Goldman Sachs Ties to Scandal-Plagued 1MDB Run Deep

Bank courted state fund now at heart of global embezzlement probes, and investigators want to know if it should have reported suspicious activity

On a yacht moored at Saint-Tropez, Malaysian Prime Minister Najib Razak talked business with Abu Dhabi’s crown prince. Included in the horseshoe of chairs set up for the July 2013 gathering was a partner from Goldman Sachs Group Inc.

The bank earned its place through years of cultivating Mr. Najib and a state investment fund he founded. Goldman had raised $6.5 billion for the fund and earned nearly $600 million in fees, making the Malaysian client among its most lucrative.

Mr. Najib lavished praise on Goldman, said people familiar with the meeting. “Do you see any other bankers on this boat?” one recalls him saying.

Today Mr. Najib and the state fund, 1Malaysia Development Bhd., or 1MDB, are at the center of what investigators consider one of the largest financial frauds in history. Investigators have said 1MDB was used by the prime minister as a political slush fund and by associates of his to buy more than $1 billion of real estate, art and other luxuries from London to Beverly Hills, Calif.

Among all the firms touched by the scandal, which include banks around the world, Goldman holds a unique position for its closeness to 1MDB and the principals. read more »

Teva to pay U.S. government $519 million over foreign bribery charges

Teva Pharmaceutical Industries (TEVA.TA) agreed to pay more than $519 million to settle U.S. criminal and civil allegations that the company bribed overseas officials to gain business for its medications, the U.S. Department of Justice said on Thursday.

The company paid millions of dollars in bribes to officials in Mexico, Russia and Ukraine to promote its products such as its blockbuster multiple sclerosis drug Copaxone, the Justice Department said. read more »

Brazil 'Carwash' Probe Yields Largest-Ever Corruption Penalty

Odebrecht SA, Latin America’s biggest construction company, and an affiliate agreed to pay more than $3.5 billion to resolve bribery allegations involving Brazil’s state-run oil company, the largest corruption penalty ever levied by global authorities.

Odebrecht pleaded guilty in Brooklyn, New York, on Wednesday to conspiring to pay bribes in violation of the Foreign Corrupt Practices Act. An Odebrecht affiliate, the petrochemicals maker Braskem SA, also pleaded guilty. The two admitted to paying officials of Petroleo Brasileiro SA, the Brazilian oil giant known as Petrobras, to win contracts. read more »

SEC Charges Operators of Fake Day-Trading Firm With Defrauding Inexperienced Investors

The Securities and Exchange Commission today charged two men behind a phony day-trading firm with pocketing more than $1.4 million in deposits from hundreds of defrauded investors worldwide.

The SEC alleges that Naris Chamroonrat of Bangkok, Thailand, recruited Adam L. Plumer of Las Vegas to help him lure investors to day-trade through an unregistered brokerage firm called Nonko Trading with promises of generous leverage, low trading commissions, and low minimum deposit requirements.  According to the SEC’s complaint, rather than using a live securities trading platform, Nonko Trading provided certain investors with training accounts that merely simulated the placement and execution of trade orders.  So when these investors sent funds to Nonko Trading and proceeded to place trade orders, they were never actually routed to the markets.  The SEC alleges that investor money was instead used to fund Chamroonrat’s personal expenses, pay Plumer and other associates, and make Ponzi-like payments to investors who asked to close their accounts. read more »

Construction Companies, Senior Corporate Officers to Pay $1M to Settle False Claims Act Allegations

Rosciti Construction, Wallace Construction, four senior officers improperly sought reimbursement of funding reserved for minority-owned and women-owned businesses

PROVIDENCE – United States Attorney Peter F. Neronha announced today that Rhode Island-based Rosciti Construction Corporation and Wallace Construction Corporation, together with four of the companies’ current and former owners and officers, will pay $1 million dollars to resolve civil allegations that they violated the Federal False Claims Act by submitting, or causing the submission of, claims for reimbursement for funding earmarked for minority, women-owned, or small business that they were not entitled to receive. read more »

Nigerian Government okays 5% reward to whistle blowers in anti-graft fight

The Federal Government yesterday announced a policy, which offers a five percent financial reward to any whistle blower whose information leads to recovery ‎of looted funds and other monies obtained through fraudulent means.

Tagged ‘Whistle Blowing Programme,’ it is aimed at encouraging anyone with information about a violation, misconduct or improper activity that impacts negatively on the Nigerian people and government to report it.

Official reward for whistle blowers will strengthen the fight against corruption by encouraging more Nigerians to identify with government’s efforts in that regard. read more »