Two senior Goldman Sachs bankers allegedly paid bribes and stole and laundered money from a Malaysian sovereign-wealth fund, U.S. prosecutors said, putting the bank at the center of one of the biggest financial frauds in history.
Goldman partner Timothy Leissner, formerly its head of Southeast Asia, pleaded guilty to conspiring to launder money and violate foreign antibribery laws for helping siphon off billions of dollars from the fund, known as 1Malaysia Development Bhd, or 1MDB, according to filings unsealed Thursday.
Goldman managing director Roger Ng, and the alleged mastermind of the fraud, Malaysian financier Jho Low, were indicted on three counts of conspiring to violate foreign antibribery laws and launder money.
For Goldman GS, +0.71% , the charges — as well as a continuing investigation into the bank’s own conduct — come at an inflection point. Executives have spent years shining up a reputation sullied by the 2008 crisis and refashioning the elite firm as a Main Street bank. Goldman underwrote about $6.5 billion in bonds for 1MDB. The indictment alleges the bankers bribed government officials to get the bond deals, controlled offshore accounts where the stolen money was funneled and helped launder the proceeds.
An expanded version of this report appears on WSJ.com.
Also popular on WSJ.com:
On hold for 45 minutes? Might be your secret customer score.
Subaru and Toyota to recall more than 400,000 vehicles globally.
Want news about Asia delivered to your inbox? Subscribe to MarketWatch’s free Asia Daily newsletter. Sign up here.