Former Goldman Sachs bankers, one of the most iconic financial institutions in the world, have allegedly been involved in the embezzlement of billions of dollars from a Malaysian state fund. The money was funneled out of accounts using shell companies, and then spent to finance luxury items, bribes, and even a Hollywood movie, The Wolf of Wall Street.
Former Goldman Sachs Bankers Involved in Scandal
Former Goldman bankers were allegedly involved in an embezzlement scandal that has deep ramifications for both the Malaysian economy and Hollywood. This is the culmination of a long and tough investigation, yielding a guilty plea from Tim Leissner, formerly of Goldman Sachs, who reportedly took part in bribes and money laundering schemes.
Misappropriated money supposedly came from a Malaysian fund called 1Malaysia Development Berhad, creating scandal so big even the prime minister of the country had to resign following allegations he directed more than $700 million from the fund to personal accounts. Reports show bribes from bankers were key to raise money for the fund, supposedly earning Goldman close to $600 million.
At least some of the money was redirected in the form of gifts to actor Leonardo DiCaprio. Malaysian financier Jho Low assisted with production of The Wolf of Wall Street through the company Red Granite Pictures. Some of the gifts were returned by DiCaprio, one of them being Marlon Brando’s Oscar. Low was also accused of embezzlement and bribery, and has since absconded.
According to court documents, Goldman’s Leissner and Jho Low worked hand in hand to gain financing from bond issuers through elaborated bribes. Low would tell Leissner how to act and who to bribe, and Leissner would follow instructions, according to reports.
Goldman Sachs Lacks Internal Controls
While it is still unclear how many former Goldman bankers were aware of the schemes, investigations continue. One analyst blamed a lack of internal controls at Goldman with regard to ethics.
The Wall Street Journal claims another employee, Andrea Vella, helped Leissner to jump through the hoops of what amounted to Goldman internal controls, at least aware Leissner used bribes. No formal charges as of this writing have been brought against Vella, who has been place on leave.
Furthermore, the Financial Times affirmed more than 30 executives reviewed the processes of these debt deals, including former Goldman Sachs president and current CEO David Solomon.
“There were two sovereign wealth funds . . . everybody had a look at this,” said one banker who reviewed the deal. “You’re not going to find out what happened . . . because there wasn’t an appropriate level of oversight.”
The funds embezzled were supposedly raised to help the Malaysian people deal with development issues. The Malaysian government is considering ways to recover money from Goldman Sachs and others associated.
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