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Goldman Sachs Ensnarled in Vast 1MDB Fraud Scandal

354 points by SREinSF 8y ago

empath75 8y ago
More background: https://www.bloomberg.com/news/articles/2018-05-24/how-malaysia-s-1mdb-scandal-shook-the-financial-world-quicktake https://www.bloomberg.com/news/articles/2018-05-24/how-malay... How he spent the money: https://thecoverage.my/news/jho-low-threw-wildest-billion-dollar-party-vegas-history-armed-infinite-supply-cash-wildest-party-vegas-ever-saw/ https://thecoverage.my/news/jho-low-threw-wildest-billion-do...
- deleted 8y ago
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chollida1 8y ago
I've heard that subsidiaries of the big accounting firms are essentially separate companies and really just share the firms name, I'm not sure if that's true or not but in the case of the main Wall Street firms, its most definitely is not. Goldman is Goldman everywhere which makes this more concerning. Even more troubling are reports that the new GS CEO, David Solomon, reviewed multiple of the 1MDB deals. To be fair its not clear if he personally reviewed them or they were just a meeting note in a senior partners meeting. Going in GS favour is that they fired Leissner, the GS point man, when the allegations originally came out in 2016 and they self reported the incident, though its not clear if they reported it before the original incident was first reported on. I'd imagine since GS is blaming the bankers ability to circumvent internal controls to catch bribes and kick backs, that things are about to get even more bureaucratic over there. Speculation Also watch for any indication of events that can tie this to the Euro zone. I have a feeling regulators in Europe would love to lay a large fine on a US bank, given how many fines European banks have paid in the US recently:) A research note I just saw, estimated this could cost GS more than $1B in fines in the US alone.
- archildress 8y ago
  Re: the subs of accounting firms, you are absolutely correct. It's not totally unheard of for those firms to switch between affiliate firms as they become unhappy with the relationship. They basically license the brand out, whether they're willing to acknowledge it or not.
- tialaramex 8y ago
  The Big Four are indeed organised as groups. A headquarters entity (three in London, but KPMG is instead based in the Netherlands) owns the name, and then hundreds of notionally independent companies in other countries around the world use that name under license (for a fee and other conditions). In practice obviously that headquarters organisation has considerable control, and key people merrily teleport from one "independent company" to another over their careers. The appropriate word to describe them is probably "corrupt". If I can have two words, how about "very corrupt" ?
  - daviddumenil 8y ago
    A better phrase might be 'multinational partnership'. Big accountancy and legal firms have good historical reasons for those corporate structures.
21 8y ago
There wasn't a year after the global financial crisis which started in 2007 when one or more major banks were not involved in some major scandals, even after all the bailouts and "we'll behave from now on promises": Libor fixing, FX fixing, HSBC money laundering, UBS helping rich clients evade taxes, and so on. I can't think of any other industry where year after year the same 4 or 5 actors are involved in major scandals, yet not one single senior executive goes to jail. As the US general attorney put it, they really are "too big to jail", and they behave accordingly.
- deleted 8y ago
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- drharby 8y ago
  To be clear, this isnt a GS scandal, this is a Malaysian scandal. Goldman just gets more clicks. I mean, bribing gov. Officials is baf, but the bank issued bonds. The fund was plundered by others.
  - coliveira 8y ago
    You must be kidding if you think this is just a Malaysian thing. Nobody does scammy business with a major company like GS without them having a cut of the action. If there is one thing that Wall Street execs are not is stupid. And of course the justice system knows it, otherwise they wouldn't bring changes against them.
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asow92 8y ago
"The money was used to buy [...] as well as to pay for the Hollywood blockbuster “The Wolf of Wall Street.”" Gold.
paulpauper 8y ago
diamond necklaces and Birkin bags as well as to pay for the Hollywood blockbuster “The Wolf of Wall Street.” Najib Razak, what an ironic movie choice
- sorokod 8y ago
  Cynical, not ironic.
murph-almighty 8y ago
>The money was used to buy a Picasso painting, diamond necklaces and Birkin bags as well as to pay for the Hollywood blockbuster “The Wolf of Wall Street.” A scam that funded a movie about scams? True life is stranger than fiction.
- Avshalom 8y ago
  A movie that spent two hours depicting the luxuries bought by scams and zero minutes depicting the real consequences for those that got scammed. With a quick reminder at the end that you can to this day go pay somebody to teach you how to do it yourself.
  - camjohnson26 8y ago
    Boiler Room did a much better job showing both sides of the coin.
    - meddlepal 8y ago
      That movie is rather unappreciated. Definitely worth a watch for folks that haven't seen it.
  - rchaud 8y ago
    The screen adaptations of Gordon Gecko, Patrick Bateman and Jordan Belfort's stories make me think that a lot changes between the time production starts on a screenplay and when the cinema reels roll off the assembly lines. Studio execs do test screens and decide to glamorize the debauchery to extreme levels and give it tons of screen time, because "that's what the people want". So at the end of the movie, you no longer merely empathize with the antagonist, but end up idolizing him. Why else do college bros know the "Greed is Good" speech by heart? Or Bateman's opening monologue in his apartment?
