Goldman Sachs has reached a deal to pay the US Justice Department $2.8 billion for its role in a multi-billion dollar bribery scheme in Malaysia, according to a report.
The investment banking giant — whose reputation has taken a battering over the scheme, after which fugitive financier Jho Low used proceeds to party with Paris Hilton and even helped bankroll the Martin Scorsese flick “Wolf of Wall Street” — will also admit wrongdoing but avoid a criminal conviction in the deal, Bloomberg reported.
A Goldman subsidiary in Asia that helped raise money for a corrupt investment fund is expected to plead guilty this week, according to the Wall Street Journal. The parent company will admit fault but won’t file a guilty plea that could have crippled its business in the region, the paper reported.
The so-called “deferrred prosecution agreement” will allow the US Justice Department to pursue charges against Goldman if the bank “errs again” within a specific timeframe, according to the Journal.
All told, Goldman Sachs will have paid some $5 billion in fines — wiping out about two-thirds of a year’s profits — after settling up with the Justice Department, Malaysia and other agencies for their role in the scheme, according to reports.
The settlement will close years of investigations into the company’s investment in the 1MDB investment fund, which has been a headache for Goldman Chief Executive David Solomon since he took the helm of the bank three years ago.
The investigations into the company stemmed from billions of dollars it raised for 1Malaysia Development Bhd. in Malaysia in 2012 and 2013. Large sums of the cash was allegedly stolen from the fund by cronies of the country’s former prime minister, Najib Razak.
Razak was convicted of corruption charges and sentenced to jail in July. The former head of state will spend more than a decade in prison and will be forced to pay $49 million for money laundering, abuse of position and criminal breach of trust.
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