Goldman Sachs pleads guilty in U.S., agrees to pay $2.9B in 1MDB scandal

Photo: Public Domain Pictures

Oct. 23 (UPI) — U.S. investment house Goldman Sachs and its Malaysian subsidiary have agreed to pay more than $2.9 billion after admitting to bribery as part of the 1MDB scandal, the U.S. Justice Department announced Thursday.

The company pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act as part of a deferred prosecution agreement.

The Justice Department said the $2.9 billion settlement is in coordination with authorities in the United States, Britain, Singapore and elsewhere.

“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,” said acting Assistant Attorney General Brian Rabbitt of the Justice Department’s criminal division.

“Today’s resolution, which requires Goldman Sachs to admit wrongdoing and pay nearly three billion dollars in penalties, fines, and disgorgement, holds the bank accountable for this criminal scheme and demonstrates the department’s continuing commitment to combatting corruption and protecting the U.S. financial system.”

Tim Leissner, Goldman Sach’s former managing director, previously pleaded guilty to conspiring to launder money and to violate the FCPA, and Ng Chong Hwa, GS Malaysia’s former managing director, has been extradited to face the same charges.

The settlement comes three months after Goldman Sachs agreed to pay $3.9 billion to settle a dispute with the Malaysian government over its role in the 1Malaysia Development Berhad scandal.

Malaysian prosecutors accused the bank in late 2018 of misleading investors in a $6.5 billion bond sale for the sovereign wealth fund.

The bank pleaded not guilty to the Malaysian charges, which said 1MDB officials in the administration of former Prime Minster Najib Razak diverted proceeds from the bond sales to enrich themselves. The scandal ultimately led to the ouster of Najib’s government.

Prosecutors said some of the money was used to buy a pink diamond necklace for Najib’s wife, a 300-foot luxury yacht and extravagant gifts for celebrities. Some was also used to buy Nature Morte au Crane de Taureau, a painting by Pablo Picasso that was given to actor Leonardo DiCaprio as a birthday gift.


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