    - toyg 8y ago
      It’s always easier to scapegoat “studio execs” whenever a production has ethical problems. In reality, smart folks like Coppola and Stone know how to play to certain audiences while still selling tickets to the less sophisticated. Most of their movies can be read in opposite terms and it’s absolutely on purpose.
curiousgal 8y ago
So this concerns events that happened in Malaysia, why is the Brooklyn prosecutor office involved? Because of "The Wolf of Wall Street"?
- tomatotomato37 8y ago
  If I'm reading this right it's because the journey the money took while being laundered went through several US financial systems and was orchastrated by the US branch of Goldman Sachs. Or it may just be the fact that some of Jho Lows property being seized is on US soil, and hence is under the juristiciation of US law enforcement; this whole thing is kinda hard to follow.
- tialaramex 8y ago
  Goldman Sachs in an American bank, headquartered in New York City. The bank is subject to the laws of the US, and of New York. The events "happened in Malaysia" only in some very abstract sense that some key players may have been located in Malaysia at some points. The bank though, concretely, remains an American bank throughout. Nobody is going to tell a court that oh, this was actually a Malaysian thing, it's OK for American banks to be corrupt so long as somehow Malaysia is involved, that's fine...
  - jpatokal 8y ago
    Malaysia was way more involved than that. The money in question comes from Malaysian tax payers, and the former prime minister Najib is under arrest because it looks like he channeled $700m of it into his own pockets.
    - coliveira 8y ago
      Yes, but the company in question is GS, which is headquartered in New York.
- AndyMcConachie 8y ago
  It is a federal felony for an American citizen to bribe a foreign official in the course of doing business. Especially if that business involves a company regulated by the SEC. https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act Put in place after the Lockheed Bribery Scandals in the 1970s. https://en.wikipedia.org/wiki/Lockheed_bribery_scandals https://en.wikipedia.org/wiki/Lockheed_bribery_scandals Which incidentally involved Adnan Kashoggi, the uncle of the recently deceased Jamal Kashoggi.
zaroth 8y ago
I somehow hadn’t heard about this one, but seriously, this is just... I have no words. But the part that has completely blown my mind, ... Jho Lo is a fugitive! Federal law enforcement in this country has become a total laughing stock. High profile arrests/pleas for process crimes and 7-day sentences after multi-million dollar investigations, and then this. Where was Treasury? Where was FinCEN? Where were the Feds? To say nothing of the apparently hundreds of people implicated in receiving stolen property. If you receive gifts worth millions of dollars which was stolen money, I mean are they even trying to claw back any of these millions from the “stars” he lavished? To say nothing of the investors who actually bought the bonds of the now bankrupt fund? “A billion here, a billion there, eventually you’re talking about real money.” This guy is a financial terrorist. If you can’t extradite him, legally designate him an enemy combatant and take him out with a Hellfire.
- 21 8y ago
  > are they even trying to claw back any of these millions from the “stars” he lavished? They did: > Australian supermodel Miranda Kerr has turned over jewelry worth $8.1 million to the U.S. Department of Justice that she received from an ex-boyfriend, Malaysian businessman Low Taek Jho, in 2014. > Leonardo DiCaprio has already turned over a Picasso painting worth $3.2 million that he received as a birthday gift from Low as well as a Jean-Michel Basquiat collage valued at $9 million, both of which were listed in the June court filing. https://eu.usatoday.com/story/life/people/2017/06/27/miranda-kerr-returns-8-million-in-jewels-ex-boyfriend-low-taek-jho-bought-with-malaysian-government-funds/103224860/ https://eu.usatoday.com/story/life/people/2017/06/27/miranda...
  - zaroth 8y ago
    Well I guess it’s a start. Now how about the rights and royalties for the movie? IMO, they should be charged as co-conspirators in the fraud.
    - Twirrim 8y ago
      How, exactly, were they to know the gifts were purchased using fraudulent money? At the time they would have received those gifts, Jho Low was believed by most of the world to just be an extremely successful businessman.
tyrust 8y ago
>The lengthy court filings by prosecutors in Brooklyn paint an ugly picture for Goldman, which was instrumental in raising money for the fund, 1Malaysia Development Berhad, or 1MDB. Given the fund's affinity for Hollywood, I wonder if that abbreviation is meant to evoke "IMDB".
- Geimfari 8y ago
  That is not the case, since 1MDB wasn't supposed to fund anything in Hollywood. It was sold to the public as a unified state fund similar to the Norwegian oil fund. The funds from 1MDB were fraudulently directed to another bank account that was then used to fund all kinds of things, especially extravagant parties and a Hollywood film.
olivermarks 8y ago
Looking forward to reading Matt Taibbi's write up of this latest vampire squid 'entanglement'...
munk-a 8y ago
