The Pastoral Plays Of Jorge: DOJ Pops Goldman Sachs In $2.9 Billion Bribery FCPA Case - More To Come

Jorge has been busy, busy, busy!

Where is Melanie?

Happy Fratelli Tuttii!

#maytheheavensfall

Goldman Sachs Charged in Foreign Bribery Case and Agrees to Pay Over $2.9 Billion

The Goldman Sachs Group Inc. (Goldman Sachs or the Company), a global financial institution headquartered in New York, New York, and Goldman Sachs (Malaysia) Sdn. Bhd. (GS Malaysia), its Malaysian subsidiary, have admitted to conspiring to violate the Foreign Corrupt Practices Act (FCPA) in connection with a scheme to pay over $1 billion in bribes to Malaysian and Abu Dhabi officials to obtain lucrative business for Goldman Sachs, including its role in underwriting approximately $6.5 billion in three bond deals for 1Malaysia Development Bhd. (1MDB), for which the bank earned hundreds of millions in fees.  Goldman Sachs will pay more than $2.9 billion as part of a coordinated resolution with criminal and civil authorities in the United States, the United Kingdom, Singapore, and elsewhere. 

Goldman Sachs entered into a deferred prosecution agreement with the department in connection with a criminal information filed today in the Eastern District of New York charging the Company with conspiracy to violate the anti-bribery provisions of the FCPA.  GS Malaysia pleaded guilty in the U.S. District Court for the Eastern District of New York to a one-count criminal information charging it with conspiracy to violate the anti-bribery provisions of the FCPA. 

Previously, Tim Leissner, the former Southeast Asia Chairman and participating managing director of Goldman Sachs, pleaded guilty to conspiring to launder money and to violate the FCPA.  Ng Chong Hwa, also known as “Roger Ng,” former managing director of Goldman and head of investment banking for GS Malaysia, has been charged with conspiring to launder money and to violate the FCPA.  Ng was extradited from Malaysia to face these charges and is scheduled to stand trial in March 2021.  The cases are assigned to U.S. District Judge Margo K. Brodie of the Eastern District of New York.

In addition to these criminal charges, the department has recovered, or assisted in the recovery of, in excess of $1 billion in assets for Malaysia associated with and traceable to the 1MDB money laundering and bribery scheme.   

“Goldman Sachs today accepted responsibility for its role in a conspiracy to bribe high-ranking foreign officials to obtain lucrative underwriting and other business relating to 1MDB,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “Today’s resolution, which requires Goldman Sachs to admit wrongdoing and pay nearly three billion dollars in penalties, fines, and disgorgement, holds the bank accountable for this criminal scheme and demonstrates the department’s continuing commitment to combatting corruption and protecting the U.S. financial system.”

“Over a period of five years, Goldman Sachs participated in a sweeping international corruption scheme, conspiring to avail itself of more than $1.6 billion in bribes to multiple high-level government officials across several countries so that the company could reap hundreds of millions of dollars in fees, all to the detriment of the people of Malaysia and the reputation of American financial institutions operating abroad,” said Acting U.S. Attorney Seth D. DuCharme of the Eastern District of New York.  “Today’s resolution, which includes a criminal guilty plea by Goldman Sachs’ subsidiary in Malaysia, demonstrates that the department will hold accountable any institution that violates U.S. law anywhere in the world by unfairly tilting the scales through corrupt practices.”

“When government officials and business executives secretly work together behind the scenes for their own illegal benefit, and not that of their citizens and shareholders, their behavior lends credibility to the narrative that businesses don’t succeed based on the quality of their products, but rather their willingness to play dirty,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.  “Greed eventually exacts an immense cost on society, and unchecked corrupt behavior erodes trust in public institutions and government entities alike.  This case represents the largest ever penalty paid to U.S. authorities in an FCPA case.  Our investigation into the looting of funds from 1MDB remains ongoing. If anyone has information that could assist the case, call us at 1-800-CALLFBI.”

“1MDB was established to drive strategic initiatives for the long-term economic development of Malaysia. Goldman Sachs admitted today that one billion dollars of the money earmarked to help the people of Malaysia was actually diverted and used to pay bribes to Malaysian and Abu Dhabi officials to obtain their business,” said Special Agent in Charge Ryan L. Korner of IRS Criminal Investigation’s (IRS-CI) Los Angeles Field Office.  “Today’s guilty pleas demonstrate that the law applies to everyone, including large investment banks like Goldman Sachs.  IRS Criminal Investigation will work tirelessly alongside our law enforcement partners to identify and bring to justice those who engage in fraud and deceit around the globe.  When the American financial system is misused for corruption, the IRS will take notice and we will take action.”

