Report: Goldman Sachs in talks to avoid guilty plea in 1MBD fraud

Investment giant Goldman Sachs is in talks with US prosecutors to avoid having to plead guilty for its role in the 1MDB corruption cases, according to a report in The New York Times.

It is also asking US Deputy Attorney-General Jeffrey Rosen to review federal prosecutors’ demands that it pay a fine of more than US$2 billion (RM8.6 billion), say sources who spoke to the NYT.

According to the report, the request was made several weeks ago and is not unusual for high-profile corporate probes, usually coming when settlement talks are nearing their end.

Goldman Sachs has never admitted guilt in a federal investigation.

The government of former Malaysian premier Najib Razak set up the 1MDB fund in 2009, and the US Justice Department estimated $4.5 billion (RM19.2 billion) was misappropriated by high-level fund officials and their associates between 2009 and 2014.

Goldman has been investigated by regulators in at least 14 countries, including the US, Malaysia, Singapore, and others, for its underwriting role and what it did and did not know at the time of the transactions.

The bank helped raise US$6.5 billion (RM27.8 billion) for the scandal-plagued 1MDB through the sale of guaranteed notes and bonds.

In November 2018, the US Justice Department filed criminal charges against two former Goldman Sachs bankers tied to the scandal, Tim Leissner and Roger Ng.

According to the US Justice Department, Goldman earned $600 million (RM2.6 billion) in fees for its work with 1MDB. Leissner, Ng, and others received large bonuses in connection with that revenue.

Leissner (left) and Ng.

The bank has consistently tried to distance itself from the scandal, saying Leissner and Ng worked to conceal their criminal activities from bank management.

In January, it was reported that the bank set aside US$1.1 billion (RM4.7 billion) in legal costs, with most of the sum expected to go towards 1MDB settlements.

Leissner, who pleaded guilty in August 2018, had been scheduled for sentencing this month, but that was recently moved to January 2021.

Prosecutors, who have not publicly disclosed the terms of Leissner’s bail, made the request in a sealed letter to a federal judge.

Ng, who pleaded not guilty to charges in May 2019, is set to go on trial in Brooklyn federal court early next year. - Mkini