17 current and former Goldman Sachs (GS) bankers — including its most senior London-based executive — have been hit with criminal charges related to a multi-billion-dollar Malaysian fraud case.
The Malaysian Attorney General’s office filed charges on Friday related to claims the country’s government were defrauded out of billions of dollars in bond deals, some of which allegedly ended up going a producer of film “Wolf of Wall Street.”
The fresh charges relate to the long-running scandal centring around Malaysian development agency 1MDB.
Goldman helped 1MDB to issue bonds worth $6.5bn but authorities around the world have been investigating claims that billions were stolen from 1MDB over several years. Malaysian authorities alleged at least $2.7bn was stolen.
In December 2018, Malaysia brought criminal charges against several former Goldman bankers directly involved in the bond deal. Friday’s charges extended to senior managers at three key Goldman subsidiaries involved in the deal.
The charges extend to some of Goldman’s most high-profile UK-based bankers, including: Richard Gnodde, the current CEO of Goldman Sachs International and a vice chairman of the bank; and Michael Sherwood, who was co-chief executive of Goldman Sachs International until 2016 and one of Goldman’s most high-profile European executives until his departure.
Michael Evans, the current president of Chinese e-commerce giant Alibaba, is also named in the charges. Evans was a director of Goldman Sachs Asia before joining Alibaba in 2015. A spokesperson for Alibaba told Bloomberg that it was “aware of the news and will continue to monitor the situation.”
All three current and former Goldman execs face up to 10 years in prison and a fine of at least 1m Malaysian ringgit (£197,000, $238,000) if convicted.
“They occupied the highest executive positions in those 3 Goldman Sachs subsidiaries, and exercised or ought to have exercised decision-making authority over the transactions of those bodies corporate,” Malaysian Attorney General Tommy Thomas said in a press release announcing the new charges.
Thomas said prosecutors would be seeking a custodial sentences and criminal fines for the 17 charged.
A spokesperson for Goldman Sachs told Yahoo Finance UK: “We believe the charges announced today, along with those against three Goldman Sachs entities announced in December last year, are misdirected and will be vigorously defended.”
Last year former Malaysian prime minister Najib Razak was arrested on anti-corruption charges as part of a probe into 1MDB. Jho Low, a former 1MDB employee who became the face of the scandal, also faces criminal charges.
Low’s lavish spending and lifestyle was documented in the book “Billion Dollar Whale” and his former luxury yacht was sold for $126m in April.
The Financial Times estimated that as much as $4.5bn was stolen from the 1MDB fund.