Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Tim Leissner, the disgraced former Goldman Sachs banker at the heart of the multibillion-dollar 1MDB scandal, has been sentenced to two years in prison, in a coda to one of the most infamous Wall Street prosecutions in history.
Leissner, who faced up to 25 years in prison, told a New York federal judge that he stood before her “in shame”, admitting that what he had done was “very wrong”. Dressed in a dark suit, he grew emotional when he mentioned one of his daughters recently being rushed to an emergency spine surgery after a car accident. Not being by her side was an “unbearable torture”, he said as he reached for tissues.
Leissner’s sentence marks a milestone in US law enforcement’s investigation into the 1MDB affair, in which Goldman bankers helped corrupt Malaysian officials misappropriate about $4.5bn from its sovereign wealth fund, according to prosecutors. Leissner pleaded guilty early in the investigation and agreed to co-operate with prosecutors, testifying in the trial of one of his former colleagues, Roger Ng.
Goldman admitted paying more than $1bn in bribes to obtain underwriting work and paid nearly $3bn in criminal fines under a resolution with the US Department of Justice, in a saga that spanned Malaysia, the Middle East, Switzerland and the US, engulfing high-flying financiers and politicians alike. The case also led to the prosecution of Malaysia’s prime minister at the time, Najib Razak, who was convicted and ultimately sentenced to six years in prison.
Ng was sentenced to 10 years in prison in 2023 after a New York jury found him guilty of bribery and money laundering. Razak, who founded 1MDB, is fighting his prison sentence in Kuala Lumpur.
Leissner testified how he steered Goldman’s arrangement of three 1MDB bond deals in 2012 and 2013, which raised about $6.5bn before the ex-banker helped siphon more than $2.7bn from the Malaysian fund.
He told the court that he spent his share of the stolen 1MDB proceeds, about $60mn, on a 170ft yacht and real estate in New York and London as well as investments in Italian football team Inter Milan.
The bank’s general counsel Kathryn Ruemmler wrote to the judge this month to say Leissner “extensively lied to and deceived many people” at the Wall Street group and “has still not repaid one penny” of a $20.7mn arbitration award that a court in 2023 said he owes Goldman.
Read the full article here
