Goldman seeks over US$20 million from ex-star banker after 1MDB fraud

[NEW YORK] Goldman Sachs Group says its former star banker Tim Leissner collected more than US$20 million in compensation while secretly carrying out one of the largest frauds in history involving 1Malaysia Development Berhad (1MDB) fund. The investment bank wants it back, with interest.

While the Financial Industry Regulatory Authority and a US judge have sided with the bank, Leissner has said he’s broke. The investment bank has taken its push to recover the money from Leissner to Manhattan federal court – and is bringing his wife into the fight too.

Leissner began serving a two-year prison term in February, but his imprisonment has not stopped Goldman from trying to trace assets it said it is entitled to as a creditor.

At a hearing on Wednesday (Apr 22), Goldman’s lawyers pressed to learn more about the finances of Leissner’s wife, former Chanel model Kimora Lee.

Lee has not been accused of any wrongdoing tied to 1MDB. But the bank claims Leissner transferred some money into accounts and shell entities in her name. Goldman has also said the couple entered into a “post nuptial agreement” in 2021 that “renders all assets acquired during their marriage as her separate property.”

‘Dragging on’

A federal magistrate ordered Lee to produce more records tied to Leissner’s investments by May 13, including one entity which Goldman said was worth about US$113 million. US Magistrate Judge Gary Stein said the bank’s information requests had been “dragging on” for months.

“Lee can’t respond to a subpoena by blithely saying, ‘Oh, only the accountants have those documents,’” Stein said at the hearing. “She will have to roll up her sleeves and look in her file cabinets and that’s what I’m expecting. I hope she understands she has to take this seriously.”

Lee’s attorney Nicole Van Dyk told Stein that her client has provided the couple’s joint tax returns as well as the postnuptial agreement and that her accountants would provide documents sought by Goldman.

A lawyer for Leissner, Eugene Meyers, introduced himself at the hearing and then stayed silent. He declined to comment afterwards, as did lawyers for Goldman.

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Largest penalty

Leissner is one of two ex-Goldman bankers convicted in the scandal over the looting more than a decade ago of 1MDB, which also led to the bank paying what was then the largest penalty of its kind in US history, more than US$2.9 billion, as part of a total of more than US$5 billion globally, for its role in the scheme.

Separately, Goldman said on Wednesday it has reached an agreement in principle, without disclosing specifics, to settle a shareholder class action claiming the bank and former top executives misled them about 1MDB.

The bank argues that Leissner admitted when he testified at the 2022 criminal trial of a former subordinate that he pocketed US$140 million for himself while helping syphon off billions of US dollars from 1MDB for co-conspirators during the fraud.

“Leissner has structured his entire life around stealing and hiding assets and avoiding them being recoverable,” Nicole Friedlander, a lawyer for Goldman, told a federal judge at a hearing in February. “He did not produce anything of substance to us, and he claims to have nothing.”

Leissner and his lawyers have told Goldman that he has no money to pay the bank back.

‘Fab lane’

Lee, who starred recently in the reality online streaming TV show Kimora: Back in the Fab Lane, has maintained that she shouldn’t be on the hook to pay anything to Goldman.

Van Dyk has previously argued that Goldman’s requests are “overly broad” and said the bank has been “on a crusade” since one of its units pleaded guilty in the case.

“I don’t know if it’s to avenge itself or it’s embarrassed, because it actually pleaded guilty in connection with these cases,” Van Dyk said at a hearing in the case in February. “Lee, again, had no connection to them,” she said, saying her client’s assets are “completely irrelevant” to tracing any assets tied to Leissner.

The investment bank and Leissner have been at odds for years. When Leissner pleaded guilty in 2018, he blamed his crimes on Goldman, saying it was “very much in line of its culture” to conceal wrongdoing from compliance and legal employees. On the witness stand in 2022, he testified Goldman put pressure on him to generate business.

But at his May 2025 sentencing, Goldman got a chance to fire back. Leissner had never taken responsibility for his crimes, which would have never occurred without him, the bank said in a letter to the court.

US District Judge Margo Brodie, who presided over the 1MDB case, agreed, calling Leissner’s conduct “brazen and audacious.”

As Leissner left court that day, he was handed a subpoena from Goldman. It was part of the bank’s efforts to recoup US$20.7 million awarded by a Finra panel in 2022, which was upheld by a federal judge in Manhattan a year later. With interest, the award has now swelled to about US$25 million.

‘Shell companies’

When Leissner was questioned under oath by Goldman’s lawyers in August as part of the lawsuit to claw back his compensation, he said “probably over US$100 million” of what he took in the 1MDB scheme went into his family accounts, according to a transcript. He also said he “received the proceeds into overseas accounts in the name of shell companies” and later “transferred portions of the proceeds into accounts that Lee and he maintained.”

“These are places where Leissner secreted criminal proceeds,” Friedlander told Stein on Wednesday.

The couple were married in 2014 in California, which has a community property law, according to the investment bank, so any assets acquired during the marriage are his and hers equally.

Divorce petition

Days before he surrendered to federal prison in February, Leissner filed for divorce in Los Angeles, citing “irreconcilable differences,” according to court records.

In his petition, Leissner seeks custody of their 11-year-old son and spousal support. He checked a box in the form indicating that some assets are “separate” from Lee and wrote “TBD” for the date of their separation. A lawyer for Lee in the Goldman compensation case declined to comment and her representatives in the divorce could not be reached.

Leissner is due to be released from prison in September 2027, according to the US Bureau of Prisons. BLOOMBERG