Malaysia filed criminal charges against Richard Gnobbe, a top executive at Goldman Sachs and 16 other former and current Goldman Sachs bankers. The charges escalate the legal challenges for Goldman, which has come under scrutiny for its role in a multibillion-dollar international fraud scandal that led to the ouster of Najib Razak as Malaysia’s prime minister.
Attorney General Tommy Thomas said custodial sentences and criminal fines would be sought against those charged. Goldman helped raise $6.5bn (£5.4bn) through bond offerings for 1MDB. The bank said it would “vigorously” defend the charges.
Mr Thomas said in a statement: “Custodial sentences and criminal fines will be sought against the accused.”
He said this was because of the “severity of the scheme to defraud and fraudulent misappropriation of billions in bond proceeds, the lengthy period over which the offences were planned and executed, the number of Goldman Sachs subsidiaries, officers and employers involved and the relative value of the fees and commissions paid to Goldman Sachs for their multiple roles played in arranging, structuring, underwriting and selling the three bonds”. If convicted, those charged could face prison sentences of up to 10 years and fines of at least one million ringgit (£200,000).
In December last year, Malaysia filed criminal charges against Goldman Sachs and two former employees in connection with the corruption and money-laundering investigation at the fund, which is being investigated in at least six countries. 1 MDB: Malaysia charges Goldman Sachs and two bankers; 1 MDB: Malaysia’s global corruption scandal and 1 MDB scandal: The playboys, PMs and partygoers
Misdirected, according the the spokesperson
“We believe the charges announced, along with those against three Goldman Sachs entities announced in December last year, are misdirected and will be vigorously defended,” a spokesperson for Goldman said.
Among the other individuals named by Malaysia’s attorney general are Michael Sherwood, a former co-head of Goldman’s European operations, and Michael Evans, a former partner who is now president of Chinese e-commerce company Alibaba. The charges related to what is being seen as one of the world’s biggest financial scandals.