Goldman Sachs subsidiary pleads to US charges in 1MDB probe

By: |
October 22, 2020 11:10 PM

The company, Goldman Sachs Malaysia, entered the plea in federal court in Brooklyn. As part of its plea, the company admitted that it  knowingly and willfully conspired to violate U.S. anti-bribery laws.

In July, Malaysia's government said it had reached a $3.9 billion settlement with Goldman Sachs in exchange for dropping criminal charges against the bank over bond sales that raised money for the fund.

A subsidiary of Goldman Sachs pleaded guilty on Thursday and agreed to pay more than $2 billion in a foreign corruption probe tied to the Malaysian 1MDB sovereign wealth fund, which was looted of billions of dollars in a corruption scandal.

The company, Goldman Sachs Malaysia, entered the plea in federal court in Brooklyn. As part of its plea, the company admitted that it  knowingly and willfully conspired to violate U.S. anti-bribery laws.

Malaysian and US prosecutors had alleged that bond sales organized by Goldman Sachs provided one of the means for associates of former Prime Minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia’s economic development.

In July, Malaysia’s government said it had reached a $3.9 billion settlement with Goldman Sachs in exchange for dropping criminal charges against the bank over bond sales that raised money for the fund.

In court on Thursday, Goldman Sachs’ general counsel, Karen Seymour, said that agents and employees of Goldman Sachs Malaysia had violated the U.S. Foreign Corrupt Practices Act by corruptly promising and paying bribes to foreign officials in order to obtain and retain business for Goldman Sachs.

The fund, 1Malaysia Development Berhad, was set up in 2009 by Najib to promote economic development. It relied primarily on debt to fund investment and economic development projects and was overseen by senior Malaysian government officials, according to court records.

Najib set up 1MDB when he took office in 2009, but it accumulated billions in debts, and U.S. investigators allege at least $4.5 billion was stolen from the fund and laundered by his associates.

Public anger over the corruption allegations contributed to the shocking election defeat of Najib’s long-ruling coalition in May 2018.

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