I N 2010 GOLDMAN SACHS created a “business standards” committee to try to repair the reputational damage the financial crisis had done. Clients and transactions were to be screened for ethical shortcomings. Charges of money-laundering and bribery filed by federal prosecutors in a Brooklyn court on November 1st suggest that the investment bank had diagnosed a real problem, if not found the solution.

The allegations relate to work done by Goldman for 1Malaysia Development Berhad (1MDB ), a sovereign-wealth fund set up in 2009, shortly after Najib Razak became Malaysia’s prime minister. Since 2015 investigators in various countries, including America, Singapore, Switzerland and latterly Malaysia itself, have been trying to trace the money it raised and channelled through a maze of financial institutions and shell companies. According to the filing in New York, funds were misappropriated to buy paintings, luxury properties and jewellery (including a necklace costing $27m), and to pay for parties attended by musicians, actors and models, and even a movie, “The Wolf of Wall Street” (fittingly, about financial sleaze).

Goldman’s role was to underwrite three bond offerings together worth $6.5bn, from which it earned $600m. That juicy cut drew accolades from the firm’s senior management, even as those who expressed doubts about why the client was willing to pay so much were overruled. According to the indictment, $2.7bn of the money raised went astray.

According to the filings, Goldman’s former chairman for South-East Asia, Tim Leissner, has pleaded guilty to bribery and money-laundering. He is due to be sentenced in December, though that may be delayed. One of his associates at Goldman, Roger Ng, was indicted on similar charges and arrested on an American warrant in Malaysia shortly before the documents were filed. Also indicted was Jho Low, a Malaysian who allegedly masterminded the plot. Goldman has beefed up its legal team, hiring a former deputy US attorney-general, as it seeks to persuade prosecutors not to bring criminal charges against the firm.

The indictment acknowledges that Goldman’s compliance department had blocked Mr Low from doing direct business with it and that its controls were “knowingly and wilfully” circumvented. But it also says that the firm’s “business culture”, particularly in South-East Asia, was “highly focused on consummating deals, at times prioritising this goal ahead of the proper operation of its compliance functions”.

Some of the diverted money was allegedly used to support Mr Najib’s re-election in 2013. Until this year’s election, which he lost, the Malaysian authorities continued to insist that there was nothing to investigate—even as America’s justice department sought to recover what it regarded as ill-gotten gains. But the new administration, which campaigned against kleptokrasi, is bent on prosecutions. Malaysian regulators are working with American investigators to locate and recover assets.

Mr Najib, who faces more than 30 charges, including of money-laundering and abuse of power, will go on trial next year. In the weeks after he lost power, boxes stuffed with designer handbags, jewellery and cash were recovered from his residences. The publisher of the Edge, a newspaper which gave 1MDB heavy coverage, was arrested under Mr Najib. He has now been knighted. No one in Malaysia will work with Goldman again for a “long, long time”, says a prominent official.