Ex-Goldman Banker charged in 1MDB fund scandal

Goldman Sachs is being probed by US Justice Department for its role as underwriter and arranger for some $6.5 billion worth of 1Malaysia Development Bhd (1MDB) bond offerings, in the governmental fund scandal shaking Malaysia and the bank for the last few months.

In recent events, a former Managing Director of Goldman Sachs Group Inc., Roger Ng, was extradited from Malaysia to face judgment in New York. He was incarcerated in Kuala Lumpur since November for four counts of abetting the bank to provide misleading statements in the offering prospectus for 1MDB bond sales. And he is facing 30 years in prison in the US for conspiring to launder money and bribe government officials in Malaysia and Abu Dhabi.

On Monday, a federal judge said Mr Ng has started plea negotiations with the Justice Department, which could help prosecutors build a case against the bank and its employees in the Malaysian government fund scandal. Prosecutors estimate that high-level 1MDB fund officials and their associates misappropriated $4.5 billion between 2009 and 2014, including some of the funds that Goldman Sachs helped raise.

Malaysia has said it was seeking up to $7.5 billion in reparations from Goldman over its dealings with 1MDB, set up in 2009 by then-Prime Minister Najib Razak.

This is yet another example of the importance of designing thorough AML (Anti-Money Laundering) and KYC (Know Your Client) procedures in financial businesses, to prevent illegal transactions and maintain a healthy financial environment.

Date: 8th May 2019

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