Malaysia charges ex-PM Najib's lawyer with money laundering

KUALA LUMPUR/HONG KONG (Reuters) - A lawyer representing former Malaysian prime minister Najib Razak was charged with money laundering on Thursday, as anti-corruption agents try to retrieve billions of dollars siphoned off from a scandal-plagued state fund.

The charges against Muhammad Shafee Abdullah come as a blow for Najib who is fighting charges of criminal breach of trust, money laundering and abuse of power at a former unit of state fund 1Malaysia Development Berhad (1MDB).

Prime Minister Mahathir Mohamad’s government, which came to power after a surprise win in elections in May, also acknowledged that the 1MDB fraud investigation was going much more slowly than had been expected, and that “realistically” it was looking at getting back 30 percent of the misappropriated funds.

Shafee pleaded not guilty to two counts of money laundering at a court in Kuala Lumpur after allegedly receiving 9.5 million ringgit ($2.29 million) from Najib. He also faces two charges of false income tax declaration.

Prosecutor Gopal Sri Ram said the case was part of the 1MDB investigation but didn’t say if the money allegedly received by Shafee was from the fund.