Two PetroSaudi executives have been sentenced to prison by a top Swiss court for their roles in a massive $1.8 billion embezzlement from Malaysia’s 1MDB sovereign wealth fund.
Tarek Obaid, 48, the Swiss-Saudi CEO of PetroSaudi, received a seven-year prison term from Switzerland’s Federal Criminal Court. Patrick Mahony, 47, a Swiss-British director at PetroSaudi, was sentenced to six years by the court in Bellinzona.
The court’s verdict, which can be appealed, found the men guilty of their involvement in a large-scale fraud orchestrated by Jho Low, an advisor to former Malaysian Prime Minister Najib Razak, who was complicit in the scheme. Prosecutor Alice de Chambrier described the fraud as the “scam of the century,” labeling the defendants as “calculative, manipulative, and obscenely greedy.”
The case, heard by a three-judge panel in April, revealed that Obaid and Mahony conspired with individuals connected to 1MDB to orchestrate a fraudulent joint venture with PetroSaudi. They subsequently converted this venture into an Islamic loan and facilitated the diversion of additional funds totaling $830 million, which were then laundered.
The court highlighted that Obaid committed 370 acts of money laundering involving over $7 billion, while Mahony engaged in 220 acts amounting to more than $5 billion. Both were convicted of fraud, aggravated money laundering, and complicity in aggravated criminal mismanagement.
The sentences considered the significant sums involved, the intensity of their criminal activity, and their self-serving motives, though the time elapsed since the offenses was a mitigating factor. The court also ordered the return of the embezzled funds and certain assets back to 1MDB.
During the trial, it was revealed that the defendants used the stolen money to purchase luxury items, including precious stones, private jets, and properties in London and Geneva.
The 1MDB scandal, which has prompted global investigations in the U.S., Switzerland, and Singapore, led to the fall of Najib’s government in 2018. Najib was sentenced to 12 years in prison in Malaysia in 2022 for related offenses, with his sentence later reduced to six years.
The 1MDB board welcomed the Swiss convictions and the ordered restitution, pledging to continue pursuing those responsible for the fraud and recovering stolen assets.
