Goldman Sachs Group Inc. is discussing a deal with the U.S. Department of Justice in which the bank will admit guilt and pay a fine of almost $2 billion to settle criminal charges over the 1Malaysia Development Berhad, or 1MDB, fund scandal, The Wall Street Journal reported, citing people familiar with the matter.
The plan is for a Goldman Sachs subsidiary in Asia, not the parent company, to plead guilty to violating U.S. bribery laws, according to the people. The Justice Department could require the company to employ an independent monitor for its compliance procedures, according to the report.
Recently, Bloomberg News reported that the Justice Department and other federal agencies might impose a fine of $1.5 billion to $2 billion against Goldman Sachs for its alleged role in the matter.
The terms might still change until a deal is reached, which could occur in early 2020, the news outlet reported. Goldman Sachs' talks with the U.S. government will not settle charges from Malaysian authorities. A petition to transfer the case against a Goldman Sachs unit, Goldman Sachs (Singapore) Pte, to Malaysia's High Court is reportedly subject to be heard Dec. 26.
Goldman Sachs had raised money for the Malaysian state-owned 1MDB fund, which prosecutors say were stolen by an adviser to the Malaysian government, Low Taek Jho, also known as Jho Low, and two former Goldman Sachs executives, Tim Leissner and Roger Ng.
The U.S. Department of Justice in October reached a settlement to recover more than $700 million worth of assets from Low. In November, Ng was reported to be set to return to Malaysia in March 2020 to face trial over the scandal. Earlier in December, Leissner agreed to be permanently barred from the securities industry and was ordered by the U.S. Securities and Exchange Commission to pay disgorgement of $43.7 million for his involvement in the corruption scheme.