According to Goldman’s admissions and court documents, between approximately 2009 and 2014, Goldman conspired with others to violate the FCPA by engaging in a scheme to pay more than $1.6 billion in bribes, directly and indirectly, to foreign officials in Malaysia and Abu Dhabi in order to obtain and retain business for Goldman from 1MDB, a Malaysian state-owned and state-controlled fund created to pursue investment and development projects for the economic benefit of Malaysia and its people.  Specifically, the Company admitted to engaging in the bribery scheme through certain of its employees and agents, including Leissner, Ng, and a former executive who was a participating managing director and held leadership positions in Asia (Employee 1), in exchange for lucrative business and other advantages and opportunities.  These included, among other things, securing Goldman’s role as an advisor on energy acquisitions, as underwriter on three lucrative bond deals with a total value of $6.5 billion, and a potential role in a highly anticipated and even more lucrative initial public offering for 1MDB’s energy assets.  As Goldman admitted — and as alleged in the indictment pending in the Eastern District of New York against Ng and Low — in furtherance of the scheme, Leissner, Ng, Employee 1, and others conspired to pay bribes to numerous foreign officials, including high-ranking officials in the Malaysian government, 1MDB, Abu Dhabi’s state-owned and state-controlled sovereign wealth fund, International Petroleum Investment Company (IPIC), and Abu Dhabi’s state-owned and state-controlled joint stock company, Aabar Investments PJS (Aabar). 

Goldman admitted today that, in order to effectuate the scheme, Leissner, Ng, Employee 1, and others conspired with Low Taek Jho, aka Jho Low, to promise and pay over $1.6 billion in bribes to Malaysian, 1MDB, IPIC, and Aabar officials.  The co-conspirators allegedly paid these bribes using more than $2.7 billion in funds that Low, Leissner, and other members of the conspiracy diverted and misappropriated from the bond offerings underwritten by Goldman.  Leissner, Ng and Low also retained a portion of the misappropriated funds for themselves and other co-conspirators.  Goldman admitted that, through Leissner, Ng, Employee 1 and others, the bank used Low’s connections to advance and further the bribery scheme, ultimately ensuring that 1MDB awarded Goldman a role on three bond transactions between 2012 and 2013, known internally at Goldman as “Project Magnolia,” “Project Maximus,” and “Project Catalyze.” 

Goldman also admitted that, although employees serving as part of Goldman’s control functions 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.  Goldman further admitted that there were significant red flags raised during the due diligence process and afterward — including but not limited to Low’s involvement — that either were ignored or only nominally addressed so that the transactions would be approved and Goldman could continue to do business with 1MDB. As a result of the scheme, Goldman received approximately $606 million in fees and revenue, and increased its stature and presence in Southeast Asia.

Under the terms of the agreements, Goldman will pay a criminal penalty and disgorgement of over $2.9 billion.  Goldman also has reached separate parallel resolutions with foreign authorities in the United Kingdom, Singapore, Malaysia, and elsewhere, along with domestic authorities in the United States.  The department will credit over $1.6 billion in payments with respect to those resolutions.

The department reached this resolution with Goldman based on a number of factors, including the Company’s failure to voluntarily disclose the conduct to the department; the nature and seriousness of the offense, which included the involvement of high-level employees within the Company’s investment bank and others who ignored significant red flags; the involvement of various Goldman subsidiaries across the world; the amount of the bribes, which totaled over $1.6 billion; the number and high-level nature of the bribe recipients, which included at least 11 foreign officials, including high-ranking officials of the Malaysian government; and the significant amount of actual loss incurred by 1MDB as a result of the co-conspirators’ conduct.  Goldman received partial credit for its cooperation with the department’s investigation, but did not receive full credit for cooperation because it significantly delayed producing relevant evidence, including recorded phone calls in which the Company’s bankers, executives, and control function personnel discussed allegations of bribery and misconduct relating to the conduct in the statement of facts.  Accordingly, the total criminal penalty reflects a 10 percent reduction off the bottom of the applicable U.S. sentencing guidelines fine range. 

