Malaysia charged another former banker at Goldman Sachs Group Inc., the second executive to have received indictment in connection with money laundering allegations from state-owned 1Malaysia Development Berhad or 1MDB.
Goldman helped the fundraise $6.5 billion through bonds and has earned $600 million in fees in 2012 and 2013. While the reported fees sounded lucrative enough, the U.S. Justice Department estimated that a total of $4.5 billion was misappropriated in connection with the case. The accused had even reportedly spent some of the funds it helped raised for 1MDB.
The second executive to have been charged was Malaysian Roger Ng. Allegations against him included four counts of urging the bank to issue misleading statements to attract more prospective buyers for the bonds, according to Reuters.
On Monday, former Goldman investment banker Timothy Leissner was also charged in connection with the alleged money laundering scheme. Other officials who received charges were former 1MDB employee Jasmine Loo Ai Swan and Jho Law a Malaysian financier described by The New York Times as someone "flamboyant." Investigators alleged Jho Law masterminded the multibillion-dollar scheme.
The laundered money was reportedly spent by the accused executives to finance their luxurious lifestyle, engaging in diamond buying spree, as well as collecting Birkins bags, Picassos and a Monet. At some point, a portion of the money was used to fund the production of Hollywood films which ironically included "The Wolf of Wall Street."
The case will be heard on March 18 but Leissner had already pleaded guilty to conspiracy to launder money, according to Reuters. He also pleaded guilty to conspiracy to violate the Foreign Corrupt Practice Act and has agreed to "forfeit" $43.7 million.
Leissner had also been ban for life by Singapore's central bank.
Ng, on the other hand, would probably be extradited to the U.S. to face the charges.
The Malaysian court assigned to hear the case has already issued summon to Goldman Sachs. The bank denied any knowledge about the laundering and argued that members of the former Malaysian government and 1MDB officials were the ones who lied to the bank about the specifics of the bond sales.
It would be recalled that Malaysian authorities investigated a similar case involving a multi-billion dollar international fraud scandal which led to the ouster of former Prime Minister Najib Razak.
Goldman said it continues to cooperate with investigators from Malaysia and looks forward to the opportunity to defend the institution that has been operating for 149 years.
