PetroSaudi executives get jail over $2.35 billion 1MDB scandal
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In the 1MDB case, Swiss-Saudi Tarek Obaid was sentenced to seven years in prison, while Swiss-British national Patrick Mahony got a sentence of six years.
PHOTO: REUTERS
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BELLINZONA, Switzerland – The Swiss Federal Criminal Court on Aug 28 convicted two executives at an oil exploration company accused of embezzling over US$1.8 billion (S$2.35 billion) from Malaysia’s state investment fund 1MDB.
The verdict was the latest episode in the 1Malaysia Development Berhad (1MDB) scandal, a complex tale of international corruption that has buffeted a slew of financial institutions and individuals across the globe since allegations of wrongdoing first surfaced in 2015.
Prosecutors alleged that Swiss-British national Patrick Mahony and Swiss-Saudi Tarek Obaid helped to set up a joint venture with 1MDB by creating the impression that their company, PetroSaudi, was backed by the Saudi government.
This was not, in fact, the case, but the accused managed to persuade 1MDB’s board into signing up to the scheme in 2009 before going on to defraud the fund, prosecutors said.
According to the indictment, the two executives defrauded the wealth fund of US$1.8 billion to enrich themselves, with Obaid getting at least US$805 million and Mahony at least $37 million.
Obaid was sentenced to seven years in prison by the court, while Mahony received a sentence of six years.
Prosecutors said the two men created the fraudulent scheme with fugitive Malaysian financier Jho Low, an adviser to former Malaysian prime minister Najib Razak, who is already in prison over his role in the multi-billion dollar scandal.
Initially extracting US$1 billion from 1MDB so it could buy a stake in their venture, the accused took a further US$830 million from the fund between 2010 and 2011 as part of an Islamic loan that followed on from their tie-up, prosecutors said.
The board of 1MDB has welcomed the Swiss conviction of the two executives for defrauding the fund, it said in a statement on Aug 28.
“We welcome today’s verdict in Switzerland’s Federal Criminal Court, which means that Patrick Mahony and Tarek Obaid will face justice for their role in embezzling and defrauding the people of Malaysia,” a 1MDB spokesperson said.
Malaysian and US investigators estimate a total of US$4.5 billion was siphoned away from 1MDB following its inception in 2009, implicating figures ranging from Najib, Goldman Sachs staff and high-level officials elsewhere. REUTERS
