Closeup of mallet being hit on stacked coins at table in courtroom

Two former Goldman Sachs bankers have been permanently banned by U.S. banking regulators for their alleged roles in a scandal that saw billions diverted from a Malaysian state-owned investment fund.

The U.S. Federal Reserve Board has banned Tim Leissner and Ng Chong Hwa (a.k.a. Roger Ng) — both former senior investment bankers with Goldman Sachs Group Inc. — from the U.S. banking industry, citing “their participation in a scheme to illegally divert billions of dollars from a Malaysian sovereign wealth fund.”

According to the Fed, the pair arranged bond offerings by the fund 1Malaysia Development Berhad (1MDB) in 2012 and 2013, which were then allegedly embezzled from the fund and used to bribe foreign government officials, among other things.

According to the Fed’s order, Leissner participated in the scheme to divert proceeds from several 1MDB transactions, including the bond offerings underwritten by Goldman Sachs.

Last August, Leissner pleaded guilty to criminal charges in the case for conspiring to violate the Foreign Corrupt Practices Act (FCPA) and conspiracy to commit money laundering. He was also fined US$1.42 million by the Fed and consented to the permanent ban.

Ng, who faces similar criminal charges, has been arrested in Malaysia and is facing extradition. The allegations against him have not been proven.