Goldman accuses 1MDB banker of ‘serial lies’ ahead of sentencing

NEW YORK – Goldman Sachs Group said the banker at the heart of a scandal linked to Malaysia’s 1MDB investment fund engaged in “serial lies” and deception about the fraud, days before he is scheduled to be sentenced.

In a letter to a US judge, Goldman said that Tim Leissner, the bank’s former South-east Asia chairman, has never taken responsibility for his actions in the multi-billion-dollar fraud that brought down the Malaysian government.

The letter comes after the US government asked for leniency when Leissner is sentenced next week.

The bank’s general counsel, Ms Kathryn Ruemmler, wrote that Leissner’s attempt to blame the financial industry for his crimes “denigrates the countless law-abiding people who work in it and draws focus on the true motivation for Mr Leissner’s crimes: greed”.

Leissner, who pleaded guilty in 2018 to his role in looting billions from 1MDB, became the US government’s key witness.

Prosecutors say his testimony was central to the conviction of one of his Goldman colleagues and a US$2.9 billion (S$3.8 billion) fine against the bank, the largest ever in a foreign bribery case.

“Leissner spent years using offshore shell companies, personal email accounts and personal devices to engage in crime, evade detection and put Goldman Sachs at risk in the process,” Ms Ruemmler wrote in the letter, filed in Brooklyn, New York, on May 22. 

Leissner, 53, faces as much as 25 years in prison after he became the face of the global financial scandal that led to investigations in six countries.

As part of the fraud, he admitted that he pocketed US$73.4 million from 1MDB and another US$80 million from Jho Low, the fugitive financier who was the architect of the fraud.

Mr Henry Mazurek, Leissner’s lawyer, said “the chutzpah of Goldman Sachs’s letter to the court today is astounding”.

“Mr Leissner spent the last several years cooperating with the Department of Justice to expose the corporate culture and institutional greed which fuelled the behaviour that corrupted the 1MDB project,” Mr Mazurek said in a statement.

Goldman and a spokesman for US prosecutors declined to comment.

Prosecutors said in their own court filing that Leissner continues to help with unidentified US investigations into “other crimes”, in addition to the 1MDB case.

“Leissner provided information concerning the role of powerful individuals in a global scheme to bribe government officials in two countries and divert billions of dollars into bank accounts around the world,” prosecutors said in a filing earlier in May.

But the bank countered that “from Goldman’s perspective, Mr Leissner’s efforts in this regard are deserving of sanction, not praise”.

In 2020, Goldman, which made US$600 million from the 1MDB transactions, entered into a deferred prosecution agreement with the US and its Malaysian unit pleaded guilty to violating US anti-bribery laws.

The New York-based investment bank said in the letter on May 22 that it did not “adequately address red flags and scrutinise the representations of certain members of the deal team”.

In his own filing, Leissner said that he should be spared any time in prison.

He said he provided crucial evidence against former Malaysian Prime Minister Najib Razak, Abu Dhabi sheiks and Goldman and gave the US a road map to the complex money-laundering scheme at 1MDB.

“I know how terrible my crime was,” Leissner said in a letter to the judge. “In the process of telling the government and the world about 1MDB, I have had to publicly face the fact that I helped steal billions of dollars not just from individuals, but from an entire nation.”

When he pleaded guilty in August 2018, Leissner blamed Goldman’s “culture” as playing a role in the fraud when he described his crimes.

“During the course of the conspiracy, I conspired with other employees and agents of Goldman Sachs very much in line with its culture of Goldman Sachs to conceal facts from certain compliance and legal employees of Goldman Sachs, including Jho Low,” he said in court.

Leissner could still face legal actions in Malaysia.

The country’s Home Minister Saifuddin Nasution Ismail said earlier in May that Malaysia has submitted an extradition request for Leissner’s arrest with the US Justice Department. BLOOMBERG