US Fed bars ex-Goldman Sachs staff over 1MDB misuse
The US Federal Reserve Board is prohibiting two former Goldman Sachs staff from the banking industry for their participation in a scheme to illegally divert billions of dollars from a Malaysian sovereign wealth fund.
The former senior investment bankers, Tim Leissner and Ng Chong Hwa, also known as Roger Ng, were employed by foreign subsidiaries of Goldman and coordinated bond offerings arranged by Goldman for 1Malaysia Development Berhad (1MDB) in 2012 and 2013.
The funds diverted from 1MDB were then used for the conspirators’ personal benefit and to bribe certain government officials in Malaysia and Abu Dhabi.
In August 2018, Leissner pleaded guilty to criminal charges brought by the Department of Justice in the Eastern District of New York for conspiring to violate the Foreign Corrupt Practices Act and to commit money laundering. He was also fined $1.42 million and consented to the permanent ban. Ng was indicted in October 2018 on similar charges.
This action follows on from December 2018, when Goldman was hit by criminal charges in Malaysia for offences related to the misappropriation of $2.7 billion from the proceeds of three bonds issued by subsidiaries of 1MDB.
1MDB, wholly owned by the Government of Malaysia, was established to create long-term economic development for the country through global partnerships and promoting foreign direct investment.