I really dislike the title for this article. The way the NYTimes wrote it it's could be reasonable to assume that GS was just walking along one day and some really terrible fraud scandal jumped out and grabbed hold of it. It is worded to imply GS was related to the scandal but avoids implying they had anything to do with actually causing it. Guilt and liability aren't the job of NYT to resolve but they phrased this very poorly. (FYI, before down votes, I'm not anti-NYT and this isn't meant to be favoring either side of the political divide, it just seems like bad reporting)
- harry8 8y ago
  https://www.nytdealbookconference.com/ https://www.nytdealbookconference.com/ nyt makes money out of these conferences at which Blankfein is a draw card. Does that mean the nyt are a pack of trumps? No. Is it a conflict of interest? I'm going to have to go with yes. Seems like conflicts of interest are only applicable to journalists to keep them poor. Owners have no such restraints on them.
doh 8y ago
There is a fascinating book [0] that recently came out that describes Jho Low in a great detail, including the role of GS and the ex-prime minister of Malaysia. [0] https://www.amazon.com/gp/product/B079WVJZCH/ref=oh_aui_d_detailpage_o00_?ie=UTF8&psc=1 https://www.amazon.com/gp/product/B079WVJZCH/ref=oh_aui_d_de...
- sqs 8y ago
  I also just read the book you linked (Billion Dollar Whale) about the 1MDB scandal. Highly recommended!
  - jdorfman 8y ago
    I will have to second that. The excessive spending made me cringe at times.
rchaud 8y ago
1) Send a staff member from the target country to grease the wheels of the local government officials 2) If that doesn't work, bribe them outright 3) Take a piece of the gargantuan bond issue contract, do whatever it takes to get people to buy those pieces of paper, including cooking the books 4) Collect year-end bonus and absolve yourself of all responsibility after the deal is done. It's the same playbook every time. Greece in 1999, Libya in the post-Gaddafi era, and now Malaysia. Probably many others that I'm not even aware of.
- FabHK 8y ago
  Yes. Reference for the second example: "Hot Mess: How Goldman Sachs Lost $1.2 Billion of Libya’s Money" https://www.bloomberg.com/features/2016-goldman-sachs-libya/ https://www.bloomberg.com/features/2016-goldman-sachs-libya/
enibundo 8y ago
the scam of the scums
ourmandave 8y ago
I found this link that lists all the fines Goldman has paid since 2000, which is $9.6B. https://violationtracker.goodjobsfirst.org/parent/goldman-sachs https://violationtracker.goodjobsfirst.org/parent/goldman-sa... Is that just a Cost of Doing Business to them?
- d--b 8y ago
  Nice website, and they only rank #9. Good job BofA: https://violationtracker.goodjobsfirst.org/top-100-parents https://violationtracker.goodjobsfirst.org/top-100-parents
  - danielvf 8y ago
    So in the middle of the mortgage crisis, Bank of America bought American’s biggest mortgage company, Countrywide, (one on in five home loans in the US). It seemed like a deal to the BOA CEO, since Countrywide’s stock price had fallen to 16% of its high value, the BOA cash reserves would make people trust Countrywide’s financial position again, and the making bad loans had stopped. He figured BOA would then dominate the post-crash lending market, and rushed the deal through. Well turns out that Countrywide was not only in financial trouble, which cost BOA billions on top of the purchase price, but had been deliberately saying loans were better than they were and selling those loans to others. The fine was the biggest fine ever in the history of the United State. After the acquisition, BOA paid a 16.5 billion fine, a 10 billion fine, and a 9 billion fine related to Countrywide. And those are just the big ones. The BOA CEO was fired.
    - lotsofpulp 8y ago
      BoA may have been forced to buy Countrywide: https://www.cbsnews.com/news/did-feds-force-bank-of-america-merger/ https://www.cbsnews.com/news/did-feds-force-bank-of-america-...
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  - gok 8y ago
dsnuh 8y ago
>the Malaysian businessman they believe stole some of the money: Jho Low Would Jho Low be pronounced "YOLO"?
coliveira 8y ago
Given that "Wolf of Wall Street" was written by the Wolf himself, it is not surprising that the trail of corruption goes back to Wall Street again. He was probably in friendly terms with the financiers of this movie.
coliveira 8y ago
"Goldman’s chairman, Lloyd Blankfein, sought to frame the matter as the misdeeds of rogue employees. “These are guys who evaded our safeguards, and lie, stuff like that’s going to happen,” Of course, it is very convenient to get the money of corrupt deals made by top execs, and then later claim they didn't know anything about how they did it. What about returning all that money and putting them in jail, for a change?
jokoon 8y ago
The cynic in me think it's very bad press for capitalism. That kind of news is really gold for populists who are against capitalism. And honestly, how could you really defend capitalism politically? Public opinion does not miss on that kind of thing.
- DontGiveTwoFlux 8y ago
  Well, it’s not like what they were doing was legal and there’s nothing that can be done about it. In fact, America’s aggressive anti-bribery laws seem to be semi-working here with some folks slated to go to jail. I saw semi-working because they didn’t prevent it in the first place. I don’t know if you can sketch a broad condemnation of capitalism based on this case. After all, the opposite party was a government owned fund. What’s interesting to me is how susceptible to bribery government affiliated programs are. I guess it’s a combination of lots of money being handled by people who are not officially compensated very well. These kickback stories never seem to involve big companies bribing other companies. I assume that’s because of stricter controls and less incentives for those on the receiving end of a kickback.
