Seventeen current and former directors at subsidiaries of Goldman Sachs Group Inc are facing criminal charges in Malaysia.

The charges relate to the country’s state fund 1MDB (1Malaysia Development Berhad), which is the subject of corruption and money laundering investigations in at least six countries.

Prosecutors in Malaysia and the US are looking at Goldman Sachs for its role in raising billions of dollars through a bond offering for the fund.

Former Malaysian leader Najib Razak created the fund in 2009, with the stated aim of helping Malaysia’s economic development.

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But prosecutors say the bond sales provided a means for Razak’s associates to steal money from the fund.

Malaysia’s attorney general Tommy Thomas said: “Custodial sentences and criminal fines will be sought against the accused… given the severity of the scheme to defraud and fraudulent misappropriation of billions in bond proceeds.”

The charges have been brought under the Malaysian Capital Markets and Services Act.

Those charged are Richard Gnodde, chief executive of Goldman Sachs International and Michael Sherwood, former vice chairman of Goldman Sachs Group Inc and co-chief executive officer of Goldman Sachs international.

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There has been no comment from Goldman Sachs, although the bank has previously denied any wrongdoing, saying it was lied to about how the proceeds of transactions would be used.

The US Department of Justice has alleged in lawsuits that more than $4.5bn from 1MDB was laundered through a complex web of transactions and shell companies between 2009 and 2014.

They say $681m of this ended in Razak’s bank account but he says that this money was donations from Saudi Arabia, most of which he returned.

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Razak, ousted in last year’s election, is facing dozens of charges relating to 1MDB to which he has pleaded not guilty.

According to the US Justice Department, assets purchased using 1MDB money include a Picasso painting, luxury real estate in southern California and New York, shares in a Hollywood production company and a $265m yacht, and more than $200m worth of jewellery – including a 22-carat pink diamond pendant and necklace.

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