Malaysia’s 1MDB scandal: Goldman Sachs set to pay US$2 billion to US authorities

The Wall Street group is believed to have reached a deal with the US Department of Justice, which will mean it avoids criminal charges there

It finalised a settlement with Malaysia in July, and faces a penalty in Singapore for its role in raising funds for 1Malaysia Development Bhd

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Wall Street firm Goldman Sachs may pay about US$5 billion for its role in the financial scandal, once accords with Malaysia, the US Justice Department and other agencies are tallied together. Photo: Reuters

Published: 2:50pm, 20 Oct 2020Updated: 10:12pm, 20 Oct 2020

Goldman Sachs has reached a long-awaited pact with the US Department of Justice to pay more than US$2 billion for the bank’s role in Malaysia’s 1MDB scandal, and the deal may be announced within days, according to people familiar with the matter.

The accord, part of an international action, will let the parent company avoid a US criminal conviction, according to the sources. The payment to the Justice Department is broadly in line with the bank’s prior reserves and analysts’ estimates.

The deal, expected to come just weeks before the US presidential election, would remove uncertainty for the bank following years of investigations and negotiations with the Justice Department over the firm’s fundraising for the 1MDB investment fund.

It follows an agreement in July to settle a related probe with Malaysia, in which the bank promised to pay US$2.5 billion. Malaysia dropped criminal charges against the New York-based company in early September.

A representative for Goldman Sachs declined to comment, and representatives for the Justice Department did not respond to messages seeking comment.

In all, Goldman Sachs may pay roughly US$5 billion once accords with Malaysia, the Justice Department and other agencies are tallied together.