17 Goldman Sachs execs charged in Malaysia over 1MDB scandal

Malaysia has filed criminal fraud charges against 17 Goldman Sachs executives. 

The individuals who were charged directed three Goldman Sachs units that Malaysia alleges misled investors while working on $6.5 billion in bond sales for the state investment fund in 2012 and 2013, Bloomberg News reported on Friday. The fund is known as 1Malaysia Development Bhd., or 1MDB.

{mosads}Malaysian officials have accused the directors of knowing the funds would be misused. Attorney General Tommy Thomas reportedly said in a Friday statement that the country wants custodial sentences and criminal fines. 

The penalties represent “the severity of the scheme to defraud and fraudulent misappropriation of billions in bond proceeds, the lengthy period over which the offenses were planned and executed,” Thomas said.

Goldman Sachs told The Hill in a statement that the charges are “misdirected and will be vigorously defended.”

“Certain members of the former Malaysian government and 1MDB lied to Goldman Sachs, outside counsel and others about the use of proceeds from these transactions,” the investment banking firm said. “1MDB, whose CEO and board reported directly to the prime minister at the time, also provided written assurances to Goldman Sachs for each transaction that no intermediaries were involved. Under the Malaysian legal process, the firm and the individual entity directors were not afforded an opportunity to be heard prior to the filing of these charges.”

The company added that the charges do not affect its ability to conduct business globally.

According to Bloomberg, authorities in the U.S. and Singapore are looking into the matter as well. Two former bankers have also been charged by U.S. prosecutors. 

Those charged Friday include Vice Chairman Richard J. Gnodde, who leads the company’s international business in London; J. Michael Evans, a former partner of the bank and current president of Alibaba Group Holding Ltd.; and a former adviser to former British Prime Minister Margaret Thatcher, according to the news outlet. 

“Mike Evans was a member of senior management at Goldman Sachs prior to joining Alibaba Group in 2015,” Alibaba told The Hill in a statement Friday. “We are aware of the news and will continue to monitor the situation.”

Updated at 11:17 a.m.