SINGAPORE: A former Goldman Sachs Group Inc banker is in talks with US prosecutors to potentially plead guilty to criminal charges stemming from an alleged scheme to steal billions of dollars from a Malaysian state investment fund, The Wall Street Journal reported.
The report said the talks bring the fast-moving investigation closer to Goldman Sachs, which raised billions of dollars for 1Malaysia Development Bhd (1MDB).
Tim Leissner, a one-time Goldman Sachs partner and South-East Asia chairman, has not been charged.
He is seeking an agreement with prosecutors that would involve his co-operation with the government’s criminal fraud probe into 1MDB and Goldman Sachs, the WSJ report said.
A spokesman for the US Department of Justice (DoJ) and a lawyer for Leissner declined to comment.
A Goldman Sachs spokesman said: “Since we suspended Mr Leissner, we have discovered certain activities he undertook that were deliberately hidden from the firm, which we have brought to the attention of the relevant authorities who continue to receive our full cooperation.”
Last month, citing sources familiar with the matter, Reuters reported that Malaysia is considering asking the DoJ to get Goldman Sachs to return nearly US$600mil (RM2.4bil) in fees it earned from bonds raised for 1MDB.
Goldman Sachs raised nearly US$6.5bil in three bond sales between 2012 and 2013 for 1MDB.
More than US$2.5bil raised from these bonds was misappropriated by high-level 1MDB officials, their relatives and associates, according to DoJ civil lawsuits filed in a US court in 2016.
Goldman Sachs earned almost US$600mil for the three deals – an amount critics say is far in excess of the normal 1-2% fees a bank could expect for helping sell bonds.
Goldman Sachs has maintained that the outsized fees related to the additional risks it took on – it bought the unrated bonds while it sought investors and, in the case of the 2013 deal which raised US$2.7bil, 1MDB wanted the funds in a hurry for a planned investment.
The WSJ said one potential charge Leissner could ultimately plead guilty to would be a violation of the US Foreign Corrupt Practices Act, which bans the use of bribes to foreign officials to get or keep business.
The report said prosecutors from the US Attorney’s Office in Brooklyn are also investigating whether Goldman Sachs violated any laws. — Reuters