Billion Dollar Whale Read online

  Swizz Beatz called for quiet in the hotel suite, before presenting expensive DJ equipment, emblazoned with images of a panda, to Low as a gift. The group burst into laughter. That was what Low’s closest friends called him—“Panda”—a nod to his plump frame and cuddly demeanor. He’d loved Kung Fu Panda, and when gambling with his close friends from back home they’d each pretend to be a character from the film. But even those stars like Pras and Swizz Beatz, who had received multiple millions of dollars in appearance fees and other business deals from Low, could not really claim to know his story. If you entered “Jho Low” into Google, very little came up. Some people said he was an Asian arms dealer. Others claimed he was close to the prime minister of Malaysia. Or maybe he inherited billions from his Chinese grandfather. Casino operators and nightclubs refer to their highest rollers as “whales,” and one thing was certain about Low: He was the most extravagant whale that Vegas, New York, and St. Tropez had seen in a long time—maybe ever.

  A few hours later, just after 9 p.m., Low’s guests began the journey to the evening’s main event. To avoid the paparazzi, they strode through staff-only areas, including a kitchen, before emerging into a concrete tunnel leading to the hotel’s parking garage. A fleet of black limousines stood ready, engines purring. This was a special arrangement the Palazzo permitted for only its most lucrative guests.

  Every move felt seamlessly scripted, doors opening at the right moment and young, smiling women gesturing the way. As the limousines drove up the Strip, it was clear they weren’t heading to the desert, as some guests thought, instead pulling up at what looked like a giant aircraft hangar, specially constructed on a vacant parcel of land. Even the VIPs were in the dark. The cars sailed through security checkpoints before stopping at a red carpet entrance, manned by burly security personnel in black suits and the first of scores of young models wearing red dresses, some of whom handed out drinks and food, while others—in the crude language of nightclubs—acted as “ambient” decorations.

  This was how the super-VIPs arrived, but most of the three hundred or so guests, some clutching bright red invitations with “Everyday Birthday” stylishly rendered in gold lettering, checked in earlier at LAVO nightclub in the Palazzo or at a security post. There, they signed nondisclosure agreements, binding them to secrecy, and handed in their phones, before getting into minibuses for the short distance to the venue. Among them was Robin Leach, who for decades, as host of the TV show Lifestyles of the Rich and Famous, had chronicled the spending of rappers, Hollywood stars, and old-money dynasties. But that was the 1980s and 1990s, and nothing had prepared him for the intemperance of the night. A gossip columnist for the Las Vegas Sun, Leach was among the few guests who had gleaned some details of what was coming. “Wicked whispers EXCLUSIVE: Britney Spears flying into Vegas tomorrow for secret concert, biggest big bucks private party ever thrown,” he tweeted.

  One puzzling requirement of Leach’s invitation was that he could write about the party, but not name the host. He’d made his career from the desire of rich people to brag about their affluence; what made this guy want to spend so much cash in secret? he wondered. A nightlife veteran, Leach was stunned by the audacity of the construction on the site. As he surveyed the arch of the party venue, which was ample enough to house a Ferris wheel, carousel, circus trampoline, cigar lounge, and plush white couches scattered throughout, he did some calculations. One side was circus themed, with the other half transformed into an ultrachic nightclub. With the lighting, and devices that sent explosions of fire into the air periodically, it felt like a major concert, not a private event.

  It must have cost millions, Leach estimated. Here were new lovers Kanye West and Kim Kardashian canoodling under a canopy; Paris Hilton and heartthrob River Viiperi whispering by a bar; actors Bradley Cooper and Zach Galifianakis, on a break from filming The Hangover Part III, laughed as they took in the scene. It was rare to get so many top actors and musicians together at a single event outside of a big awards show. “We’re used to extravagant parties in Las Vegas, but this was the ultimate party,” Leach said. “I’ve never been to one like it.”

  As the guests chatted, Cirque du Soleil–type entertainers walked among them on stilts, while acrobats in lingerie swung on hoops overhead. There were several monster trucks parked on the fringes and a troupe of about twenty little people dressed as Oompa-Loompas beating a path through the revelers. In a cordoned-off VIP area, Low held court with DiCaprio and Martin Scorsese, who was directing The Wolf of Wall Street. As the night wore on, other guests came by, including Robert De Niro, Tobey Maguire, and Olympic gold medalist Michael Phelps.

