Goldman Sachs agrees to pay $2.9 billion in 1MDB scandal
October 23, 2020
The Goldman Sachs Group agreed to pay $2.9 billion (€2.4 billion) in penalties to settle criminal charges in Malaysia's 1MDB bribery scandal, said the US Justice Department Thursday.
The sum is set to be the largest US fine ever in a corruption case.
Malaysia unit pleads guilty
Goldman's Malaysia subsidiary unit pleaded guilty in a US court for violations of American bribery law, in the case that involved $1.6 billion in bribes.
The US parent company, however, pleaded not guilty and agreed to deferred prosecution.
Acting US Assistant Attorney General Brian C. Rabbitt said it had turned the investment fund "into a piggy bank for corrupt public officials and their cronies," in a press briefing.
The company helped raise $6.5 billion for the Malaysian government's sovereign wealth fund. The US Justice Department has said more than $4.5 billion was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015.
Goldman also said it was clawing back $174 million (€147 million) in executive compensation.
Earlier this year, Goldman Sachs had agreed to pay $3.9 billion in return for having the country end criminal proceedings against it over a multibillion-dollar fraud scandal.
1MDB Scandal
Since 2019, Goldman had set aside $4.39 billion to cover legal and regulatory matters. Some $2 billion was for matters it already resolved with the Malaysian government.
Both Malaysian and US authorities say the 1MDB fund was defrauded of some $4.5 billion, with former Malaysian Prime Minister Najib Razak and Goldman among those implicated.
US prosecutors say the money was used to buy artwork and real estate around the world and even used to fund the movie "Wolf of Wall Street" — a film about a young Wall Street broker who makes a fortune by defrauding wealthy investors.
Najib lost power in 2018 amid public outrage at the scandal.He received 12 years jailfor the 1MDB graft trial.
tg/rc (AFP, Reuters)