United States v. The Goldman Sachs Group, Inc. (E.D.N.Y. 2020)
United States v. Goldman Sachs (Malaysia) Sdn. Bhd. (E.D.N.Y. 2020)

• Case Name
• United States v. The Goldman Sachs Group, Inc. (E.D.N.Y. 2020)
  United States v. Goldman Sachs (Malaysia) Sdn. Bhd. (E.D.N.Y. 2020)

• Date Filed
• 10/22/2020

• Enforcement Agency
• DOJ

• Foreign Official
• Unnamed Malaysian and Abu Dhabi government officials.

• Date of Conduct
• 2009 to 2014

• Nature of Business
• The Goldman Sachs Group Inc. (“Goldman Sachs”) is a global financial institution headquartered in the United States. Goldman Sachs maintains common stock publicly traded on the NYSE and registered with the SEC pursuant to Section 12(b) of the Exchange Act.
  
  Goldman Sachs operates a wholly-owned subsidiary in Malaysia, Goldman Sachs (Malaysia) Sdn. Bhd. (“GS Malaysia”).

• Influence to be Obtained
• According to the DOJ, from 2009 and 2014, individuals at Goldman Sachs and GS Malaysia conspired to violate the anti-bribery provision of the FCPA by engaging in a scheme to pay bribes to high-ranking Malaysian and Abu Dhabi government officials to obtain business for GS. The business sought included securing a role in underwriting approximately $6.5 billion in bond deals for 1Malaysia Development Bhd. (“1MDB”), a state-owned fund for investment and development projects. GS earned hundreds of millions in fees for the bond deals.
  
  As we previously reported, funds raised by 1MDB were misappropriated by Low Taek Jho, a Malaysian national who worked as an intermediary between 1MDB and other foreign government officials, and two managing directors at GS responsible for GS’s relationship with 1MDB, Ng Chong Hwa, a Malaysian national, and Tim Leissner, a German national. According to DOJ, Leissner, Ng, and others at GS conspired with Low to pay more than $1.6 billion in bribes. In November 2018, the DOJ announced that Leissner and Ng were charged with conspiracy to commit money laundering and conspiracy to violate the FCPA. Leissner pleaded guilty and Ng is scheduled to stand trial in March 2021.
  
  According to the DOJ, GS employees and executives to investigate red flags, perform an internal review of GS’s role in relevant bond deals, and escalate concerns about bribery and other criminal conduct. Specifically, these individuals “knew that any transaction involving Low posed a significant risk, and although they were on notice that Low was involved in the transactions, they did not take reasonable steps to ensure that Low was not involved.” Further, DOJ noted that “significant red flags…either were ignored or only nominally addressed so that the transactions would be approved and Goldman could continue to do business with 1MDB.” The DOJ stated that had the control function reviewed Leissner’s emails when it inquired about the deal’s connections to Low, GS would have discovered Low’s involvement in the deals and related misconduct.

• Enforcement
• On October 22, 2020, the DOJ entered into a three-year deferred prosecution agreement with GS, pursuant to which GS agreed to pay a criminal monetary penalty of $1.26 billion. GS Malaysia pleaded guilty to a one-count information charging conspiracy to violate the FCPA. GS Malaysia’s $500,000 criminal monetary penalty is included in the $1.26 billion total.
  
  GS received a ten percent discount off the recommended minimum sentence under the U.S. Sentencing Guidelines for its partial cooperation and full remediation. The DOJ noted GS’s remedial measures, including “implementing heightened controls and additional procedures and policies related to electronic surveillance and investigation, due diligence on proposed transactions or clients and the use of third-party intermediaries” and “enhancing anti-corruption training for all management and relevant employees.”
  
  On October 22, 2020, the SEC settled its enforcement action against GS for violating the anti-bribery, books and records, and internal controls provisions of the FCPA. GS was ordered to pay a civil money penalty of $400 million and disgorgement of $606 million. The DOJ and SEC settlements are part of a coordinated resolution with various law enforcement agencies domestically and internationally for $3.17 billion. Both the DOJ and SEC have agreed to credit the disgorgement amount to GS’s payment to the Government of Malaysia.

• Amount of the Value
• About $1.6 billion.

• Amount of Business Related to Payment
• About $6.5 billion.

• Intermediary
• Third-party agent.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 1,260,000,000

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 3,170,000,000

• Related Enforcement Actions
• In the Matter of The Goldman Sachs Group, Inc. (2020)
  In the Matter of The Goldman Sachs Group, Inc. (2020)
  

The Goldman Sachs Group, Inc.

• Citation
• United States v. The Goldman Sachs Group, Inc., 20 Cr. 00437 (E.D.N.Y. 2020).

• Date Filed
• 10/22/2020

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery

• Other Statutory Provision
• None. 

• Disposition
• Deferred Prosecution Agreement, Deferred Prosecution Agreement

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States

• Individual Sanction
• $1.26 billion.

Goldman Sachs (Malaysia) Sdn. Bhd.

• Citation
• United States v. Goldman Sachs (Malaysia) Sdn. Bhd., 20 Cr. 00438 (E.D.N.Y. 2020).

• Date Filed
• 10/22/2020

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery

• Other Statutory Provision
• None.

• Disposition
• Plea Agreement, Plea Agreement

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States

• Individual Sanction
• $500,000