Saints or Sinners: Whistleblowers' Difficult Position in the Asia-Pacific Region

FROM THE ARCHIVES

Sarah Hofmann
ACFE Public Information Officer

Whistleblowers can be divisive characters. Celebrated by some as heroes and denounced by others as snitches, few other elements that come up during a fraud investigation can spark such polarizing labels. During her session at the 2016 ACFE Fraud Conference Asia-Pacific, Jessica Sidhu, CFE, Llb, explored the precarious position whistleblowers are in. “Is a whistleblower a good person or a bad person? Is he a traitor or is he a patriot?” she asked the audience. “Only when you’ve answered this question will you be able to take a whistleblower seriously.”

The topic was especially pertinent to discuss during the conference in Singapore, as the government of neighboring Malaysia has been involved for a few years with the 1Malaysia Development Bhd (1MDB) scandal. Global investigators believe that millions of dollars from the state investment fund 1MDB entered Malaysian Prime Minister Najib Razak's personal bank accounts.

Sidhu herself was formerly head of administration and finance at the Malaysian Attorney-General's Chambers (AGC) and was involved with a special task force investigating various financial cases, including a probe into 1MDB. She was reportedly fired “suddenly” in late 2015 and had her permanent residency revoked by the Immigration Department of Malaysia.

During her remarks at the conference, Sidhu discussed Andre Xavier Justo, a former PetroSaudi International executive who is believed to be the main whistleblower in the 1MDB case. He allegedly leaked documents to independent media site Sarawak Report, which established a link between Prime Minister Najib and the missing funds from 1MDB. Justo is currently in jail but is expected to be pardoned at the end of 2016.

Sidhu explored the challenges that whistleblowers face from the very first decision they make: whether to tell someone what they know or suspect. She said, “Sixty-five percent of whistleblowers are insiders and eighty percent of them have approached [their bosses or oversight bodies] internally, but were rejected or turned back.”

It is common for even the most well-intentioned investigators to ignore or discount the reports of whistleblowers for a variety of reasons. Sidhu described a situation her team experienced where one male employee made multiple reports against a female coworker for suspected fraud. Each report was investigated; however they were unable to find any evidence to back up his claims until the tenth report.

Read the full article in The Fraud Examiner, the ACFE's monthly newsletter, archives on ACFE.com.

Clare Rewcastle Brown to Discuss Money-Laundering Controls Learned from 1MDB Scandal

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Sarah Hofmann
ACFE Public Information Officer

“I think this whole offshore financial structure that’s been allowed to grow like a canker … the whole thing’s got out of control,” said investigative journalist Clare Rewcastle Brown in an interview with the Association of Certified Fraud Examiners (ACFE). 

Rewcastle Brown founded The Sarawak Report and Radio Free Sarawak in 2010 to disseminate news that concerned the Sarawak region of Malaysia and eventually, news surrounding the emerging 1MDB (1Malaysia Development Bhd) scandal. In August 2015, a warrant for her arrest was issued by a Malaysian court for "activities detrimental to parliamentary democracy" and the "dissemination of false reports."

“I think we’re seeing a swing of the pendulum and I think 1MDB’s just kind of cropped up perhaps at the right place at the right time … governments across the world have started to realize that they’ve lost control and populations have lost patience,” she said.

Rewcastle Brown will address anti-fraud professionals from across Europe at the 2017 ACFE Fraud Conference Europe in London, March 19-21. Despite having an arrest warrant issued for her by a Malaysian court, Brown remains optimistic that corruption on a global scale can be defeated. She said, “I do think we’re seeing a lashback and 1MDB is going to be just one example of enforcement agencies hitting back.”

Despite not being able to attend the 2016 ACFE Fraud Conference Asia-Pacific last November in Singapore due to safety concerns, she is committed to speaking in-person at the conference in London. She plans to lay out the intricate timeline of the 1MDB scandal that allegedly began in 2009 and runs through present day.

1MDB is currently being investigated by Swiss, Singh and U.S. authorities. In a question-and-answer session after her prepared remarks in Singapore, Rewcastle Brown addressed what controls she thought could help prevent this type of large-scale money laundering. “I think this case is really an opportunity to hold banks and players in these actions seriously to account. And to make the actors who have broken the rules pay the penalty, seriously. [They should be] absolutely exposed, shamed and embarrassed because we need to put off future, potential situations like this arising again,” she said. “I think that’s the best we can hope to come out of this. By showing at last, that the financial regulators have teeth and that they’re catching up to the global criminal element who have been using our offshore system and far-too compliant financial organizations. If we can get ahead of them, maybe that’s the best way to deal with this particular problem.”

Find out more about the upcoming 2017 ACFE Fraud Conference Europe, and register by February 17 for early registration discounts, at FraudConference.com/Europe.

1MDB Journalist to Keynote ACFE Asia-Pacific Fraud Conference

FRAUD CONFERENCE NEWS

Sarah Hofmann
ACFE Public Relations Specialist

One of the keynote speakers for the 2016 ACFE Fraud Conference Asia-Pacific, Clare Rewcastle Brown, is all too familiar with the reach of global corruption. Rewcastle Brown is an investigative journalist who has begun a heated international dialogue by publishing accounts alleging corruption occurring in Malaysia. Brown founded the Sarawak Report and Radio Free Sarawak in 2010 to first highlight local deforestation occurring in the Sarawak region of Malaysia. That led her to uncover a system of kickbacks between the logging companies and local officials.

In 2013, her investigations turned from deforestation to exposing potential bribery and theft involved in a Malaysian public development fund, 1Malaysia Development Bhd (1MDB). She obtained leaked materials from an employee of PetroSaudi, an investor in the 1MDB fund, which showed USD 700 million that should have been invested in 1MDB ended up in the personal account of the Prime Minister of Malaysia, Najib Razak.

While 1MDB was created and marketed as a fund set up for furthering Malaysian growth and infrastructure, Rewcastle Brown began uncovering how the fund was drained and moved into various shell companies that benefited a few investors. Multiple banks have been tied to the scandal, including Goldman Sachs, which led a number of outside countries, including the U.S., Singapore and Switzerland, to launch their own investigations into the fund.

Despite having an arrest warrant put out for her in Malaysia and dealing with potential stalking in her home base of London, Rewscatle Brown remains optimistic about what her investigations in 1MDB mean for corruption on a greater scale.

"I think we're seeing a swing of the pendulum. I think that 1MDB has cropped up at perhaps the right place, the right time," she said. "This whole off-shore financial structure that's been allowed to grow ... the whole thing's got out of control and I think governments all over the world are starting to realize they've lost control."

Be sure to register to hear her speak in Singapore, November 20-22 during the 2016 ACFE Fraud Conference Asia-Pacific and find out more about Rewcastle Brown in October in an exclusive interview on FraudConferenceNews.com.