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Malaysia Files Criminal Charges Against 17 Goldman Sachs Representatives

The U.S. bank has been under inspection for its role in helping to raise $6.5 billion via bond offerings for 1Malaysia Development Berhad (1MDB), the subject of fraud and money laundering probes in at least six countries.

However, Malaysian prosecutors have said $2.7 billion of the proceeds were turned, and the offering reports filed with the regulators included statements that were fake, misleading or involved material omissions.

Friday’s charges were brought under a section of the Malaysian Capital Markets and Services Act that holds specific senior executives liable for offenses that may have been executed by the firm, Attorney-General Tommy Thomas said.

Those accused on Friday include Richard Gnodde, chief executive of Goldman Sachs International, Michael Evans, president of Alibaba and a former director at Goldman Sachs (Asia) and Michael Sherwood, former vice-chairman of the group.

An Alibaba spokesperson stated the company was aware of the charges against Evans and would continue to observe the situation.

The charges say the Goldman Sachs units omitted material details in the bond offerings, among them that Malaysian financier Low Taek Jho was the director and critical middleman for 1MDB.

Malaysian and U.S. authorities have described authorities as the vital player in the 1MDB fraud scandal. He has dismissed wrongdoing, and his whereabouts are unknown.

Goldman on Friday said 1MDB offered written assurances to the bank for each transaction that no mediators were involved.