patrickg_zill 8y ago
Reminder that GS also helped the corrupt Greek government hide its debts in order to join the Euro. This is not an aberrant behavior for GS, just business as usual. Many articles were written about this : https://www.independent.co.uk/news/world/europe/greek-debt-crisis-goldman-sachs-could-be-sued-for-helping-country-hide-debts-when-it-joined-euro-10381926.html https://www.independent.co.uk/news/world/europe/greek-debt-c...
ionised 8y ago
It never ends with Goldman Sachs does it? They are a parasite on this earth.
beloch 8y ago
Well, at least they didn't start another famine[1]... this time. Question: How does Goldman Sachs still get away with this stuff? Due to their lengthy rap sheet, multiple governments and every law enforcement agency in the world should be watching their every action. It's a safe bet they're going to do something illegal again... and again... and again. Why aren't they being caught in the act and stopped before they can waltz off with the profits? Why haven't they been shut down or barred from doing business in the jurisdictions they've screwed over? Malaysia is going after Goldman Sachs for reparations, but have they kicked the company out of Malaysia? [1]https://www.independent.co.uk/voices/commentators/johann-hari/johann-hari-how-goldman-gambled-on-starvation-2016088.html https://www.independent.co.uk/voices/commentators/johann-har...
- thefounder 8y ago
  Money buys anything. This works everywhere
  - stevespang 8y ago
    and the Wolf of Wallstreet was absolutely epic, well worth a couple of Goldman Sachs bankers taking the fall
- jimbokun 8y ago
  Their "alumni" run the organizations that are supposed to prosecute them.
- browsercoin 8y ago
  Well, once you realize that essentially, large American Fortune 500 companies are actively supported by its spy agency (hint: They Hate Snowden) through a veil of foreign aid and other friendly name sounding causes such as "volunteers of Amazonian language preservation of America" calling in military assets to put down a rebellion from the foreign country, that get in their way of the lootin of their country. The book 'Confessions of Economic Hitman' perfectly illustrates a sort of "active measures" that take place with increasing lethal consequences for those that oppose them. 1. identify elites in a country (ex. bankers, biz ppl) 2. lucrative contracts and monopoly handed out to elites via government. 3. profit??? 4. If no profit, use bribe to corrupt key players. 5. If still no profit, send in the jackals (what EH calls professional assassins), put poison in cigars, drone strike. 6. If tradecraft fails, then they put boots on the ground. South America is a very good example. It's been thoroughly pillaged by American corporations now for over a century, which has given rise to narco-economy. https://www.youtube.com/watch?v=NKwJI9axblQ https://www.youtube.com/watch?v=NKwJI9axblQ
ciustuc 8y ago
For those that enjoy content in audio form check out the article on BingeWith: http://bingewith.com/#id1180 http://bingewith.com/#id1180
venantius 8y ago
Well of course they were. What exactly made anyone think they'd actually changed anything, other than time and a bit of marketing? What they were doing at the time of the financial crisis was illegal then, and this is illegal now. It turns out when the financial incentive is big enough, people will commit crimes! Especially when they're in an institution that seems to prize making money and "being clever" above following the law.
chaostheory 8y ago
Reminds me of what Goldman Sachs did with Libya. https://www.bloomberg.com/features/2016-goldman-sachs-libya/ https://www.bloomberg.com/features/2016-goldman-sachs-libya/ Not long after Libya's response, you get regime change. I'm sure it was just coincidence
- justboxing 8y ago
  Yes. They even have an "Extraction Team"[1] that rescues their Rainmakers from conflict zones... > #GoldmanSachs had extraction team?"Call in @GS special forces from hotel in Libya" [1] Source: https://twitter.com/KevinRKelly_/status/781898792148742144 https://twitter.com/KevinRKelly_/status/781898792148742144 Related: Goldman's Libya Salesman Was a Little Too Good. Complex derivatives sometimes go wrong for the simplest reasons. => https://www.bloomberg.com/opinion/articles/2016-09-29/goldman-s-libya-salesman-was-a-little-too-good https://www.bloomberg.com/opinion/articles/2016-09-29/goldma...
sampl 8y ago
Funny how we say Goldman "is ensnarled in scandal" rather than "perpetuated a vast fraud". Almost makes it sound as if the real news isn't their reprehensible actions, but the fact that they got caught! (Or even that the government is slowing them down with annoying charges).
- meowface 8y ago
  The question is to what extent this is institutional rather than fraudulent actions of a few individuals. It probably is institutional, of course, but innocent until proven guilty and all that.
- tormeh 8y ago
  Well, what do you expect from Goldman Sachs at this point? If they were, at any point in the last 10 years, probably in the clear that'd be shocking. The only reason the people working there don't feel the need to stand up when they hear Eminem is that they're not slim enough.
onetimemanytime 8y ago
>>“These are guys who evaded our safeguards, and lie, stuff like that’s going to happen,” Mr. Blankfein said Safeguards written in stone, no doubt. In the article it said that they made $600 MILLION in a $6 Billion bond offering. I'm sure those that wrote the safeguards were thinking of them, not of the $600 MILLION profit in one shot.

