Malaysia filed criminal charges against Goldman Sachs and two former executives on Monday for their role in the alleged multibillion-dollar ransacking of state investment fund 1MDB.
Attorney General Tommy Thomas said the government is seeking several billion dollars in fines from Goldman Sachs for breaches of securities laws that involved it making false and misleading statements to investors.
He said his office will seek prison sentences of up to 10 years for the former Goldman executives, Roger Ng Chong Hwa and Tim Leissner, who is married to model Kimora Lee Simmons.
Malaysian and U.S. prosecutors allege that bond sales organized by Goldman Sachs for 1MDB provided one of the means for associates of former Malaysian Prime Minister Najib Razak to steal billions over several years from a fund that was ostensibly set up to accelerate Malaysia's economic development.
The scandal, first reported by Sarawak Report and the Wall Street Journal, resulted in Najib and his ruling coalition losing power in a historic election defeat earlier this year. Najib himself is facing corruption charges.
He has said that more than $700 million that moved through his bank account was a political donation from the Saudi royal family, but U.S. prosecutors say it came from 1MDB, of which Najib was the top official.
U.S. legal filings that are part of a Justice Department civil case to recover assets bought with 1MDB funds allege the money was used to finance Hollywood films and spent on luxuries such as diamond jewelry for Najib's wife, a yacht, artworks and high-end properties.
Goldman Sachs denied any wrongdoing in response to Malaysia's criminal charges.
"We believe these charges are misdirected and we will vigorously defend them and look forward to the opportunity to present our case," bank spokesman Edward Naylor said in a statement. "The firm continues to cooperate with all authorities investigating these matters."
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