  Not every guest that night was a celebrity. Low was careful not to overlook his less well-known friends and key business contacts. Among them were Tim Leissner, a German-born banker who was a star dealmaker for Goldman Sachs in Asia, and Mohamed Al Husseiny, the CEO of one of Abu Dhabi’s richest investment funds. There were whispers among Wall Street bankers about the huge profits Goldman had been making in Malaysia, hundreds of millions of dollars arranging bonds for a state investment fund, but they hadn’t reached insular Hollywood. Low’s usual entourage was on hand as well, including “Fat Eric,” whom the Malaysian had gotten to know from the nightclub world in Malaysia, his cousin Howie, and older brother Szen.

  Waitresses handed out mini-bottles of champagne with straws. Bartenders, standing behind the twenty-four-foot ice bar, doled out top-shelf liquor and flutes of Cristal. The crowd was already lively when Jamie Foxx started off the show with a video projected on huge screens. It appeared as if friends from around the world had volunteered to help make a surprise birthday video for their good friend Low, each dancing a bit of the hit song “Gangnam Style.” Investment bankers from Low’s Hong Kong–based investment company performed in a conference room. Al Husseiny danced on a jet ski off Abu Dhabi. In truth, the video was partly Low’s idea, and like every aspect of the evening, from the color of the flowers to the drinks at the bar, it had been carefully orchestrated at his direction. Although the clips came as little surprise to him, Low was beaming.

  As the video ended, Psy, the South Korean singer who had shot to stardom that year for “Gangnam Style,” played the song live as the crowd erupted. Over the following hour and a half, there were performances from Redfoo and the Party Rock Crew, Busta Rhymes, Q-Tip, Pharrell, and Swizz Beatz, with Ludacris and Chris Brown, who debuted the song “Everyday Birthday.” During Q-Tip’s session, a drunk DiCaprio got on stage and rapped alongside him. Then, a giant faux wedding cake was wheeled on stage. After a few moments, Britney Spears, wearing a skimpy, gold-colored outfit, burst out and, joined by dancers, serenaded Low with “Happy Birthday,” as a troupe of women began doling out slices of real chocolate cake. Each of the performers earned a fat check, with Spears reportedly taking a six-figure sum for her brief cameo.

  Then the gifts. The nightlife impresarios who helped set up the party, Noah Tepperberg and Jason Strauss, stopped the music and took a microphone. Low had spent tens of millions of dollars in their clubs Marquee, TAO, and LAVO over the past few years, just as the financial crisis hit and Wall Street high rollers were feeling the pinch. He was their number one client, and they did everything to ensure other nightclub owners didn’t steal him away. As Tepperberg and Strauss motioned to staff, a bright red Lamborghini was driven out into the middle of the marquee. Someone gave not one but three high-end Ducati motorcycles. Finally, a ribbon-wrapped $2.5 million Bugatti Veyron was presented by Szen Low to his brother.

  Even the low-end presents were elaborate. A former talent booker whom Low had helped transform into a big movie producer, Joey McFarland, presented Low with a custom wine box with an image of Kung Fu Panda from the animated film, and the words “Vintage 1981” and “Product of Malaysia” engraved in wood. It came with a $1,000 bottle of 1981 Petrus wine, made the year of Low’s birth. Just after 12:20 a.m., the sky lit up with fireworks. Partying went into the early hours, with performances by Usher, DJ Chuckie, and Ka
nye West. Surrounded by celebrities and friends, Low piled into a limousine and brought the party back to the Palazzo, where he gambled well into the bright light of Sunday afternoon.

  This was the world built by Jho Low.

  “While you were sleeping, one Chinese billionaire was having the party of the year,” began an article on the website of local radio station KROQ two days later, mistaking Low’s nationality. It referred to him as “Jay Low.” It wasn’t the first time Low’s name seeped into the tabloids or was associated with extravagance—and it wasn’t the last—but the Vegas birthday party was a peak moment in his strange and eventful life.