354 points by SREinSF 8y ago

More background: https://www.bloomberg.com/news/articles/2018-05-24/how-malaysia-s-1mdb-scandal-shook-the-financial-world-quicktake https://www.bloomberg.com/news/articles/2018-05-24/how-malay... How he spent the money: https://thecoverage.my/news/jho-low-threw-wildest-billion-dollar-party-vegas-history-armed-infinite-supply-cash-wildest-party-vegas-ever-saw/ https://thecoverage.my/news/jho-low-threw-wildest-billion-do...

deleted 8y ago
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chollida1 8y ago

I've heard that subsidiaries of the big accounting firms are essentially separate companies and really just share the firms name, I'm not sure if that's true or not but in the case of the main Wall Street firms, its most definitely is not. Goldman is Goldman everywhere which makes this more concerning. Even more troubling are reports that the new GS CEO, David Solomon, reviewed multiple of the 1MDB deals. To be fair its not clear if he personally reviewed them or they were just a meeting note in a senior partners meeting. Going in GS favour is that they fired Leissner, the GS point man, when the allegations originally came out in 2016 and they self reported the incident, though its not clear if they reported it before the original incident was first reported on. I'd imagine since GS is blaming the bankers ability to circumvent internal controls to catch bribes and kick backs, that things are about to get even more bureaucratic over there. Speculation Also watch for any indication of events that can tie this to the Euro zone. I have a feeling regulators in Europe would love to lay a large fine on a US bank, given how many fines European banks have paid in the US recently:) A research note I just saw, estimated this could cost GS more than $1B in fines in the US alone.

archildress 8y ago
Re: the subs of accounting firms, you are absolutely correct. It's not totally unheard of for those firms to switch between affiliate firms as they become unhappy with the relationship. They basically license the brand out, whether they're willing to acknowledge it or not.
tialaramex 8y ago
The Big Four are indeed organised as groups. A headquarters entity (three in London, but KPMG is instead based in the Netherlands) owns the name, and then hundreds of notionally independent companies in other countries around the world use that name under license (for a fee and other conditions). In practice obviously that headquarters organisation has considerable control, and key people merrily teleport from one "independent company" to another over their careers. The appropriate word to describe them is probably "corrupt". If I can have two words, how about "very corrupt" ?
- daviddumenil 8y ago
  A better phrase might be 'multinational partnership'. Big accountancy and legal firms have good historical reasons for those corporate structures.

21 8y ago

There wasn't a year after the global financial crisis which started in 2007 when one or more major banks were not involved in some major scandals, even after all the bailouts and "we'll behave from now on promises": Libor fixing, FX fixing, HSBC money laundering, UBS helping rich clients evade taxes, and so on. I can't think of any other industry where year after year the same 4 or 5 actors are involved in major scandals, yet not one single senior executive goes to jail. As the US general attorney put it, they really are "too big to jail", and they behave accordingly.

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drharby 8y ago
To be clear, this isnt a GS scandal, this is a Malaysian scandal. Goldman just gets more clicks. I mean, bribing gov. Officials is baf, but the bank issued bonds. The fund was plundered by others.
- coliveira 8y ago
  You must be kidding if you think this is just a Malaysian thing. Nobody does scammy business with a major company like GS without them having a cut of the action. If there is one thing that Wall Street execs are not is stupid. And of course the justice system knows it, otherwise they wouldn't bring changes against them.

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asow92 8y ago

"The money was used to buy [...] as well as to pay for the Hollywood blockbuster “The Wolf of Wall Street.”" Gold.

paulpauper 8y ago

diamond necklaces and Birkin bags as well as to pay for the Hollywood blockbuster “The Wolf of Wall Street.” Najib Razak, what an ironic movie choice

sorokod 8y ago
Cynical, not ironic.

murph-almighty 8y ago

>The money was used to buy a Picasso painting, diamond necklaces and Birkin bags as well as to pay for the Hollywood blockbuster “The Wolf of Wall Street.” A scam that funded a movie about scams? True life is stranger than fiction.

Avshalom 8y ago
A movie that spent two hours depicting the luxuries bought by scams and zero minutes depicting the real consequences for those that got scammed. With a quick reminder at the end that you can to this day go pay somebody to teach you how to do it yourself.
- camjohnson26 8y ago
  Boiler Room did a much better job showing both sides of the coin.
  - meddlepal 8y ago
    That movie is rather unappreciated. Definitely worth a watch for folks that haven't seen it.
- rchaud 8y ago
  The screen adaptations of Gordon Gecko, Patrick Bateman and Jordan Belfort's stories make me think that a lot changes between the time production starts on a screenplay and when the cinema reels roll off the assembly lines. Studio execs do test screens and decide to glamorize the debauchery to extreme levels and give it tons of screen time, because "that's what the people want". So at the end of the movie, you no longer merely empathize with the antagonist, but end up idolizing him. Why else do college bros know the "Greed is Good" speech by heart? Or Bateman's opening monologue in his apartment?
  - toyg 8y ago
    It’s always easier to scapegoat “studio execs” whenever a production has ethical problems. In reality, smart folks like Coppola and Stone know how to play to certain audiences while still selling tickets to the less sophisticated. Most of their movies can be read in opposite terms and it’s absolutely on purpose.

