mansion, constructed in the Swiss-chalet style with a widely projecting roof, is surrounded by a French formal garden and a collection of elegant modern buildings. From the rooms, guests have unobstructed views of Lake Geneva, framed by towering snow-topped Alpine peaks. Founded in 1931 by a professor named Paul Niehans, whose pioneering “cellular therapy” soon attracted the rich and famous, including Charlie Chaplin, the clinic’s website described itself as “the expert in longevity.”

  In October 2010, Low checked into the clinic for a respite. Owing to his unwholesome lifestyle—a predilection for alcohol-fueled late nights, buckets of KFC chicken, and nonstop travel—Low knew he was out of shape. He stopped short of regular exercise, but was happy to buy expensive juice cleanses that came with a glass straw, and was now seeking out the most cutting-edge treatment money could buy—and that meant Clinique La Prairie.

  Mortality and aging cast a shadow across everyone’s life, but the überwealthy have a better chance of cheating death. For $30,000, the clinic offered a weeklong revitalization program during which patients were fed an extract derived
from the livers of fetuses of black sheep. The process supposedly helped to revitalize dormant cells. This wasn’t the first time Low had checked into a high-end medical spa, hoping, perhaps, for a brief escape from the stresses of his scheme. He’d been feeling a little under the weather and on this occasion was undergoing sinus surgery to help his breathing. But even here, surrounded by the world’s top doctors, business was calling.

  A few days after Low checked into the clinic, Goldman’s Tim Leissner arrived to discuss possible investments. The German banker saw how much money 1MDB supposedly had put into the joint venture with PetroSaudi and was looking for ways for Goldman to get a piece of the action. Until now, the fund had mainly raised money from Malaysian bank loans and local debt sales, but Leissner was taking steps to position Goldman to win the lucrative business of helping 1MDB tap vastly larger international capital markets.

  Having evidently brushed aside his earlier misgivings about Low, Leissner was now cozying up to the Malaysian, hoping to get his bank involved in the billion-dollar flows emanating from this fund. Leissner had a problem, though. Goldman’s private bank in Switzerland had turned down Low’s request to open an account due to concerns over the origin of his funds. Yet the German knew Low was front and center at 1MDB, even though he played a strange behind-the-scenes role, including hosting meetings at locations such as Clinique La Prairie rather than the 1MDB fund’s offices in Kuala Lumpur. Leissner would have to find a way to navigate these issues and keep Goldman involved in the fund’s business.