NEW YORK: Global financial titan Goldman Sachs on Thursday agreed to pay $2.9 billion in penalties to settle criminal charges in the 1MDB Malaysian bribery scandal, the largest US fine ever in a corruption case, the Justice Department announced.

Acting US Assistant Attorney General Brian C. Rabbitt said Goldman “accepted responsibility” in the case that involved $1.6 billion in bribes, the largest-ever recorded, and massive gains laundered through the US financial system.

Goldman Sachs helped raise $6.5 billion for the Malaysian government’s sovereign wealth fund, and the US 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.

The investment fund “was looted by corrupt officials and their co-conspirators, including senior Goldman bankers”, turning it “into a piggy bank for corrupt public officials and their cronies”, Rabbitt said at a press briefing.

In a first for Goldman Sachs, the company’s Malaysian unit pleaded guilty in a US court for violations of bribery law as part of a deal to end the criminal probe in the sweeping case that involved authorities in nine countries.

The guilty plea could curtail activities of Goldman Sachs Malaysia. but allows the parent company to avoid admitting wrongdoing in court — which would have damaged its ability to do business.

The parent company pleaded not guilty in US court and agreed to “deferred prosecution” for three-and-a-half years. But Rabbitt stressed that the company has been charged in the bribery scandal, “so there has been a significant amount of criminal liability” for Goldman.

Published in Dawn, October 23rd, 2020