curiousgal 8y ago

So this concerns events that happened in Malaysia, why is the Brooklyn prosecutor office involved? Because of "The Wolf of Wall Street"?

tomatotomato37 8y ago
If I'm reading this right it's because the journey the money took while being laundered went through several US financial systems and was orchastrated by the US branch of Goldman Sachs. Or it may just be the fact that some of Jho Lows property being seized is on US soil, and hence is under the juristiciation of US law enforcement; this whole thing is kinda hard to follow.
tialaramex 8y ago
Goldman Sachs in an American bank, headquartered in New York City. The bank is subject to the laws of the US, and of New York. The events "happened in Malaysia" only in some very abstract sense that some key players may have been located in Malaysia at some points. The bank though, concretely, remains an American bank throughout. Nobody is going to tell a court that oh, this was actually a Malaysian thing, it's OK for American banks to be corrupt so long as somehow Malaysia is involved, that's fine...
- jpatokal 8y ago
  Malaysia was way more involved than that. The money in question comes from Malaysian tax payers, and the former prime minister Najib is under arrest because it looks like he channeled $700m of it into his own pockets.
  - coliveira 8y ago
    Yes, but the company in question is GS, which is headquartered in New York.
AndyMcConachie 8y ago
It is a federal felony for an American citizen to bribe a foreign official in the course of doing business. Especially if that business involves a company regulated by the SEC. https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act https://en.wikipedia.org/wiki/Foreign_Corrupt_Practices_Act Put in place after the Lockheed Bribery Scandals in the 1970s. https://en.wikipedia.org/wiki/Lockheed_bribery_scandals https://en.wikipedia.org/wiki/Lockheed_bribery_scandals Which incidentally involved Adnan Kashoggi, the uncle of the recently deceased Jamal Kashoggi.

zaroth 8y ago

I somehow hadn’t heard about this one, but seriously, this is just... I have no words. But the part that has completely blown my mind, ... Jho Lo is a fugitive! Federal law enforcement in this country has become a total laughing stock. High profile arrests/pleas for process crimes and 7-day sentences after multi-million dollar investigations, and then this. Where was Treasury? Where was FinCEN? Where were the Feds? To say nothing of the apparently hundreds of people implicated in receiving stolen property. If you receive gifts worth millions of dollars which was stolen money, I mean are they even trying to claw back any of these millions from the “stars” he lavished? To say nothing of the investors who actually bought the bonds of the now bankrupt fund? “A billion here, a billion there, eventually you’re talking about real money.” This guy is a financial terrorist. If you can’t extradite him, legally designate him an enemy combatant and take him out with a Hellfire.

21 8y ago
> are they even trying to claw back any of these millions from the “stars” he lavished? They did: > Australian supermodel Miranda Kerr has turned over jewelry worth $8.1 million to the U.S. Department of Justice that she received from an ex-boyfriend, Malaysian businessman Low Taek Jho, in 2014. > Leonardo DiCaprio has already turned over a Picasso painting worth $3.2 million that he received as a birthday gift from Low as well as a Jean-Michel Basquiat collage valued at $9 million, both of which were listed in the June court filing. https://eu.usatoday.com/story/life/people/2017/06/27/miranda-kerr-returns-8-million-in-jewels-ex-boyfriend-low-taek-jho-bought-with-malaysian-government-funds/103224860/ https://eu.usatoday.com/story/life/people/2017/06/27/miranda...
- zaroth 8y ago
  Well I guess it’s a start. Now how about the rights and royalties for the movie? IMO, they should be charged as co-conspirators in the fraud.
  - Twirrim 8y ago
    How, exactly, were they to know the gifts were purchased using fraudulent money? At the time they would have received those gifts, Jho Low was believed by most of the world to just be an extremely successful businessman.

tyrust 8y ago

>The lengthy court filings by prosecutors in Brooklyn paint an ugly picture for Goldman, which was instrumental in raising money for the fund, 1Malaysia Development Berhad, or 1MDB. Given the fund's affinity for Hollywood, I wonder if that abbreviation is meant to evoke "IMDB".

Geimfari 8y ago
That is not the case, since 1MDB wasn't supposed to fund anything in Hollywood. It was sold to the public as a unified state fund similar to the Norwegian oil fund. The funds from 1MDB were fraudulently directed to another bank account that was then used to fund all kinds of things, especially extravagant parties and a Hollywood film.

olivermarks 8y ago

Looking forward to reading Matt Taibbi's write up of this latest vampire squid 'entanglement'...

