NEW YORK―US officials have unveiled criminal charges against two former Goldman Sachs bankers over the scandal-plagued Malaysian sovereign wealth fund 1MDB, raising fresh questions about corporate culture at the prestigious investment bank.
The Justice Department arrested former Goldman Sachs banker Ng Chong Hwa in Malaysia on Thursday, and unsealed charges against Tim Leissner, another ex-Goldman banker, who has already pleaded guilty and agreed to pay $43.7 million in restitution of ill-gotten gains.
Both men were charged with conspiracy to commit bribery and conspiracy to commit money laundering.
The Justice Department also announced criminal charges against Low Taek Jho, an alleged mastermind and an intermediary to the Malaysian fund. US officials say he remains at large.
Goldman Sachs itself was not charged.
These are the first US criminal charges in the case which spawned investigations around the world.
The 1MDB scandal has had a major impact in Malaysia, with allegations of involvement of top officials contributing to the downfall of the long-ruling coalition at elections in May.
Former prime minister Najib Razak has since been arrested and charged over the scandal. He denies any wrongdoing.
The men were charged with conspiring to launder billions of dollars from 1 Malaysia Development Berhad, a sovereign wealth fund set up for development of the country, and conspiring to bribe officials in Malaysia and Abu Dhabi, violating the Foreign Corrupt Practices Act.
Low, in a statement through his spokesman, maintained his innocence.
“Mr. Low simply asks that the public keep an open mind regarding this case until all of the evidence comes to light, which he believes will vindicate him,” it said.
Ng was also indicted for conspiring to violate the internal controls at Goldman Sachs, which underwrote about $6.5 billion in bonds issued by 1MDB, the US government said.
The funds were intended “for the benefit of the Malaysian people” but more than $2.7 billion went to kickbacks and bribes, according to the charges.
Goldman Sachs, which garnered $600 million in fees and revenues from three 1MDB bond transactions detailed in the indictments, has said previously it has received subpoenas and requests for information on the case from various governments and regulatory bodies.
Goldman Sachs, which said it is cooperating in the probe, was not named in the DOJ criminal documents, but was referred to as “financial institution #1.”
The DOJ said Ng and Leissner repeatedly circumvented Goldman’s oversight tools for countering fraud, adding that the “business culture” at the firm, “particularly in Southeast Asia, was highly focused on consummating deals.”