MALAYSIA has secured a judgment for the recovery of more than US$240 million (RM1.17 billion) in assets after the conviction of two key figures in the 1MDB international financial scandal.
The Swiss Federal Criminal Court delivered the ruling yesterday, convicting the two men of multiple crimes.
Swiss-British businessman Patrick Mahony and Saudi-Swiss businessman Tarek Obaid were found guilty of fraud, money laundering, and aggravated misuse of funds in Switzerland’s highest criminal court in Bellinzona.
The indictment showed the two executives had defrauded the Malaysian wealth fund of US$1.8 billion, with Obaid receiving at least US$805 million and Mahony, at least US$37 million.
The court sentenced Obaid to seven years in prison and Mahony to six years.
The court also ordered the confiscation of their assets, including real estate in Switzerland and the UK, and funds held in numerous bank accounts, totalling more than US$240 million, to be returned to 1MDB.
The 1MDB board welcomed the court ruling.
“We welcome the 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, and we commend the Swiss authorities for their work securing these convictions," a 1MDB spokesman said in a statement.
“Throughout this process, we have worked to support the Swiss federal prosecutors as attached parties to the prosecution, to ensure the recovery of assets to Malaysia.
“This included filing criminal complaints on behalf of 1MDB, supporting the investigation, appearing at the trial, providing statements and cross-examination, and ultimately ensuring the frozen assets will be returned to Malaysia.
“We thank the Swiss authorities for their thorough investigation, which has secured this conviction."
1MDB said the asset recovery was achieved as part of a multi-disciplinary strategy to support and supplement ongoing criminal forfeiture efforts.
“We continue to bring enforcement actions against the parties involved in the fraudulent misappropriation of Malaysian state funds around the world.
“Today’s judgment is a further step towards recovering the harm done to the people of Malaysia. We will continue to pursue those responsible for the looting of 1MDB and recover our nation’s rightful assets, wherever they may be.”
Swiss prosecutors alleged Mahony and Obaid had set up a joint venture with 1MDB by falsely claiming that their company, PetroSaudi, was backed by the Saudi government.
The accused convinced 1MDB’s board to sign up for the scheme in 2009 before defrauding the fund, prosecutors said.
Prosecutors said the fraudulent scheme was orchestrated with fugitive Malaysian financier Jho Low, an adviser to former prime minister Datuk Seri Najib Razak, who has been jailed for his role in the multi-billion dollar scandal.
The accused initially extracted US$1 billion from 1MDB to buy a stake in their venture, then took a further US$830 million from the fund between 2010 and 2011 as part of an Islamic loan that followed their tie-up, prosecutors said.
Mahony and Obaid now face further civil and criminal prosecution in Malaysia over charges of embezzlement and dishonest assistance, relating to the creation of the fraudulent joint venture between 1MDB and PetroSaudi International in 2009. – August 29, 2024.
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