Swiss court jails 1MDB fraudsters over US$1.8 billion theft from Malaysia state fund

Tarek Obaid and Patrick Mahony were found guilty of fraud, criminal mismanagement and aggravated money laundering linked to the 1MDB scandal

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Patrick Mahony (left) and Tarek Obaid (right) arrive at the Swiss Federal Criminal Court in Bellinzona last week. Photo: AFP

Published: 10:05am, 2 Sep 2024

A pair of 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.

The multi-year prison sentences were justified, the court said in a statement released later, given “the very high amounts involved, the intensity of the criminal activity,” and the defendants’ “selfish motive”. The court also ordered the men to compensate 1MDB for the funds that were diverted, return part of the assets under seizure, and to have some of their assets confiscated.

The court said after the ruling that it had rejected the prosecutors’ request for the pair to be immediately detained, saying there wasn’t enough concrete evidence to determine they were a flight risk.

Both men can appeal the verdicts and the sentences before they come into force. Myriam Fehr-Alaoui, Obaid’s lawyer, said that they would appeal. “Many essential elements presented by the defence were not taken into consideration and we deplore that,” she said.

Jho Low. Prosecutors alleged Obaid and Mahony worked with Low to hoodwink 1MDB executives. (Photo: Invision for the United Nations Foundation/AP

The verdict is “shocking” and Mahony will also appeal, his lawyer Laurent Baeriswyl said. The court refused to hear all the witnesses for the defence without providing justification, and rendered a decision that “took no account” of evidence that exonerates him, according to Baeriswyl.