  Many of those who came across Low wrote him off as a big-talking scion of a rich Asian family, a spoiled princeling from the booming region and economy of “Crazy Rich Asians.” Few people asked questions about him, and those who bothered to do so discovered only fragments of the real person. But Low wasn’t the child of wealth, at least not the kind that would finance a celebrity-studded party. His money came from a series of events that are so unlikely, they appear made up. Even today, the scale of what he achieved—the global heists he pulled off, allowing him to pay for that night’s party and much, much more—is hard to fathom.

  Low might have hailed from Malaysia, but his was a twenty-first-century global scheme. His conspirators came from the world’s wealthiest 0.1 percent, the richest of the rich, or people who aspired to enter its ranks: young Americans, Europeans, and Asians who studied for MBAs together, took jobs in finance, and partied in New York, Las Vegas, London, Cannes, and Hong Kong. The backdrop was the global financial crisis, which had sent the U.S. economy plummeting into recession, adding to the allure of a spendthrift Asian billionaire like Low.

  Armed with more liquid cash than possibly any individual in history, Low infiltrated the very heart of U.S. power. He was enabled by his obscure origins and the fact that people had only a vague notion of Malaysia. If he claimed to be a Malaysian prince, then it was true. The heir to a billion-dollar fortune? Sure, it might be right, but nobody seemed to care. Not Leonardo DiCaprio and Martin Scorsese, who were promised tens of millions of dollars to make films. Not Paris Hilton, Jamie Foxx, and other stars who were paid handsomely to appear at events. Not Jason Strauss and Noah Tepperberg, whose nightclub empire was thriving. Not the supermodels on whom Low lavished multi-million-dollar jewelry. Not the Wall Street bankers who made tens of millions of dollars in bonuses. And certainly not Low’s protector, Malaysian Prime Minister Najib Razak.

  Low’s scheme involved the purchase of storied companies, friendships with the world’s most celebrated people, trysts with extraordinarily beautiful women, and even a visit to the White House—most of all, it involved an extraordinary and complex manipulation of global finance. As of this writing, the FBI is still attempting to unravel exactly what occurred. Billions of dollars in Malaysian government money, raised with the help of Goldman Sachs, has disappeared into a byzantine labyrinth of bank accounts, offshore companies, and other complex financial structures. As the scheme began to crash down around them, Malaysia’s prime minister turned his back on democracy in an attempt to cling on to power. Wanted for questioning by the FBI, Low disappeared into thin air.

  Jho Low’s story epitomizes the shocking power of those who learn how to master the levers of international finance in the twenty-first century. How he thrived, and what it says about the failure of global capitalism, is the subject of this book.

  The story begins on the palm-fringed island of Penang.

  PART I

  THE INVENTION OF JHO LOW

  Chapter 1

  Fake Photos

  Penang, Malaysia, Summer 1999

  As he moved around the Lady Catalina, a 160-foot yacht docked at a government marina on Penang island, Jho Low periodically checked he wasn’t being observed. Stashed in his pocket were a handful of photographs of his family: his father, Larry Low, a businessman who had made millions of dollars through his stake in a local garment manufacturer; his mother, Goh Gaik Ewe, a proud housewife who doted on her children; and his two elder siblings. Locating photos of the boat’s owner, a Penang-based billionaire, he eased the snapshots one by one from their frames, replacing them with those of his own family. Later, he did the same at a British colonial-era holiday home on Penang Hill, which he also had borrowed from the billionaire, a friend of Low’s family.

  From Penang Hill, covered in rainforest, Low could see down to George Town, the British colonial capital named for George III, a warren of whitewashed mansions and crumbling Chinese shophouses. Beyond, the narrow straits that separated Penang island from continental Asia came into view. Situated at the mouth of the Strait of Malacca, an important sea lane linking Europe and the Middle East to China, Penang had attracted its share of adventurers, from British colonial officers to Chinese traders and other assorted carpetbaggers. The streets bustled with Penangites, mainly Chinese-Malaysians, who loved eating out at the many street-side stalls or walking along the seaside promenade.

