Former Goldman Executive Convicted in Billion Dollar Bribery Scheme
A U.S. jury convicted Friday a former Managing Director of Goldman Sachs for his role in the 1Malaysia Development Berhad (1MDB) embezzlement scandal, in which the bank paid billions in bribes to Malaysian and Abu Dhabi government officials in order to obtain lucrative business dealings.
Malaysian citizen Ng Chong Hwa, also known as Roger Ng, was employed by the bank from 2005, but from 2009 till the end of his tenure with the bank in 2014, he fraudulently diverted and laundered billions of dollars from the Malaysian state-owned and controlled 1MDB fund, created to pursue investment and development projects for the economic benefit of Malaysia and its people.
Specifically, Ng and other Goldman executives managed three bond deals with 1MDB in 2012 and 2013. In actuality, they stole from the development fund to bribe government officials in Malaysia and Abu Dhabi in exchange for lucrative business opportunities, and also to line their own pockets.
“The scheme was massive in its scale... it was brazen in its execution... and it was obscene in its greed,” said Breon Peace, U.S. Attorney from the Eastern District in New York, where the seven-week trial took place.
Ng personally pocketed more than US$35 million in kickbacks for his role in the scheme. He attempted to launder his ill-gotten gains through investments in Hollywood films such as The Wolf of Wall Street, as well as purchasing real estate in Manhattan, a $23 million diamond necklace, and a $51 million Jean-Michael Basquiat painting, among other luxury goods.
“The defendant [Ng] and his cronies saw 1MDB not as an entity to do good for the people of Malaysia, but as a piggy bank to enrich themselves with piles of money siphoned from the fund,” said Peace.
In an attempt to keep their conspiracy under wraps, Ng conspired with his partners to circumvent Goldman’s internal accounting controls. By the time the conspiracy came to light, $2.7 billion had been stolen from 1MDB, of which the American investment bank received $600 million in fees and revenues.
In October 2020, Goldman and its Malaysian subsidiary admitted to violating the U.S. Foreign Corrupt Practices Act as a result of Ng’s scheme. The bank was forced to pay a record $2.9 billion penalty in settlement fees.
“Today’s verdict is a victory for not only the rule of law,” said Peace “but also for the people of Malaysia for whom the fund was supposed to help, by raising money for projects to develop their country’s economy.”
Ng faces up to 30 years in prison for his crimes.