Malaysian prosecutors have filed criminal charges against Goldman Sachs and two of its former executives over their role in a scandal that allegedly saw billions embezzled from a state investment fund.

Attorney general Tommy Thomas is seeking millions of dollars in fines from Goldman, which arranged three bond sales for the 1MDB fund.

The bank collected $600m (£474m) in fees for its services – many times more than industry norms. Malaysia claims Goldman was aware $2.7bn of the money raised would be likely to be stolen. The bank denies wrongdoing.

Former Goldman bankers Roger Ng Chong Hwa and Tim Leissner face prison sentences of up to 10 years if found guilty. The pair are accused of bribing Malaysian officials to secure a role in the bond sales

Authorities from multiple countries allege as much as $4.5bn was misappropriated from the investment fund, which had ostensibly been set up to aid development in Malaysia.

“Having held themselves out as the pre-eminent global adviser/arranger for bonds, the highest standards are expected of Goldman Sachs,” the attorney general said in a statement.

“They have fallen far short of any standard. In consequence, they have to be held accountable.”

The scandal has already resulted in prime minister Najib Razak losing power in an historic election defeat this year.

Mr Najib denies corruption charges and has said more than $700m that passed through his bank account was a political donation from the Saudi royal family.

US legal filings allege money stolen from 1MDB was spent on, among other things, luxury properties, diamond jewellery for Mr Najib’s wife, a yacht and artwork.

It is alleged ‘The Wolf of Wall Street’ was part funded by cash from the 1MDB account (Rex Features)

Some of the funds even financed Hollywood films including The Wolf of Wall Street, prosecutors say.

“We believe these charges are misdirected and we will vigorously defend them and look forward to the opportunity to present our case,” Goldman spokesman Edward Naylor said in a statement. “The firm continues to cooperate with all authorities investigating these matters.”

Prosecutors plan to seek fines “well in excess” of the amount allegedly stolen because of the severity of the violations of Malaysia’s laws, Thomas said.

Mr Leissner, who headed Goldman’s operations in Southeast Asia, pleaded guilty in the US last month to money laundering conspiracy and conspiring to violate bribery laws.

Mr Ng was arrested in Malaysia last month and one of the men at the centre of the scandal, Low Taek Jho, remains at large.

“As has been stated previously, Mr Low will not submit to any jurisdiction where guilt has been predetermined by politics and there is no independent legal process,” a spokesperson for Mr Low said in a statement on Monday.

“It is clear that Mr Low cannot get a fair trial in Malaysia, where the regime has proven numerous times that they have no interest in the rule of law.”