  Low’s grandfather washed up in Penang in the 1960s from China, by way of Thailand, and the family had built a small fortune. They were a wealthy clan by any standard, but Low recently had begun attending Harrow, the elite boarding school in England, where some of his classmates counted their families’ wealth in billions, not mere millions.

  Larry’s shares in the garment company, which he recently had sold, were worth around $15 million—a huge sum in the Southeast Asian nation, where many people lived on $1,000 per month. But Low had begun to mix with members of the royal families of Brunei and Kuwait at Harrow, where he had arrived in 1998 for the last two years of high school. The Low home, a palm-tree-fringed modernist mansion on the north coast of Penang, was impressive and had its own central cooling system, but it was no royal palace.

  In a few days, some of Low’s new school pals would be arriving. He had convinced them to spend part of their summer vacation in Malaysia, and he was eager to impress. Just as his father had raised the family’s station in Penang, earning enough to send his son to one of the world’s most expensive boarding schools, so Low harbored ambitions. He was somewhat embarrassed by the backwater of Penang, and he used the boat and holiday home to compensate. His Harrow friends were none the wiser. With his pudgy frame and glasses, Low never found it easy to attract women, so he clamored to be respected in other ways. He told his Harrow friends he was a “prince of Malaysia,” an attempt to keep up with the blue bloods around him.

  In reality, the ethnic Chinese of the nation, like the Lows, were not the aristocrats, but traders who came later to the country in big waves during the nineteenth and twentieth centuries. The majority of Malaysia’s 30 million people were Muslim Malays, who typically treated the Chinese as newcomers, even if their families had lived in Malaysia for generations. Some of the older Chinese of Penang began to wonder about this strange kid. After Low’s Harrow friends had come and gone, the story of the photos began to circulate around the island, as did Low’s claims to an aristocratic lineage. People laughed over the sheer chutzpah. Who did this kid think he was?

  In the 1960s, Penang island was a ramshackle place. The British granted independence in 1957 to its colony of Malaya—a tropical Southeast Asian territory rich in tin and palm oil—after fighting an inconclusive and sapping war against a Communist insurgency. From their jungle redoubts near the Thai border, Communist rebels bided their time, and soon would start a years-long guerilla war against the untested forces of the newly established nation of Malaysia. This lawless frontier region was an area that Meng Tak, Low’s grandfather, knew well. He’d left his native Guangdong province in China in the 1940s—a time of great upheaval due to the Second World War, Japanese occupation, and a civil war that led millions to flee the country—and settled in southern Thailand, near Malaya. He made some money as a minor investor in an iron ore mine, and married a local woman of Chinese ancestry, before moving on again to Penang in the 1960s.

  The Low family lived in a modest bun
galow in George Town, the capital of Penang, just a few blocks back from the peeling British-era colonnaded villas and warehouses on the palm-fringed shoreline. Many Chinese had emigrated here during colonial times to trade in commodities like tin and opium, a narcotic whose sale the British had monopolized but which now was illegal. There were dark rumors in George Town’s close-knit community about the origin of Meng Tak’s money. Some old-timers remembered him running a cookware shop in the city. But perhaps the story about iron-ore mining in Thailand was only part of the truth. Others whispered that he’d made money smuggling opium over the border.

  For each version of the Low family’s history, there was an alternate recounting. Decades later, Low started telling his own story about Meng Tak, one he fabricated to explain how he was in possession of enormous wealth. The money, he told anyone who would listen, came from his grandfather’s investments in mining, liquor trading, and property. There was only one problem. Few in Malaysia—neither top bankers nor business leaders—had ever heard of this fabulously rich family. With Low’s father, Larry, the family story comes into sharper focus.

  Born in Thailand in 1952, Larry Low moved as a young child to Penang and went on to study at the London School of Economics and the University of California, Los Angeles, for an MBA. On returning to Malaysia, he took over Meng Tak’s business. Despite his elite school, Larry made a disastrous investment in the 1980s in cocoa plantations that almost wiped out the family wealth. After commodity prices dropped, he used what was left to buy a minority stake in a company that produced clothes for export to the United States and Europe. This time Larry hit the jackpot.