Muhammad Shafee Abdullah was arrested and brought to court as police widen investigation into corruption scandal.

A lawyer for former Malaysian Prime Minister Najib Razak was charged with receiving US$2.3m in ill-gotten wealth, as police announced the investigation of more than 50 individuals suspected of links to the multi-billion dollar looting of the 1MDB state investment fund.

Muhammad Shafee Abdullah was arrested on Thursday and brought to court, where he pleaded not guilty to two counts of money-laundering and two counts of evading taxes by making false declarations on his income tax.

Shafee reportedly received the $2.3m from a client, who is himself accused of money-laundering and corruption.

According to the charge sheets, he received proceeds from illegal activities of $1.04m from Najib’s personal bank account in September 2013 and another $1.26m in February 2014.

Shafee is the main defence lawyer for Najib, who months after his electoral defeat faces charges of money-laundering, criminal breach of trust, and corruption linked to the 1MDB scandal.

Najib criticised the court action as politically motivated to intimidate Shafee and “another step to deny me a fair trial”.

In a statement on Facebook, he said the investigation was clearly not complete because he has not been summoned by anti-graft officials to explain the payment to Shafee.

“This is victimisation,” Shafee told reporters, vowing to continue to defend Najib.

Shafee admitted he received the money, but denied it was a reward for prosecuting then opposition leader Anwar Ibrahim in his sodomy trial.

He said it was a back payment for legal services for Najib’s Malay party and then-ruling coalition, and he had no knowledge of the source of the money.

Payment from Saudi prince

Najib also said the payment was for Shafee’s legal services, and it came not from 1MDB, but from a political donation from Saudi Arabia’s finance ministry and a Saudi prince who acted for the late King Abdullah.

Public anger over the 1MDB scandal led to the stunning removal of Najib’s long-ruling coalition on May 9 national polls and ushered in the first change of power since independence from Britain in 1957.

Najib set up 1MDB when he took power in 2009 to promote economic development, but the fund amassed billions in debts and is being investigated in the United States and several other countries for alleged cross-border embezzlement and money-laundering.

According to the US Department of Justice, as much as $4.5bn was misappropriated by top officials of the government fund and their associates.

The new government reopened investigations stifled under Najib’s rule and barred him and his wife from leaving the country.

Police also seized jewelry and hundreds of handbags and other valuables estimated at more than $273m from properties linked to Najib.

Bulging bank account

Deputy national police chief Noor Rashid Ibrahim said on Thursday investigations so far showed that $972m had been transferred to Najib’s bank account from three companies linked to 1MDB.

He said police identified 132 transactions involving the illegal money, mostly conducted abroad, and investigated more than 50 people, including local politicians, who may have received ill-gotten wealth.

He declined to say if lawyer Shafee was one of the 50 people.

Malaysia has made requests to authorities in countries including Singapore, US, Switzerland and Saudi Arabia for help in its investigation, he added.

Najib, 65, has accused Malaysia’s new government under Prime Minister Mahathir Mohamad of seeking political vengeance and vowed to clear his name at his trial.