Swiss court convicts 2 top PetroSaudi executives in fallout from 1MDB Malaysian fund scandal
GENEVA (AP) — Switzerland’s federal criminal court on Wednesday convicted two top managers of a Saudi oil company on charges including fraud and money laundering in a vast scam that swiped at least $1.8 billion from a Malaysian state-owned investment fund.
PetroSaudi executive Tarek Obaid, a Saudi-Swiss dual national, received a seven-year sentence and British-Swiss associate Patrick Mahony was handed a six-year sentence from the Federal Criminal Court in southern Bellinzona, officials said.
Swiss prosecutors had requested a 10-year prison sentence for Obaid and nine years for Mahony. The court also ordered them to pay $2 billion, plus interest, to the 1 Malaysia Development Berhad, or 1MDB, sovereign wealth fund, and other fees, officials said.
Over a six-year span starting in 2009, the executives and an adviser to Malaysia’s then-Prime Minister Najib Razak hatched a joint venture with 1MDB built in part around false claims that PetroSaudi had access to oil fields in Argentina and Turkmenistan — leading the fund to pour money into the project.
During the trial, prosecutor Alice de Chambrier denounced “the fraud of the century” and said the executives were “calculating and arrogant manipulators, with no scruples, and obscenely greedy,” Swiss newspaper Le Temps quoted her as saying during the proceedings in April.
Defense lawyers denied the charges and had sought acquittals. It was not immediately clear whether either side planned to appeal.
Matteo Cremaschi, a spokesman for the Swiss attorney general’s office, hailed “an important result in a highly complex criminal procedure with international ramifications.” He said the investigation required poring over hundreds of thousands of documents and in-depth analyses of financial transfers.
“Today’s judgment shows that economic crimes are prosecuted regardless of their complexity and sophistication,” he said in an email.
The 1MDB scandal and cover-up attempts upended the Malaysian government at the time. Najib suffered a stunning defeat in 2018 elections and began serving a jail term in 2022 for graft. He allegedly reaped over $700 million.
The scandal also sent ripples through Hollywood, where some of the stolen money financed lavish parties, a superyacht, premium real estate and even the 2013 film “The Wolf of Wall Street.” Obaid used some of the money to donate $7 million to the Mayo Clinic in Minnesota in honor of his parents, Swiss prosecutors said.
Obaid was accused of having “enriched himself” directly or indirectly through the Saudi oil company to the tune of at least $800 million, prosecutors said. Mahony was said to have received at least $37 million.
Malaysian financier Low Taek Jho, who Swiss prosecutors said had “privileged contacts” with Najib and cooked up the plot with Obaid, remains an international fugitive.
Malaysian investigators allege that over $4.5 billion was stolen from the fund.
The joint-venture called for 1MDB to pour in $1 billion and for PetroSaudi to contribute assets consisting of oil fields in Turkmenistan and Argentina valued at $2.7 billion, even though the oil company didn’t actually own those assets, court papers showed.