DOJ Settles Turf Battle, Goes After Goldman Sachs

An investigation into the disappearance of about $4 billion from a huge Malaysian government investment fund, 1Malaysia Development Berhad, is in the hands of Brooklyn-based prosecutors, after deputy AG Rod Rosenstein sided with them in a dispute with Los Angeles prosecutors. A criminal complaint had been drafted earlier this year in Los Angeles, citing a Goldman Sachs banker for his alleged role in the fraud, but the charges were never filed. The Brooklyn office is investigating a much bigger target, Goldman Sachs itself. They said filing charges against the banker would undercut their investigation by casting the firm as a victim, and Rosenstein agreed. Prosecutors in the U.S. and elsewhere believe that a group of people with close ties to the former Malaysian prime minister Najib Razak stole from the fund to buy paintings, yachts, real estate and even investment stakes in the film “The Wolf of Wall Street.” Goldman provided services to the fund, including helping it sell billions of dollars in bonds to investors, and earned about $600 million in fees. The investigation concerns whether Goldman played a role in the fraud, or should have done more to uncover the misappropriation of funds.