Money-laundering case is hanging over Goldman

EVEN as Goldman Sachs is gaining a more prominent profile in the administration of Donald J Trump, the Wall Street investment firm is undergoing scrutiny in a sprawling international money laundering and embezzlement scheme.

Prosecutors have said that billions of dollars that Goldman raised for a Malaysian government investment fund were channelled into a web of personal bank accounts and was ultimately used to buy paintings and luxury real estate.

Investigators are questioning what Goldman knew about the final use of the money.

Goldman has said that it believed the money was being used to buy legitimate assets for the investment fund, which was run in part by the Malaysian government and its embattled prime minister, Najib Razak.

In recent months, lawyers for Goldman have presented information about its dealings with the Malaysian fund to federal prosecutors and the New York Department of Financial Services, according to people briefed on the matter.

The 1MDB case has become a signature campaign in the global effort by prosecutors to crack down on kleptocracy and the relative ease with which the super wealthy have managed to move their money beyond the oversight of government authorities.

The Justice Department has shown an interest in the role that American banks and law firms have played in hiding assets of the super wealthy.

Singapore’s central bank said recently said that it was barring Tim Leissner, the main Goldman banker who worked with the Malaysian investment fund, from the local securities industry.

This week, an employee of a Swiss bank was found guilty in a Singapore court of trying to obstruct the investigation into the case. Two other Swiss bankers involved in the case have already pleaded guilty in Singapore.

And on Thursday, the Wall Street Journal reported that the highest ranking officials at Goldman, including the firm’s former president, Gary Cohn, were tracking and approving the transactions with 1MDB.

Both Goldman Sachs and the Justice Department declined to comment.