Switzerland's federal criminal court has handed down convictions to two top managers of a Saudi oil company for charges including fraud and money laundering in a massive scam that siphoned off at least $1.8 billion from a Malaysian state-owned investment fund.
The executives, Tarek Obaid and Patrick Mahony, were sentenced to seven and six years, respectively, by the Federal Criminal Court in Bellinzona. They were also ordered to pay $2 billion, plus interest, to the 1 Malaysia Development Berhad (1MDB) sovereign wealth fund.
Prosecutors revealed that over a six-year period starting in 2009, the executives, along with an adviser to Malaysia's former Prime Minister Najib Razak, orchestrated a joint venture with 1MDB based on false claims about PetroSaudi's access to oil fields in Argentina and Turkmenistan, leading to substantial investments from the fund.
The court described the case as 'the fraud of the century,' with the executives being labeled as 'calculating and arrogant manipulators, with no scruples, and obscenely greedy.' Defense lawyers denied the charges and may consider appealing the verdict.
The Swiss attorney general's office praised the outcome as a significant achievement in a complex international criminal investigation. The scandal had far-reaching consequences, contributing to the downfall of the Malaysian government and resulting in the imprisonment of Najib Razak on corruption charges.
The stolen funds were also linked to extravagant spending in Hollywood, including financing parties, a superyacht, premium real estate, and the production of the film 'The Wolf of Wall Street.' Obaid reportedly made a substantial donation to the Mayo Clinic in Minnesota using the illicit funds.
The case highlighted the involvement of Malaysian financier Low Taek Jho, who remains a fugitive and is accused of playing a key role in the fraudulent scheme. Malaysian authorities estimate that over $4.5 billion was misappropriated from the 1MDB fund.
The joint venture between 1MDB and PetroSaudi, which was based on misrepresented assets, underscored the elaborate nature of the fraud that ultimately led to the convictions of the executives involved.
