A former senior Goldman Sachs banker in Asia pleaded guilty to U.S. bribery and money-laundering charges and his deputy was arrested in Malaysia, as federal prosecutors in Brooklyn laid out conspiracy allegations related to Goldman Sachs’ lucrative fundraising for Malaysian wealth fund 1MDB.
Malaysian financier Low Taek Jho, the alleged mastermind of a scheme to siphon billions of dollars from the fund, was charged in absentia. He is accused of conspiring with Roger Ng, then a Goldman Sachs banker, to launder billions of dollars embezzled from 1MDB, known formally as 1Malaysia Development Bhd.
Former senior Goldman Sachs banker Tim Leissner pleaded guilty to conspiring to launder money and violating the Foreign Corrupt Practices Act by paying bribes to Malaysia and Abu Dhabi officials and circumventing Goldman’s internal accounting controls, according to prosecutors. He’s been ordered to forfeit $43.7 million.
Goldman Sachs also placed Andrea Vella, its former co-head of investment banking in Asia, on leave, according to a person briefed on the decision.
Vella was put on leave over his role in the firm’s involvement with Malaysia’s 1MDB corruption case, pending review of the allegations, said the person, who asked not to be identified without authorization to speak publicly. Vella was demoted last month.
Low, Ng and Leissner are the first individuals to be charged in the U.S. in relation to the scandal at 1MDB. Goldman Sachs arranged bond offerings that helped the fund raise more than $6 billion, much of which, according to international authorities, was squirreled away in private accounts and used to buy yachts, paintings and high-end real estate.
Prosecutors alleged bribes and kickbacks were paid in connection with Goldman’s bond offerings on 1MDB’s behalf, which generated some $600 million in fees for the bank. Such payments were “known to Ng, Leissner and other employees” of the bank, according to prosecutors.
Low, known as Jho Low, remains at large, prosecutors said in a statement. Ng was arrested Thursday in Malaysia, pursuant to a provisional arrest warrant issued at the request of the U.S., they said.
Michael DuVally, a Goldman Sachs spokesman, didn’t have an immediate comment.
The U.S. alleges that a small coterie of Malaysians led by Low diverted money from 1MDB into personal accounts disguised to look like legitimate businesses, and kicked back some of those funds to officials. Some of the money is alleged to have ended up with former Prime Minister Najib Razak and his family.
According to court papers, Leissner’s scheme dates from at least 2009, prosecutors said. Between 2012 and 2013, he conspired with two other co-conspirators to get and retain business from 1MDB for the benefit of Goldman Sachs by promising bribes and kickbacks to government officials in Malaysia and Abu Dhabi using misappropriated and embezzled proceeds from 1MDB bond transactions.
Prosecutors allege that Low and Leissner used the laundered funds to buy artwork and luxury real estate in New York City and to finance movies including “The Wolf of Wall Street.”