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Former, Current Goldman Sachs Figures Charged Over 1MDB Saga - Media

Tom Burroughes, Group Editor, 12 August 2019

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The scandal, now a global one, has embroiled a number of banks in financial centres ranging from the US to Singapore.

Authorities in Malaysia have charged 17 Goldman Sachs employees over a scandal that has spread around the world, embroiling banks and drawing probes from organisations including the US Department of Justice.

Media reports said that the Southeast Asian country has filed criminal charges against current and former directors at three Goldman Sachs subsidiaries for their role in the alleged multi-billion dollar ransacking of state investment fund 1MDB.

A network of individuals, including former Malaysian prime minister Najib Razak, are accused of siphoning billions of dollars from the state-backed fund for their own personal use. In a bizarre twist that blends fact and fiction, money from the fund was even used to finance the Hollywood film about a fraudster, The Wolf of Wall Street.

The US and Malaysian government in December last year filed criminal charges against Goldman Sachs and two former executives for breaches of securities laws including making false, misleading statements to investors, media reports said. Attorney General Tommy Thomas reportedly said today that the 17 people charged in the most recent filings were charged under the Malaysian Capital Markets and Services Act for conniving to commit the significant fraud.

"Custodial sentences and criminal fines will be sought against the accused ... given the severity of the scheme to defraud and fraudulent misappropriation of billions in bonds proceeds," Thomas was quoted as saying.

Najib set up 1MDB when he took office in 2009, but it accumulated billions in debts and US investigators allege that at least $4.5 billion was stolen from the fund and laundered by Najib's associates.

The scandal has seen investigators in Switzerland, the US and Singapore get involved. Singapore, for example, has also removed local bank licences from BSI and Falcon Private Bank, two Switzerland-based organisations. (BSI has been subsequently acquired by EFG International.) The saga adds to the profile of the global money laundering problem and the need to develop more tools to fight it.

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