US Officials Recommend Criminal Plea Deal for Goldman in 1MDB Case: FT
26 Apr 2019

US Justice Department investigators are recommending that Goldman Sachs plead guilty to criminal violations as part of a settlement over its purported role in facilitating a massive corruption scandal at Malaysia’s 1MDB, the Financial Times reported Wednesday.

Career prosecutors within the department have submitted the recommendation to senior officials who will ultimately decide the terms of a potential settlement, the newspaper said, citing individuals familiar with the matter. Earlier this month, US Attorney General William Barr, who formerly worked for a law firm now representing the New York-based investment bank, received a waiver permitting his participation in the investigation of 1MDB, Politico reported.

Goldman Sachs spokesman Jake Siewert told the Financial Times that the bank does not believe “such a charge would be warranted by the facts of the case or the law, particularly because senior management was unaware of the criminal activity.”

The Justice Department and Malaysian Attorney General Tommy Thomas have accused former Goldman Sachs bankers Roger Ng Chong Hwa and Tim Leissner of helping associates of ex-Malaysian Prime Minister Najib Rizak to misappropriate billions of dollars in proceeds from three bond sales underwritten by the bank.

“Goldman Sachs benefited by receiving underwriting and arranging fees of approximately USD 600 million, which was several times higher than the prevailing market rates and industry norms,” Thomas said in a statement in December.

“In addition to personally receiving part of the misappropriated bond proceeds, those employees and directors of Goldman Sachs received large bonuses and enhanced career prospects at Goldman Sachs and in the investment banking industry generally,” he said.

Leissner, a former Southeast Asia Chairman at the bank, pleaded guilty last year to conspiring to launder money and bribe officials in Malaysia and the United Arab Emirates as part of the scheme. The plea deal required Leissner to forfeit $43.7 million, the Justice Department said.

The department separately indicted Low Taek Jho, or “Jho Low,” for helping to steal a total $4.5 billion from 1MDB and laundering stolen funds through investments in luxury goods and a stake in the movie “The Wolf of Wall Street.” New York prosecutors are also investigating whether Low illegally funneled between $100,000 and $1.5 million to President Donald Trump’s inaugural committee.

US officials arrested Ng in December while Low remains at large. Najib, who was arrested by Malaysian authorities in July, is currently facing multiple criminal trials linked to 1MDB.

Read more:

Money laundering: Malaysia charges Goldman Sachs, ex-bankers over 1MDB scandal

What Najib Razak’s corruption trial means for Malaysia – and the region

Ex-Malaysian Leader’s First 1MDB Trial Begins

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2 Responses to “US Officials Recommend Criminal Plea Deal for Goldman in 1MDB Case: FT”
James Michaels

James Michaels April 25, 2019

Other parties facilitated the 1MDB scandal besides bankers. In particular, those who provided the offshore companies as false fronts for money transfers – anonymous offshore companies in jurisdictions such as Seychelles are the precursors of money laundering and crime. US prosecutors need to pursue the offshore agents in Seychelles who set up the companies and sanction the regulator in Seychelles, the FSA, which encourages the facilitation of international crime through the weakest regulation possible.

Yogesh Kumar

Yogesh Kumar April 27, 2019

There are off-shore services providers as well as off-shore bank which have been named as per previous news items which helped to set-up more than 60 companies in off-shore jurisdictions for this scheme. As per the news the leaders of these off-shore companies and the bank were detained and questioned in Singapore and their names were there in public. However, none of them have been charged. They must be continuing to indulge in similar support activities for other money launderers. There would also be the involvement of off-shore law firms in advising to create such structures but none of them have been charged though now law firms are also covered by AML regulations. A sense of fear of prosecution has to be generated in the support service providers to tackle such money laundering schemes of powerful.

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