Goldman Sachs is in talks with the US government to pay a multibillion-dollar fine, admit guilt and agree to continuing oversight of its compliance procedures in order to resolve a criminal investigation into its role in a Malaysian corruption scandal.

Goldman and the Justice Department have largely agreed on a fine of just under $2bn to settle allegations that the Wall Street firm ignored red flags while billions of dollars were looted from its client, a Malaysian government fund known as 1MDB, people familiar with the matter said.