The United States Department of Justice on Thursday said a subsidiary of multinational financial services company Goldman Sachs has agreed to pay more than $2.9 billion (over Rs 21,300 crore) over its role in Malaysia’s 1MDB corruption scandal, AFP reported. The fine amount is the highest penalty ever in a corruption case in the US.

Acting US Assistant Attorney General Brian C Rabbitt said Goldman Sachs Malaysia “accepted responsibility” in the case that involves $1.6 billion, or over Rs 11,700 crore, in bribes, the largest ever recorded.

Goldman Sachs had helped raise $6.5 billion, or over 47,800 crore, for the Malaysian government’s sovereign wealth fund. The US Justice Department said over $4.5 billion, or more than 33,100 crore, was stolen from 1MDB by high-ranking officials and their associates between 2009 and 2015.

The investment fund “was looted by corrupt officials and their co-conspirators, including senior Goldman bankers” turning it “into a piggy bank for corrupt public officials and their cronies,” Rabbitt said.

The Malaysian unit of the company pleaded guilty for violations of American bribery laws as part of a deal to end the criminal investigation in the case that included authorities in nine countries. As part of the deal, the guilty plea could reduce the activities of the Malaysian unit but permits the parent company from avoiding admitting wrongdoing in court.

Goldman Sachs, the parent company, pleaded not guilty in court. It accepted “deferred prosecution” for three and a half years during which it will be monitored by regulators. The Justice Department has charged three persons in the case. Former Southeast Asia Chairman of the company Tim Leissner has pleaded guilty. Ng Chong Hwa, also known as “Roger Ng,” former chief of investment banking for Goldman Sachs Malaysia, is awaiting trial. Low Taek Jho, a Malaysian businessman, remains a fugitive.

“While it is abundantly clear that certain former employees broke the law, lied to our colleagues and circumvented firm controls, this fact does not relieve me or anyone else at the firm of our responsibility to recognize two critical realities.” 

— Chief Exectuive Officer at Goldman Sachs David Solomon

Further, several current and former high-level executives at the company, who were in charge of the fund when the scam unfolded, will have to return millions of dollars in pay and bonuses to the company in form of financial penalty, according to AP. The top executives include current Chief Executive Officer David Solomon and Lloyd Blankfein, the former chief. The board of the company said more than $174 million will be returned.

“The board views the 1MDB matter as an institutional failure, inconsistent with the high expectations it has for the firm,” Goldman’s board said in a separate statement.

The 1MDB fund was set up by former Malaysian Prime Minister Najib Razak in 2009 to promote economic development. The court records showed that the fund mostly relied on debt to fund investment and economic development projects. It was overseen by senior Malaysian government officials.

The corruption allegations from the 1MDB fund had led to the defeat of Razak in the 2018 elections. US and Malaysian prosecutors had alleged that bond sales organised by Goldman Sachs Malaysia catered to the associates of the former prime minister to steal billions from the fund.