Billion dollar fine in 1MDB scandal: Goldman Sachs pleads guilty

Andrew Cummings
October 27, 2020

A Goldman Sachs spokesman said the Wall Street bank would issue a statement in due course.

The US DoJ helped recover and return over US$1 billion in cash and seized assets as at April this year - yet even with the US$3.9 billion settlement Malaysia reached with Goldman Sachs, it had barely recovered half of the over US$8.8 billion in cash and unidentified assets lost from 1MDB.

Malaysian and US authorities estimate $4.5 billion was stolen from 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials in the fund, former Malaysian Prime Minister Najib Razak, Goldman staff and others.


In connection with the 1MDB scandal, Goldman Sachs is accused, among other things, of having bribed government officials in Malaysia and Abu Dhabi with bribes of more than a billion dollars. In August 2018, Leissner pleaded guilty to criminal charges brought by the US Department of Justice against him for conspiring to commit money laundering and to violate the Foreign Corrupt Practices Act.

The actions taken by the Securities and Futures Commission (SFC) of Hong Kong and the Monetary Authority of Singapore (MAS) came after Goldman Sachs agreed to pay US$2.9 billion to resolve the cases involving 1Malaysia Development Berhad (1MDB). Tim Leissner, the former Southeast Asia Chairman, has pleaded guilty, while Ng Chong Hwa, also known as "Roger Ng", former head of investment banking for GS Malaysia, is awaiting trial, and Low Taek Jho remains a fugitive.

While Goldman's Malaysian unit pleaded guilty in a U.S. court for breaking corruption laws, the parent company pleaded not guilty and agreed to a deferred prosecution.


The three bond offerings, which raised a combined $6.5 billion, were arranged and underwritten by UK-based Goldman Sachs International, with work conducted by deal team members in multiple jurisdictions, who shared the revenue generated.

This is not the first time Goldman is paying for its participation in the scandal.

Goldman Sachs has had a level of notoriety in the public consciousness since its involvement in the 2008 financial crisis; a famous article in Rolling Stone magazine called the firm "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money".


"Goldman Sachs today accepted responsibility for its role in a conspiracy to bribe high-ranking foreign officials to obtain lucrative underwriting and other business relating to 1MDB", Acting Assistant Attorney General Brian Rabbitt said in a statement. It was paid United States dollars 581.5 from 1MDB as fees.

Other reports by iNewsToday

FOLLOW OUR NEWSPAPER