Any investor who has been following DoJ's criminal investigation of the Vampire Squid over Goldman's alleged facilitation of the massive $4.5 billion fraud at Malaysian sovereign wealth fund 1MDB could probably have guessed that, whatever the outcome of the probe, it wasn't going to end well for the bank.

Those suspicions have now been confirmed.

According to a report published Wednesday by the Financial Times, Goldman Sachs could face the worst of all possible outcomes in the probe, for which it set aside half of a billion dollars in a legal contingency fund during Q4.

To wit:

US justice department staff have recommended that a settlement with Goldman Sachs over its role in the multibillion-dollar 1MDB corruption scandal should include a guilty plea at the parent company level, according to people familiar with the matter.

Any such plea would be the toughest penalty the Department of Justice could bring against Goldman, which has long insisted that any misconduct was due to rogue bankers in its Asian operations.

To be sure, Goldman has paid billions of dollars in fines over its unscrupulous treatment of clients and counterparties alike during the run-up the financial crisis. But so far, the bank has managed to avoid actually copping to a felony (some rival American banking behemoths haven't been so lucky).

But now, it appears that streak of evading lasting criminal stigma might soon be at its end. The DoJ's decision is a sign that prosecutors have rejected Goldman's defense that the 1MDB-related malfeasance was the work of a few bad actors.

Though this is hardly surprising. Goldman's lead banker on the1MDB deals, former Southeast Asia head Tim Leissner, agreed to cooperate with prosecutors in a plea agreement last year where he blasted the bank's 'culture of corruption'. Furthermore, a steady stream of leaks published late last year, just months after longtime CEO Lloyd Blankfein retired, revealed that senior executives - including Blankfein himself - were involved in courting the Malaysian banker-turned-fugitive accused of masterminding the plot.

Goldman's shares, which have lagged their peers largely thanks to the scandal, tumbled on the news.

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Now, will Goldman quietly cop to a plea to get this whole thing over with as quickly as possible, as CEO/fall guy David Solomon has insisted? Or will they choose to fight...and probably lose.