munk-a 8y ago

I really dislike the title for this article. The way the NYTimes wrote it it's could be reasonable to assume that GS was just walking along one day and some really terrible fraud scandal jumped out and grabbed hold of it. It is worded to imply GS was related to the scandal but avoids implying they had anything to do with actually causing it. Guilt and liability aren't the job of NYT to resolve but they phrased this very poorly. (FYI, before down votes, I'm not anti-NYT and this isn't meant to be favoring either side of the political divide, it just seems like bad reporting)

harry8 8y ago
https://www.nytdealbookconference.com/ https://www.nytdealbookconference.com/ nyt makes money out of these conferences at which Blankfein is a draw card. Does that mean the nyt are a pack of trumps? No. Is it a conflict of interest? I'm going to have to go with yes. Seems like conflicts of interest are only applicable to journalists to keep them poor. Owners have no such restraints on them.

doh 8y ago

There is a fascinating book [0] that recently came out that describes Jho Low in a great detail, including the role of GS and the ex-prime minister of Malaysia. [0] https://www.amazon.com/gp/product/B079WVJZCH/ref=oh_aui_d_detailpage_o00_?ie=UTF8&psc=1 https://www.amazon.com/gp/product/B079WVJZCH/ref=oh_aui_d_de...

sqs 8y ago
I also just read the book you linked (Billion Dollar Whale) about the 1MDB scandal. Highly recommended!
- jdorfman 8y ago
  I will have to second that. The excessive spending made me cringe at times.

rchaud 8y ago

1) Send a staff member from the target country to grease the wheels of the local government officials 2) If that doesn't work, bribe them outright 3) Take a piece of the gargantuan bond issue contract, do whatever it takes to get people to buy those pieces of paper, including cooking the books 4) Collect year-end bonus and absolve yourself of all responsibility after the deal is done. It's the same playbook every time. Greece in 1999, Libya in the post-Gaddafi era, and now Malaysia. Probably many others that I'm not even aware of.

FabHK 8y ago
Yes. Reference for the second example: "Hot Mess: How Goldman Sachs Lost $1.2 Billion of Libya’s Money" https://www.bloomberg.com/features/2016-goldman-sachs-libya/ https://www.bloomberg.com/features/2016-goldman-sachs-libya/

enibundo 8y ago

the scam of the scums

ourmandave 8y ago

I found this link that lists all the fines Goldman has paid since 2000, which is $9.6B. https://violationtracker.goodjobsfirst.org/parent/goldman-sachs https://violationtracker.goodjobsfirst.org/parent/goldman-sa... Is that just a Cost of Doing Business to them?

d--b 8y ago
Nice website, and they only rank #9. Good job BofA: https://violationtracker.goodjobsfirst.org/top-100-parents https://violationtracker.goodjobsfirst.org/top-100-parents
- danielvf 8y ago
  So in the middle of the mortgage crisis, Bank of America bought American’s biggest mortgage company, Countrywide, (one on in five home loans in the US). It seemed like a deal to the BOA CEO, since Countrywide’s stock price had fallen to 16% of its high value, the BOA cash reserves would make people trust Countrywide’s financial position again, and the making bad loans had stopped. He figured BOA would then dominate the post-crash lending market, and rushed the deal through. Well turns out that Countrywide was not only in financial trouble, which cost BOA billions on top of the purchase price, but had been deliberately saying loans were better than they were and selling those loans to others. The fine was the biggest fine ever in the history of the United State. After the acquisition, BOA paid a 16.5 billion fine, a 10 billion fine, and a 9 billion fine related to Countrywide. And those are just the big ones. The BOA CEO was fired.
  - lotsofpulp 8y ago
    BoA may have been forced to buy Countrywide: https://www.cbsnews.com/news/did-feds-force-bank-of-america-merger/ https://www.cbsnews.com/news/did-feds-force-bank-of-america-...
  - deleted 8y ago
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- gok 8y ago

dsnuh 8y ago

>the Malaysian businessman they believe stole some of the money: Jho Low Would Jho Low be pronounced "YOLO"?

coliveira 8y ago

Given that "Wolf of Wall Street" was written by the Wolf himself, it is not surprising that the trail of corruption goes back to Wall Street again. He was probably in friendly terms with the financiers of this movie.

coliveira 8y ago

"Goldman’s chairman, Lloyd Blankfein, sought to frame the matter as the misdeeds of rogue employees. “These are guys who evaded our safeguards, and lie, stuff like that’s going to happen,” Of course, it is very convenient to get the money of corrupt deals made by top execs, and then later claim they didn't know anything about how they did it. What about returning all that money and putting them in jail, for a change?

jokoon 8y ago

The cynic in me think it's very bad press for capitalism. That kind of news is really gold for populists who are against capitalism. And honestly, how could you really defend capitalism politically? Public opinion does not miss on that kind of thing.

