Singapore to Ban Former Goldman Banker in Connection With 1MDB Scandal

SINGAPORE—Singapore authorities announced sanctions on Goldman Sachs Group's former top executive in Southeast Asia on Friday after the banker allegedly wrote an unauthorized reference letter for a Malaysian who U.S. authorities believe is at the center of one of the world's largest-ever financial scandals.

Goldman put the banker, Tim Leissner, its former chairman of Southeast Asia, on leave at the start of this year after it discovered he had written the reference letter on behalf of Jho Low, the young Malaysian financier who U.S. authorities have named as a key figure in the scandal revolving around Malaysian state investment fund 1MDB.

The Monetary Authority of Singapore, in a statement, said it had decided to ban Mr. Leissner from working in the city state's financial markets for 10 years. It said the former Goldman banker had written the letter to a Luxembourg financial institution claiming that Goldman had done due diligence on Mr. Low and had not found any concerns of money laundering. "These statements were untrue and were made by Mr. Leissner without Goldman Sachs' knowledge or consent," the statement said.

The U.S. Department of Justice in a lawsuit earlier this year alleged that more than $3 billion had been siphoned out of the fund, 1Malaysia Development Bhd., and gone into real estate, Hollywood movies and other assets. The suit said Mr. Low had benefited from some of the stolen money.

The MAS also said it had levied million-dollar fines on the local branches of Standard Chartered Ltd. and private bank Coutts & Co Ltd. for their handling of accounts related to the 1MDB scandal. It fined Standard Chartered S$5.2 million ($3.6 million), and imposed a fine of S$2.4 million on Coutts.

Attempts to reach Mr. Leissner, who is living in Los Angeles, were not immediately successful. He has denied wrongdoing. Goldman Sachs said in a statement Friday that the MAS action against Mr. Leissner was related to a matter discovered in January 2016 that it reported to Singapore authorities. The bank added that it is cooperating with authorities. Attempts to reach Mr. Low, whose whereabouts is unknown, were unsuccessful.

Standard Chartered said in a statement it regrets that 1MDB-related transactions passed through the bank. It said it had reported the suspicious transactions, cooperated with authorities and had taken action to strengthen its controls.

A spokesperson for Coutts could not immediately be reached for comment.

Write to Jake Maxwell Watts at [e-mail] and P.R. Venkat at [e-mail]

(END) Dow Jones Newswires

December 01, 2016 22:15 ET (03:15 GMT)

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