Dive Brief:

• A federal judge Wednesday said she would pause the trial of former Goldman Sachs banker Roger Ng after prosecutors said they learned Tuesday night that a Justice Department unit did not share with them or Ng’s defense lawyers 15,500 emails and other documents belonging to the government’s star witness, Tim Leissner — Ng’s one-time boss.
• Ng’s lawyer, Marc Agnifilo, may seek a mistrial, he told the court, without the jury present. He also said he may ask for Ng’s charges to be dismissed over what he labeled government misconduct. "The government absolutely, absolutely, and admittedly at this point did not live up to its obligations," Agnifilo said in court, according to Reuters. "Evidence is coming in drips and drabs."
• Ng has pleaded not guilty to conspiring to launder money and to violate an anti-bribery law in connection with Goldman’s 1MDB scandal. He is likely the only person to stand trial in the U.S. because the scheme’s alleged mastermind, Jho Low, is believed to be living in China. Leissner pleaded guilty in 2018 for his part in the scandal. He is expected to be sentenced this summer.

Dive Insight:

Judge Margo Brodie of the U.S. District Court for the Eastern District of New York said she would adjourn the trial, which is in its second week, after prosecutors finish questioning Leissner. That process could stretch into next week.

“What’s particularly troubling to the court is that I sat here and asked the government if you did a thorough review and [if] all the relevant disclosures were made,” Brodie said, according to The Wall Street Journal.

“I am going to give the defense as much time as they need,” Brodie said, according to The New York Times, cautioning she could not delay the trial indefinitely. The break is likely to last several days and pick up with the defense cross-examining Leissner.

The Tuesday night discovery reveals a government pattern of withholding evidence, Agnifilo said, adding he has complained for 2½ years about the “slow-walking” of pertinent information in the case. As the trial began, the government belatedly turned over 120,000 pages of emails and other documents belonging to Leissner, he said.

“We are still going over the 120,000 pages we got,” Agnifilo said, according to The New York Times. “This is a categorical failure.”

Prosecutors blamed the more recent error on another team of government lawyers tapped with reviewing the Leissner documents to ensure they wouldn't violate the witness’s rights.

Prosecutor Alixandra Smith, in a letter to the court Wednesday, called the misstep “inexcusable” and said the team supports adjourning the trial while defense lawyers review the evidence.

Goldman Sachs admitted wrongdoing and agreed in 2020 to pay $2.9 billion to the Justice Department and regulators in the U.K., Singapore and Hong Kong to resolve the 1MDB scandal. In a separate settlement, the bank agreed to pay the Malaysian government $2.5 billion and guaranteed the recovery of $1.4 billion in seized assets. Goldman clawed back $174 million in executive pay over the bank's involvement in the matter.

Between 2009 and 2014, Goldman collected roughly $600 million in fees for helping the Malaysian government raise $6.5 billion for the 1MDB economic development fund by selling bonds to investors. But about $4.5 billion of that was diverted, and prosecutors have argued Goldman bankers bribed officials to win the business.

Leissner testified he and Ng held integral roles in the plot. Leissner said he and his family received between $50 million and $60 million in kickbacks from the scheme. Prosecutors have accused Ng of receiving $35 million in kickbacks. 

However, Agnifilo said some of the evidence he has reviewed counters that claim, asserting Leissner’s now-ex-wife, Judy Chan, owed that money to Ng’s wife as part of an unrelated business transaction. Chan owns a large vineyard in China.

As part of his own court agreements, Leissner has promised to forfeit about $47 million of his 1MDB gains. Leissner testified he used $10 million of the looted money to buy a house for a former girlfriend so she wouldn't alert authorities to his dealings.