Low has also been indicted for conspiracy to commit money laundering and violate the FCPA, along with Ng, E.D.N.Y. Docket No. 18-CR-538 (MKB).  Low remains a fugitive.  The charges in the indictment as to Low and Ng are merely allegations, and those defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The investigation was conducted by the FBI’s International Corruption Unit and IRS-CI.  The prosecution is being handled by the Criminal Division’s Fraud Section and the Money Laundering and Asset Recovery Section (MLARS), and the Business and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York.  Trial Attorneys Katherine Nielsen, Nikhila Raj, Jennifer E. Ambuehl, Woo S. Lee, Mary Ann McCarthy, Leo Tsao, and David Last of the Criminal Division, and Assistant U.S. Attorneys Jacquelyn M. Kasulis, Alixandra Smith and Drew Rolle of the Eastern District of New York are prosecuting the case.  Additional Criminal Division Trial Attorneys and Assistant U.S. Attorneys within U.S. Attorney’s Offices for the Eastern District of New York and Central District of California have provided valuable assistance with various aspects of this investigation, including with civil and criminal forfeitures.  The Justice Department’s Office of International Affairs of the Criminal Division provided critical assistance in this case. 

The department also appreciates the significant assistance provided by the U.S. Securities and Exchange Commission; the Board of Governors of the Federal Reserve System, including the Federal Reserve Bank of New York; the New York State Department of Financial Services, the United Kingdom Financial Conduct Authority; the United Kingdom Prudential Regulation Authority; the Attorney General’s Chambers of Singapore; the Singapore Police Force-Commercial Affairs Division; the Monetary Authority of Singapore; the Office of the Attorney General and the Federal Office of Justice of Switzerland; the judicial investigating authority of the Grand Duchy of Luxembourg and the Criminal Investigation Department of the Grand-Ducal Police of Luxembourg; the Attorney General’s Chambers of Malaysia; the Royal Malaysian Police; and the Malaysian Anti-Corruption Commission.  The department also expresses its appreciation for the assistance provided by the Ministry of Justice of France; the Attorney General’s Office of the Bailiwick of Guernsey and the Guernsey Economic Crime Division.

The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal-fraud/foreign-corrupt-practices-act.

MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.

MLARS’s Kleptocracy Asset Recovery Initiative, in partnership with federal law enforcement agencies, and often with U.S. Attorney’s Offices, seeks to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office.

Relevant court documents will be uploaded throughout the day and available at the following links: The Goldman Sachs Group Inc. and Goldman Sachs Sdn. Bhd.

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Tales Of The New Crown: Egmont Group Is All Up In The Vatican IOR

The Egmont Group was up in the IOR, too?

I really need to start looking for who was not all up into trafficking tiny humans.

#maytheheavensfall

As Vatican faces financial review, pope condemns ‘idolatry’ of neoliberal economy

ROME – Pope Francis Thursday condemned the prioritizing of money over people and touted several steps the Holy See has taken to ensure financial transparency.

The pope was speaking to representatives of Moneyval, the Council of Europe’s anti-money laundering watchdog, who are in Rome conducting its annual review of the Vatican, following a year of money-related scandals.

The pope thanked them for the visit, saying their work is “dear to my heart” because it is closely tied to “the protection of life, the peaceful coexistence of the human race on earth, and a financial system that does not oppress those who are weakest and in greatest need.”

“It is all linked together,” he said, and pointed to his new encyclical Fratelli Tutti, in which he condemned neoliberal economic structures as having failed in the wake of the COVID-19 coronavirus, calling for resources to be invested in development in impoverished countries to end hunger and assure citizens of a dignified life, rather than in “fear or nuclear, chemical and biological threats.”

Catholic social teaching, he said, “has underscored the error of the neoliberal dogma which holds that the economic and moral orders are so completely distinct from one another that the former is in no way dependent on the latter.”

“In light of the present circumstances, it would seem that the worship of the ancient golden calf has returned in a new and ruthless guise in the idolatry of money and the dictatorship of an impersonal economy lacking a truly human purpose,” he said, insisting that “financial speculation fundamentally aimed at quick profit continues to wreak havoc.”

Francis’s remarks echo sentiments expressed in Fratelli Tutti, published Oct. 4, and in which he argued that in many countries, “a concept of popular and national unity influenced by various ideologies is creating new forms of selfishness and a loss of the social sense under the guise of defending national interests.”

