Global financial titan Goldman Sachs is preparing to admit wrongdoing in the massive 1MDB Malaysian bribery scandal and pay the US government $2.8 billion, The Wall Street Journal reported Tuesday, October 20.
The deal would end the criminal probe into the corruption case involving the Malaysian government’s investment fund, the newspaper reported, citing people familiar with the matter.
An Asian subsidiary involved in the case is expected to plead guilty this week, allowing Goldman to avoid pleading guilty – a key development, as such a plea would damage its ability to do business, according to the report.
A spokesperson for the bank declined to comment on the status of the case.
The Justice Department has said more than $4.5 billion was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015.
Goldman helped raise $6.5 billion for the fund, and two ex-bankers are accused of misappropriating billions, bribing officials and giving false statements in relation to bond issues they arranged for the fund.
The Malaysian government dropped the charges against Goldman in July after reaching a $3.9 billion settlement with the financial giant.
The firm, which posted profits of $3.5 billion in the latest quarter, had set aside more than $3.1 billion as of September 30 “for litigation and regulatory proceedings.”
The fraud involved former Malaysian prime minister Najib Razak and his cronies, and the cash plundered from state coffers bankrolled a global spending spree.
It was used to buy everything from artwork to real estate to a superyacht.