The $2.9 billion deferred prosecution agreement Goldman Sachs signed on October 22, 2020, does not close the 1MDB scandal. It reshuffles the deck. The bank gets to avoid a criminal conviction.
But the money — the largest penalty of its kind for a U.S. bank — has to go somewhere. Victims, governments, and investigators are still sorting out who gets what and what comes next.
The deal covers only Goldman Sachs. The bank’s own statement has been consistent: it says it was unaware of the corruption. Regulators found otherwise.
They concluded the bank failed to monitor transactions and failed to flag suspicious activity. That finding sticks.
It means the bank’s compliance systems — or lack of them — are now a matter of public record. Other banks are watching. Jho Low remains the central figure.
The alleged mastermind moved 1MDB money through shell companies and offshore accounts. He is still at large. The U.S. Department of Justice has been chasing assets for years — yachts, real estate, a Picasso painting.
That work continues. The Goldman settlement does not touch Low.
He is not part of the agreement. Malaysia’s former Prime Minister Najib Razak is in a different position. He was convicted in 2020 on charges related to the scandal.
The evidence showed over RM 2.67 billion — about US$700 million — flowed into his personal accounts from 1MDB, a government-run strategic development company. That was revealed in a 2015 document leak.
Najib is appealing. The Goldman deal does not affect his case directly, but it reinforces the narrative prosecutors have built: the money moved through major international banks, and those banks had a duty to stop it. The $2.9 billion figure itself is worth pausing on.
It is not a fine. It is a deferred prosecution agreement. That means Goldman Sachs pays the money, admits to certain facts, and avoids trial.
If the bank complies with the terms for a set period, the charges go away. Critics argue this lets the bank buy its way out.
Supporters say it recovers money for Malaysia. The truth is somewhere in between. The money will be split between the U.S. government, Malaysia, and possibly other jurisdictions.
But the process is slow. Malaysia has been trying to recover 1MDB funds for years.
Some assets have been returned. Not all. The scandal began in 2009.
The DOJ called it the largest kleptocracy case to date in 2016. That label stuck. It has touched Hollywood — the movie “The Wolf of Wall Street” was partly financed with stolen money.
It touched banks in Switzerland, Singapore, and the United States. It touched politicians in multiple countries.
The Goldman settlement is one chapter, not the last. What to watch next. The DOJ is still pursuing asset forfeiture cases.
Other individuals may face charges. The bank’s own employees — some have already been charged.
The deferred prosecution agreement typically includes cooperation requirements. That could mean Goldman Sachs is now helping prosecutors build cases against former employees or partners. That is standard in these deals.
It is also uncomfortable for the bank. The 1MDB scandal is not over. It is entering a new phase.
The money is being counted. The legal cases are grinding through courts.
The reputations are already ruined. Goldman Sachs paid $2.9 billion to keep operating. The question now is whether the system that allowed the scheme to happen — banks that do not ask questions, shell companies that hide owners, offshore accounts that shield flows — has learned anything.
The deferred prosecution agreement suggests the government thinks a fine is enough. Others disagree.
