The U.S. Department of Justice has charged three senior employees of a Telekom Malaysia (TM) subsidiary with orchestrating a complex fraud scheme that misappropriated over $20 million. The charges, unsealed Tuesday, allege the individuals used forged documents and false statements to siphon funds for personal gain over a nearly six-year period.
"These three individuals are alleged to have conducted a deliberate and calculated embezzlement scheme, falsifying corporate records for their own financial benefit," FBI Assistant Director in Charge James C. Barnacle, Jr. said in a statement. The case highlights the effectiveness of the DOJ's new policy encouraging corporate self-reporting to combat financial crime.
The trio—Mohd Hafiz Lockman, Mohd Yuzaimi Yusof, and Khanh Thuong Nguyen—face charges of wire fraud conspiracy, wire fraud, and aggravated identity theft. According to the indictment, their elaborate scheme involved multiple fraudulent activities. In one instance, they allegedly oversold telecommunications capacity, generating illicit revenue from a sham entity. They are also accused of inflating the cost of cable purchases by nearly $2.9 million and diverting the excess payments to accounts they controlled.
The case underscores the significant internal control failures at the Malaysian state-owned telecommunication giant's U.S. operations. The DOJ said it declined to prosecute Telekom Malaysia itself, citing the company's decision to voluntarily self-report the criminal conduct and its commitment to fully cooperate with the investigation. This decision aligns with a policy rolled out in March to incentivize companies to report misconduct in exchange for leniency.
The indictment details a multifaceted and brazen scheme that extended beyond simple over-invoicing. The defendants are accused of creating fake employee and intern profiles to collect salaries, and on one occasion, using an AI-assisted imposter to deceive human resources staff during a video call.
The executives allegedly exploited a $54 million transaction with a U.S. multinational, where TM was contracted to provide eight terabytes of capacity. The indictment states that only six terabytes were actually purchased, with the defendants selling the remaining two terabytes to other companies and funneling the proceeds through a shell company. The accused also allegedly submitted fabricated work expenses for reimbursement.
Mohd Hafiz was arrested at San Francisco International Airport, while Mohd Yuzaimi and Nguyen surrendered to authorities last month. Telekom Malaysia has not yet issued a public statement on the matter. The charges could lead to significant prison sentences for the former executives and have cast a spotlight on the potential for sophisticated fraud within large multinational corporations.
This article is for informational purposes only and does not constitute investment advice.
