Malaysia ex-PM's wife pleads not guilty to money laundering

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Rosmah Mansor, wife of former Malaysian Prime Minister Najib Razak walks into courtroom at Kuala Lumpur High Court in Kuala Lumpur, Malaysia, Thursday, Oct. 4, 2018. Rosmah was arrested by the anti graft agency Wednesday and will face money laundering charges related to a graft scandal in the 1mdb state investment fund. (AP Photo/Vincent Thian)

The wife of former Malaysian Prime Minister Najjib Razak pleaded not guilty Thursday to laundering illegal proceeds linked to the graft scandal at the 1MDB state investment fund that led to her husband's shocking electoral loss.

Rosmah Mansor was charged with 12 counts of receiving proceeds from unlawful activities totaling nearly 7.1 million ringgit ($1.7 million) in her bank account between 2013 and 2017. Another five counts against her allege she failed to declare taxes on the money she received.

The charges sheets didn't mention 1MDB or where the allegedly illegal proceeds originated. But Rosmah was arrested by the anti-graft agency Wednesday after being questioned a third time over alleged theft and money laundering at the 1MDB fund.

Rosmah claimed trial and was released on bail. The court will fix the trial date later. If convicted, Rosmah would face between five and 15 years in prison and possible fines for each charge.

Her husband Najib also appeared in court Thursday for the management of his own trial over the 1MDB scandal. He has pleaded not guilty to multiple counts of money laundering, corruption, abuse of power and criminal breach of trust and is to face trial next year.

The couple smiled and waved at reporters but didn't speak as they left the court building together.

"This is a good opportunity for (Rosmah) to...clear her name," her lawyer Geethan Ram Vincent told reporters.

Najib, 65, tweeted late Wednesday after his wife's arrest that he will hold on to his hope in Allah. He had accused the new government of seeking political vengeance and has said the thousands of luxury items seized by police were mostly gifts to his family.

Prime Minister Mahathir Mohamad, whose alliance ousted Najib's long-ruling coalition in May's election, said the court case against Rosmah was "not about revenge" but based on rule of law.

"The law says if you steal money, you can be charged in court. Whether the court agrees or not, that is a different matter," he was quoted as saying by national Bernama news agency.

"Clearly this is a first for Malaysia. This speaks to the prominent political role of Rosmah in the administration, which was highly contentious during Najib's tenure. She was seen to be involved in the perceived corruption and his business dealings, as an important gatekeeper," said Bridget Welsh, political science professor at John Cabot University in Rome.

Rosmah, 66, is widely reviled for her opulent lifestyle and penchant for expensive jewelry and designer Birkin bags that led to her being compared with former Philippine first lady Imelda Marcos and her extravagant collection of shoes.

Police found hundreds of luxury handbags, jewelry and cash — worth more than $266 million — during raids on apartments linked to the family shortly after Najib's shocking electoral defeat in May. Seized were 567 handbags, 423 watches and 12,000 pieces of jewelry, including 1,400 necklaces, 2,200 rings, 2,800 pairs of earrings and 14 tiaras.

"More than anyone, Rosmah represented the greed and excess seen of the Najib administration, from rings to hairdos. The couple acted as if they were above the law and now they are being held to account. The arrest speaks to deep resentments and concerns about the abuse of power within Malaysia and shows that the new government is serious about greater accountability," said Welsh, a Southeast Asia expert.

In her biography in 2013, Rosmah said it was common for a prime minister's wife to receive expensive jewelry and gifts. She also said she had earned millions of ringgit from her own music album, which was bought by government ministers.

Her daughter Nooryana Najwa Najib has slammed the government for going after the family.

"I can accept taking action on a man who was in power, but putting the women in his life in harm's way is going too far," she wrote on Instagram late Wednesday, citing a recent police raid on the house of Najib's mother and Rosmah's arrest.

Nooryana posted a picture of a young Rosmah holding herself as a toddler, and vowed "we will persevere."

Najib set up the 1MDB fund when he took power in 2009, but it accumulated billions in debts and is being investigated in the U.S. and several other countries. U.S. investigators say Najib's associates stole and laundered $4.5 billion from the fund from 2009 to 2014, some of which landed in Najib's bank account. They say $27.3 million was used to buy a rare diamond necklace for Rosmah.

The May 9 election outcome ushered in the first change of power since Malaysia's independence from Britain in 1957.

Mahathir reopened investigations into 1MDB that were suppressed under Najib's rule and banned the couple from leaving the country.

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Ng reported from Jakarta, Indonesia.