The Justice Department is claiming Low used 1MDB money to purchase high end real estate in the USA, fund Hollywood films and bribe foreign officials.
The 1MDB investigations in the United States and Malaysia have gathered pace since Najib unexpectedly lost a general election in May to Mahathir Mohamad, who returned to power 15 years after he retired as prime minister.
A Malaysian-Chinese born on the island of Penang whose grandfather was born in southern China's Guangdong, Low describes himself on his website Jho-Low.com as a "global investor and philanthropist" with experience in many companies, financings and projects in media, entertainment, retailing, hospitality and real estate.
Goldman Sachs itself was not charged. Another former bank official, Ng Chong Hwa, 51, also known as Roger Ng, was arrested earlier Thursday in Malaysia and accused of circumventing internal accounting controls, prosecutors said.
Low, through his attorneys, had previously maintained his innocence and said he is confident of being vindicated. The investment bank, which generated about $600 million in fees for its work with 1MDB, has repeatedly denied any wrongdoing and said it is fully cooperating with authorities.
Lawyers for Leissner and Low could not immediately be reached for comment.
The indictments unsealed Thursday against him, ex-bankers Tim Leissner and Ng Chong Hwa, were the first USA criminal charges over the huge fraud, which has spawned investigations around the world.
Also charged was a former Goldman Sachs banker, Tim Leissner, who pleaded guilty to money laundering conspiracy and to conspiring to violating foreign bribery laws.
Ng was arrested in Malaysia and will be extradited to the U.S., while Leissner pleaded guilty and was instructed to pay US$43.7 million (RM181.9 million) in restitution of ill-gotten gains. Prosecutors charge that Malaysian officials stole billions from the fund to buy property, art and other items including investments in movies such as The Wolf of Wall Street.
He said billions in bond offerings detailed in the DOJ indictment were "undertaken openly and lawfully between experienced, well-regulated financial institutions and government entities". Federal prosecutors in Los Angeles have filed multiple civil lawsuits to recoup assets bought with some of that money.
The money was supposed to support development projects, but prosecutors say the three men "conspired to launder" more than $2.7bn through the U.S. financial system, and used this money to pay bribes and "for the personal benefit of themselves and their relatives".
Najib has pleaded not guilty to all the charges and has consistently denied wrongdoing.
Mr Ng was a managing director at Goldman until his departure in May 2014. Such payments were "known to Ng, Leissner and other employees" of the bank, according to prosecutors.