Goldman Sachs Group Inc. will pay the U.S. government about $2.8 billion and admit wrongdoing in a Malaysian bribery scandal, settling charges stemming from its work with a corrupt government investment fund.
A Goldman subsidiary tied to the misconduct in Asia is expected to plead guilty this week, according to people familiar with the matter. The bank’s parent company will admit fault but won’t face prosecution under the agreement, the people said, avoiding a guilty plea that could have crippled its ability to do business.
The arrangement, known as a deferred prosecution agreement, would allow the U.S. Justice Department to pursue charges later if Goldman errs again during a specified time period.
The settlement caps a yearslong scandal that stretched from Southeast Asia to Hollywood, the Middle East, Las Vegas and London. In July, Goldman agreed to pay Malaysia $2.5 billion for its role in the alleged theft of billions of dollars from the investment fund, known as 1MDB.
The deal with the Justice Department calls for Goldman to pay a penalty of about $2.2 billion plus about $600 million in ill-gotten gains, although the firm will be able to offset some of that with fines paid to other authorities and agencies, the people said.