DontGiveTwoFlux 8y ago
Well, it’s not like what they were doing was legal and there’s nothing that can be done about it. In fact, America’s aggressive anti-bribery laws seem to be semi-working here with some folks slated to go to jail. I saw semi-working because they didn’t prevent it in the first place. I don’t know if you can sketch a broad condemnation of capitalism based on this case. After all, the opposite party was a government owned fund. What’s interesting to me is how susceptible to bribery government affiliated programs are. I guess it’s a combination of lots of money being handled by people who are not officially compensated very well. These kickback stories never seem to involve big companies bribing other companies. I assume that’s because of stricter controls and less incentives for those on the receiving end of a kickback.

patrickg_zill 8y ago

Reminder that GS also helped the corrupt Greek government hide its debts in order to join the Euro. This is not an aberrant behavior for GS, just business as usual. Many articles were written about this : https://www.independent.co.uk/news/world/europe/greek-debt-crisis-goldman-sachs-could-be-sued-for-helping-country-hide-debts-when-it-joined-euro-10381926.html https://www.independent.co.uk/news/world/europe/greek-debt-c...

ionised 8y ago

It never ends with Goldman Sachs does it? They are a parasite on this earth.

beloch 8y ago

Well, at least they didn't start another famine[1]... this time. Question: How does Goldman Sachs still get away with this stuff? Due to their lengthy rap sheet, multiple governments and every law enforcement agency in the world should be watching their every action. It's a safe bet they're going to do something illegal again... and again... and again. Why aren't they being caught in the act and stopped before they can waltz off with the profits? Why haven't they been shut down or barred from doing business in the jurisdictions they've screwed over? Malaysia is going after Goldman Sachs for reparations, but have they kicked the company out of Malaysia? [1]https://www.independent.co.uk/voices/commentators/johann-hari/johann-hari-how-goldman-gambled-on-starvation-2016088.html https://www.independent.co.uk/voices/commentators/johann-har...

thefounder 8y ago
Money buys anything. This works everywhere
- stevespang 8y ago
  and the Wolf of Wallstreet was absolutely epic, well worth a couple of Goldman Sachs bankers taking the fall
jimbokun 8y ago
Their "alumni" run the organizations that are supposed to prosecute them.
browsercoin 8y ago
Well, once you realize that essentially, large American Fortune 500 companies are actively supported by its spy agency (hint: They Hate Snowden) through a veil of foreign aid and other friendly name sounding causes such as "volunteers of Amazonian language preservation of America" calling in military assets to put down a rebellion from the foreign country, that get in their way of the lootin of their country. The book 'Confessions of Economic Hitman' perfectly illustrates a sort of "active measures" that take place with increasing lethal consequences for those that oppose them. 1. identify elites in a country (ex. bankers, biz ppl) 2. lucrative contracts and monopoly handed out to elites via government. 3. profit??? 4. If no profit, use bribe to corrupt key players. 5. If still no profit, send in the jackals (what EH calls professional assassins), put poison in cigars, drone strike. 6. If tradecraft fails, then they put boots on the ground. South America is a very good example. It's been thoroughly pillaged by American corporations now for over a century, which has given rise to narco-economy. https://www.youtube.com/watch?v=NKwJI9axblQ https://www.youtube.com/watch?v=NKwJI9axblQ

ciustuc 8y ago

For those that enjoy content in audio form check out the article on BingeWith: http://bingewith.com/#id1180 http://bingewith.com/#id1180

venantius 8y ago

Well of course they were. What exactly made anyone think they'd actually changed anything, other than time and a bit of marketing? What they were doing at the time of the financial crisis was illegal then, and this is illegal now. It turns out when the financial incentive is big enough, people will commit crimes! Especially when they're in an institution that seems to prize making money and "being clever" above following the law.

chaostheory 8y ago

Reminds me of what Goldman Sachs did with Libya. https://www.bloomberg.com/features/2016-goldman-sachs-libya/ https://www.bloomberg.com/features/2016-goldman-sachs-libya/ Not long after Libya's response, you get regime change. I'm sure it was just coincidence

justboxing 8y ago
Yes. They even have an "Extraction Team"[1] that rescues their Rainmakers from conflict zones... > #GoldmanSachs had extraction team?"Call in @GS special forces from hotel in Libya" [1] Source: https://twitter.com/KevinRKelly_/status/781898792148742144 https://twitter.com/KevinRKelly_/status/781898792148742144 Related: Goldman's Libya Salesman Was a Little Too Good. Complex derivatives sometimes go wrong for the simplest reasons. => https://www.bloomberg.com/opinion/articles/2016-09-29/goldman-s-libya-salesman-was-a-little-too-good https://www.bloomberg.com/opinion/articles/2016-09-29/goldma...

sampl 8y ago

Funny how we say Goldman "is ensnarled in scandal" rather than "perpetuated a vast fraud". Almost makes it sound as if the real news isn't their reprehensible actions, but the fact that they got caught! (Or even that the government is slowing them down with annoying charges).

meowface 8y ago
The question is to what extent this is institutional rather than fraudulent actions of a few individuals. It probably is institutional, of course, but innocent until proven guilty and all that.
tormeh 8y ago
Well, what do you expect from Goldman Sachs at this point? If they were, at any point in the last 10 years, probably in the clear that'd be shocking. The only reason the people working there don't feel the need to stand up when they hear Eminem is that they're not slim enough.

onetimemanytime 8y ago

>>“These are guys who evaded our safeguards, and lie, stuff like that’s going to happen,” Mr. Blankfein said Safeguards written in stone, no doubt. In the article it said that they made $600 MILLION in a $6 Billion bond offering. I'm sure those that wrote the safeguards were thinking of them, not of the $600 MILLION profit in one shot.