Geneva pair convicted by Swiss court over US$1.8 billion 1MDB fraud
Tarek Obaid received seven years in prison and his colleague Patrick Mahony got six years
TWO Geneva businessmen were found guilty of fraud by a Swiss court for their roles in a US$1.8 billion scam to defraud Malaysia’s 1MDB economic development fund.
Tarek Obaid was sentenced to seven years in prison and his colleague Patrick Mahony six years, after they were also convicted on charges of criminal mismanagement and aggravated money laundering, a spokeswoman for the Switzerland’s Federal Criminal Court said on Wednesday (Aug 28).
The decision is a win for Swiss prosecutors, who secured a criminal conviction against Credit Suisse in 2022, and want to demonstrate that Switzerland is not a soft touch on white-collar crime. Jho Low, the alleged mastermind behind the broader US$4.5 billion defrauding of 1MDB, remains at large. Two Goldman Sachs Group bankers were embroiled in the scandal, and the bank paid US$2.5 billion as part of a 2020 settlement with the Malaysian government over its role.
Mahony and Obaid, classmates from a Geneva private school, were accused of creating a sham oil exploration company as early as 2009 through which they stole more than US$1.8 billion in 1MDB funds. Working with Low, they managed to hoodwink 1MDB executives into believing that their company Petrosaudi had a mandate to negotiate on behalf of a Saudi king which they never had, while claiming the rights to a Caspian Sea oil field that they never controlled, prosecutors alleged.
A lawyer for Mahony said before the trial that the indictment was based on a “totally biased and incomplete investigation,” while Obaid’s lawyers didn’t return emails seeking comment. Both men are entitled to appeal the verdicts and the sentences against them before they become definitive. BLOOMBERG
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