Goldman Sachs scrutinized during Malaysian fraud inquiry

A former Goldman Sachs banker had a criminal complaint filed against him by federal prosecutors earlier in 2018 for alleged involvement in a Malaysian forex fraud scandal, but the charges were ultimately never processed due to a battle for power in the US Justice Department, it has been claimed. This has led to a greater case concerning Goldman Sachs at large, it was revealed today.

The investigation surrounds the disappearance of approximately USD $4bn from a vast government investment fund in Malaysia entitled 1Malaysia Development Berhad (1MDB).

The inquiry is the responsibility of Brooklyn-based prosecutors, who have now fixed their sights on a much more significant target than one Wall Street Banker – they are now investigating the banking giant Goldman Sachs itself. This is not the first time in recent months that the banking leviathon has been looked into regarding fraud charges.

It is believed that a small group of individuals with an association to Najib Razak, former Malaysian Prime Minister, illegally appropriated capital from the state fund in order to purchase such commodities as yachts, paintings and real estate.

The bank has consistently played down its role in the 1MDB case, claiming that it was not conscious of how monies from the fund were being used. Goldman Sachs has maintained that it is committed to full cooperation with the investigation.

“Goldman Sachs has no visibility into whether some of the funds we helped raise for 1MDB may have been subsequently diverted to other purposes,” claimed Michael DuValley, a spokesman for Goldman Sachs.

“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.”

Prosecutors from the US attorney’s office in the Central District of California in Los Angeles told their associates in Brooklyn that it was their intention to criminally charge Tim Leissner, the former Goldman Sachs investment banker who was working closely with the Malaysian fund. Charges included one count of delivering misleading information to the bank concerning how the resources were being utilized. This was an accusation that resonated with Leissner’s previous actions, as he had already been sanctioned for the same charge by Singaporean securities regulators.

Former Malaysian PM Najib Razak was officially charged on Wednesday 8 August with three separate counts of money laundering in relation to the 1MDB state fund. This comes one month after the disgraced former Prime Minister was incriminated with abuse of power charges and three counts of criminal breach of trust.

Razak was alleged to have received three international money transfers equalling MYR 42m in total.

The US government is presently seeking to recover approximately USD $540 of misappropriated capital which disappeared from the Malaysian state fund.

Earlier this year in June, the Malaysian Finance Minister Lim Guan Eng claimed that the incumbent government planned to pursue restitution from Goldman Sachs for a proportion of the missing money.

About the author: Rebecca Sachs

Hailing from a medical family, Rebecca broke the mould by pursuing a career in corporate finance law, attaining one of the highest final scores at the University of Westminster. Rebecca is close with her two sisters, one of whom is a qualified psychiatrist while the other is studying for a career in psychotherapy. The interest in the mind clearly runs in the family and Rebecca uses her own curiosity in this area when investigating and trying to counteract financial fraud, intrigued by the thought processes of both scammers and victims alike. Perhaps this is why Rebecca’s greatest interest lies in Ponzi schemes and the mentality behind them. Being keen to broaden her experience in the field, Rebecca began as an avid reader of ForexFraud.com and only recently joined our team of writers after following and then striking up a friendship with one of our other contributors, Karen Miller. Much of Rebecca’s free time is spent with her son and husband in their Hertfordshire home. They enjoy walks along the river and hope to add a dog to their family soon. Rebecca’s husband is a professional writer and it was his encouragement that pushed Rebecca to try her hand at sharing her expertise, and apparently stresses that we have him to thank for our most recent addition to the team.

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