(Dec 19): Leading US bank Goldman Sachs Group Inc has been reported to be in talks with the US Department of Justice (DOJ) to pay a US$2 billion fine, admit guilt and agree to continuing oversight of its compliance procedures to resolve a criminal investigation into its role in the 1Malaysia Development Bhd (1MDB) corruption scandal.

The Wall Street Journal today reported that Goldman and the DOJ have largely agreed on a fine of just under US$2 billion to settle allegations that the Wall Street firm ignored red flags while billions of dollars were looted from 1MDB.

In the deal, a Goldman subsidiary in Asia and not the parent company would plead guilty to violating US bribery laws, WSJ reported.

The settlement would not affect an investigation by Malaysian authorities, who are seeking billions of dollars from Goldman.

“Resolution discussions are ongoing, and it is irresponsible to speculate on an outcome,” a Goldman spokeswoman said.

Last week, Goldman President John Waldron told CNBC: “We don’t control the outcome, obviously. We’re one party. We have a number of people to talk to...we’re working as hard as we can to try to get it resolved sensibly.”

Goldman had raised US$6.5 billion for 1MDB, much of which US authorities say was stolen by Jho Low, and two Goldman bankers. Prosecutors say the bank ignored warning signs about Low and the fund in pursuit of fees that eventually reached about US$600 million.

One of the bankers, Tim Leissner, pleaded guilty to stealing more than US$200 million from 1MDB and this week agreed to a lifetime ban from the securities industry. Leissner is cooperating with investigators, The Wall Street Journal has previously reported, and is scheduled to be sentenced next year.

The other banker, a Malaysian national named Roger Ng, has pleaded not guilty in a New York court and also faces charges in Malaysia, WSJ reported.

Low agreed in October to forfeit more than US$700 million in assets to US authorities but hasn’t admitted to wrongdoing and remains a fugitive.

Goldman has said that Leissner and Ng, who are no longer with the bank, were rogue actors who intentionally misled their bosses and siphoned money through personal accounts out of view of the bank.

A third executive, previously reported by WSJ to be Hong Kong-based banker Andrea Vella, is alleged by US authorities to have known about the scheme. He hasn’t been charged and remains on administrative leave from Goldman.