US prosecutors unveiled criminal charges on Thursday against two former Goldman Sachs bankers and Malaysian financier Low Taek Jho tied to the alleged theft of billions from Malaysian sovereign wealth fund 1MDB.
Two former Goldman Sachs bankers conspired to bribe Malaysian government officials and launder billions of dollars stolen from 1MDB, the country's sovereign wealth fund, American prosecutors alleged yesterday.
Low, Ng, Leissner, and others also conspired to bribe government officials in Malaysia, including at 1MDB - a state-owned and controlled fund meant to fund economic development projects in the country - and Abu Dhabi to keep lucrative deals to themselves, federal prosecutors said.
It is a stark charge against the former Goldman employees, who until now have faced no charges of wrongdoing in the years-long money laundering and embezzlement saga involving the 1Malaysia Development Berhad fund, or 1MDB.
Goldman Sachs arranged bond offerings that helped the fund raise more than US$6 billion, much of which, according to global authorities, was squirrelled away in private accounts and used to buy yachts, paintings and high-end real estate.
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Roger Ng, the other charged former Goldman banker, was arrested in Malaysia at the request of USA authorities and is expected to be extradited, according to John Marzulli, a spokesman for the prosecution.
The funds were intended "for the benefit of the Malaysian people" but more than US$2.7 billion went to kickbacks and bribes, according to the charges. He has called the Malaysian charges political.
Goldman has placed its former co-head of Asia investment banking, Andrea Vella, on leave over his role in the firm's involvement with the case, pending a review of allegations, according to a person familiar with the decision. The new Prime Minister, Mahathir Mohamad, has moved quickly to investigate the alleged theft of billions of dollars from the investment fund, which was created under Mr. Najib.
Ng was also indicted for conspiring to violate the internal controls at Goldman Sachs, which underwrote about US$6.5 billion in bonds issued by 1MDB, the U.S. government said.
Goldman did not immediately have a comment Thursday. A lawyer for Leissner was unavailable for comment when NPR phoned. A representative for Mr. It was not immediately clear who is representing Ng.
The transactions were structured as bond deals "rather than other forms of financing, because doing so generated much higher revenues and fees for (Goldman Sachs), improved the bank's reputational standing in both the Southeast Asian region and globally and provided Leissner and other bankers with increased remuneration and professional prestige, even though the bond financing was more expensive for 1MDB", the DOJ said in the criminal information document.