MANHATTAN (CN) – Goldman Sachs faces a summons with notice for fraud on the heels of its former executive’s guilty plea to criminal charges stemming from the multibillion 1MDB scandal.
Filed on Wednesday in Manhattan Supreme Court, the summons casts International Petroleum Investment Company and Aabar Investments PJS as two victims of the massive money-laundering scheme rooted in Malaysia.
At least $4.5 billion is believed to have been looted from the investment development fund 1Malaysia Development Berhad, and Goldman’s former Southeast Asia chairman Tim Leissner, pleaded guilty on Nov. 1 to having laundered more than $2.7 billion of those proceeds.
Malaysia created 1MDB in 2009 as a way to stimulate economic growth, but the project was quickly infiltrated by a multibillion-dollar embezzlement scheme whose proceeds were laundered around the world. As traced in earlier court papers, the money flowed among other places through art auctions, luxury New York City real estate and Hollywood production companies, one of which produced the Oscar-nominated Martin Scorsese film “The Wolf of Wall Street.”
Leissner admitted that he bribed officials in Malaysia and Abu Dhabi so that the investment development fund would execute lucrative bond deals with Goldman.
Monday’s summons with notice meanwhile comes from two entities that say their executives were targeted by those bribes.
Goldman and Leissner are named as defendants, as are Ng Chong Hwa aka Roger Ng, Andrea Vella, Khadem Abdulla al Qubaisi and Mohamed Ahmed Badawy al-Husseiny.
“As part of the scheme, Goldman Sachs conspired with others to bribe IPIC’s and Aabar’s former executives, defendants Al Qubaisi (the former managing director of IPIC and chairman of Aabar) and Al-Husseiny (the former CEO of Aabar), to induce them to join the conspiracy and act against the interests of IPIC and Aabar,” the 4-page filing states.
“In exchange for the bribes paid by Goldman Sachs and its co-conspirators, Al Qubaisi and Al- Husseiny agreed to manipulate and mislead IPIC and Aabar, and to misuse the companies’ names, networks, and infrastructures to further the criminal schemes and to personally benefit Goldman Sachs, Al Qubaisi, Al-Husseiny, and their co-conspirators at IPIC’s and Aabar’s expense,” it continues. “IPIC and Aabar expressly reserve the right to name additional individuals and entities as defendants.”
After Malaysia’s finance minister said he would seek a full refund of all the fees it paid for 1MDB deals, the fund saw its biggest fall in seven years on Nov. 12.
Seeking unspecified damages, IPIC and Aabar are represented by Michael Carlinsky with Quinn Emanuel. They are expected to file a full complaint in the next two to three weeks.
“We are in the process of assessing the details of allegations and fully expect to contest the claim vigorously,” a Goldman Sachs spokesman said in a statement last week, reacting to news of the suit.