Lack of concern for the poor and vulnerable “can hide behind a populism that exploits them demagogically for its own purposes, or a liberalism that serves the economic interests of the powerful,” he said, noting that in both cases, “it becomes difficult to envisage an open world that makes room for everyone, including the most vulnerable, and shows respect for different cultures.”

“It seems that in many places the supremacy of money over human beings is taken for granted,” he said in Thursday’s remarks, noting that at times, “in the effort to amass wealth, there is little concern for where it comes from, the more or less legitimate activities that may have produced it, and the mechanisms of exploitation that may be behind it.”

“Thus, situations can occur where, in touching money, we get blood on our hands, the blood of our brothers and sisters,” he said.

The Moneyval representatives are in Rome to review the Holy See’s efforts to fight money laundering and financial terrorism. The review comes after a year of financial scandal that has left many wondering whether the Vatican might be blacklisted, meaning it would be frozen out of international markets and could face higher financial transaction costs.

In 2009 the Vatican signed onto the EU Monatery Convention, thus submitting to the body’s evaluation process, in an effort to clean up its financial image, which for a longtime had been seen as an offshore tax haven laden with scandal.

In the past, Moneyval has criticized the Vatican for failing to follow-up on dozens of suspicious transaction reports from the Financial Information Authority (AIF), the Vatican’s financial watchdog. However, last year Vatican prosecutors opened an investigation into a shady London property deal in which the Vatican’s Secretariat of State sunk some 350 million euros (nearly $400 million) into the property using funds donated to papal charities.

An investigation was launched after the Secretariat of State requested a loan from the Vatican bank to buy the property, reportedly without following reporting requirements under new financial transparency laws decreed by Francis earlier this year. Several officials have been fired or suspended amid the investigation; however, so far non one has been indicted.

As part of that initial inquest, the Vatican police seized documents from the AIF’s offices, leading the Vatican being to be temporarily suspended from The Egmont Group, the world’s main international anti-money laundering federation, over security concerns.

The Egmont Group readmitted the Vatican in late January, despite the fact that in the meantime the head of AIF, Swiss lawyer Rene Brülhart and a former vice-chair of the Egmont Group, was forced out of his Vatican position the previous November.

On Sept. 24, Pope Francis fired Italian Cardinal Angelo Becciu from his post as head of the Vatican’s saint-making office.

– who in his previous role as sostituto, or “substitute,” in the Secretariat of State, a position traditionally likened to the Chief of Staff for a U.S. president – from his post as head of the Vatican’s saint-making office.

Becciu served as sostituto in the Secretariat of State from 2011-2018 – the sostituto, or “substitute,” is a position traditionally likened to the Chief of Staff for a U.S. president – meaning the London deal happened under his watch. Becciu has denied any fault in the matter and has insisted that his ousting was related to allegations that he gave Holy See contracts to companies run by his brothers – accusations which he denies.

Speaking to Moneyval representatives, Pope Francis stressed that policies meant to counter money laundering and terrorism “are a means of monitoring movements of money and of intervening in cases where irregular or even criminal activities are detected.”

Referring to the Gospel passage in which Jesus drove merchants from the temple, he said that “once the economy loses its human face, then we are no longer served by money, but ourselves become servants of money.”

“This is a form of idolatry against which we are called to react by reestablishing the rational order of things, which appeals to the common good whereby money must serve, not rule,” he said.

To this end, Francis highlighted several new laws the Vatican has introduced this year aimed at “ensuring transparency” in its financial affairs preventing financial crimes, including a June 1 procurement law meant to combat nepotism and feudalism by centralizing control over the awarding of contracts for goods and services in the Administration of the Patrimony of the Apostolic See (APSA), the body managing the Vatican’s assets.

He also pointed to an Aug. 18 Ordinance of the President of the Governorate requiring volunteer organizations and juridical persons of the Vatican City State to report suspicious activities to AIF.

Though he did not mention it in his speech, Francis on Oct. 5 established a new commission charged with determining which of the Vatican’s economic activities should remain confidential, judging on a case-by-case basis.

Pope Francis closed Thursday’s remarks by thanking Moneyval reps for “the service you provide,” saying the measures and structures they are evaluating are designed to promote “a clean finance, in which the merchants are prevented from speculating in that sacred temple which, in accordance with the Creator’s plan of love, is humanity.”

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