NEW YORK (AFP) – The US Justice Department is calling for Goldman Sachs to plead guilty for its role in the massive corruption scandal involving Malaysian investment fund 1MDB, The Financial Times reported.

That recommendation applies to any settlement between Goldman Sachs and US or state authorities, newspaper reported, citing unnamed sources.

It would be the toughest penalty the Justice Department could impose, as it potentially could affect the financial giant’s licence and ability to conduct business.

According to a source close to the investigation, the hard line recommendations by investigators is not surprising, but the final settlement is likely to be less onerous.

The Justice Department did not immediately respond to a request for comment from AFP. But experts have said Goldman Sachs could face a fine of US$2 billion (S$2.7 billion).

US authorities have accused a Malaysian financial intermediary, Low Taek Jho, former Goldman partner Tim Leissner and former Goldman banker, Ng Chong Hwa, of conspiring to launder billions of dollars from 1 Malaysia Development Berhad, a fund set up to finance development projects.

US officials say more than US$2.7 billion in funds was misappropriated while Goldman garnered US$600 million in fees and revenues from three bond issues in 2012 and 2013.

Leissner pleaded guilty, while Jho Low and Ng Chong Hwa deny the allegations.

Goldman Sachs has tried to distance itself from its two former employees.

Asked about the guilty plea recommendation, a bank spokesman told AFP, “We do not believe that such a charge would be warranted by the facts of the case or the law, particularly because senior management was unware of the criminal activity by Mr Leissner and his associate who took extraordinary efforts to hide their part in the illegal scheme from management, compliance, and legal functions at the firm.”

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