1Malaysia Development Bhd scandal

The 1MDB scandal is one of the world's biggest corruption scandals in recent times, spanning many countries with the US justice department estimating more than RM19 billion (US$4.5 billion) was stolen from the state investment arm.

Besides ongoing criminal and civil proveedings in Malaysia, a number of lawsuits are running in various jurisdictions due to the international level of corruption undertaken by individuals linked to 1MDB and companies which defrauded 1MDB.

The crime

Swiss prosecutors alleged that PetroSaudi executives Patrick Mahony and Tarek Obaid, who are also Swiss nationals, helped to set up a joint venture with 1MDB by deceiving the members of the 1MDB board of directors into believing that their company, Petrosaudi, had links with the Saudi Arabian government.

Once the joint venture was set up, the two executives, through various schemes defrauded the wealth fund of US$1.8 billion to enrich themselves.

Mahony and Obaid created the fraudulent scheme with fugitive Jho Low.

Obaid received at least US$805 million and Mahony at least US$37 million of the proceeds.

The two, between September 2009 and at least July 2015, arranged for bank accounts to be opened in Switzerland to launder millions.

Mahony and Obaid then used the money to buy real estate in Switzerland and London, jewellery and private equity, as well as develop the PetroSaudi business to live "a lavish lifestyle", prosecutors said.

The conviction

The Swiss Federal Criminal Court convicted Mohany and Obaid of fraud, criminal mismanagement and money laundering.

Obaid was sentenced to seven years in prison, while Mahony received a sentence of six years.

They were both ordered to pay back more than US$1.75 billion to 1MDB.

https://www.nst.com.my/business/corporate/2024/08/1098215/why-did-swiss-court-convict-two-petrosaudi-execs-1mdb-fraud