Executives Convicted in $1.8B 1MDB Fraud Scandal

Two executives of an oil exploration company were convicted of fraud in Switzerland for embezzling $1.8 billion from Malaysia's state investment fund 1MDB. The scam involved creating a joint venture under false pretenses, defrauding the fund, and laundering money internationally. Sentences were handed down to both defendants.

Two executives at an oil exploration company have been convicted of fraud by the Swiss Federal Criminal Court, having embezzled over $1.8 billion from Malaysia's state investment fund, 1MDB. This verdict marks a significant development in the 1MDB scandal, a global corruption saga involving numerous financial institutions and individuals since 2015.

Prosecutors revealed that Patrick Mahony, a Swiss-British national, and Swiss-Saudi national Tarek Obaid, deceived 1MDB by setting up a joint venture and misleading its board into believing their company, PetroSaudi, had Saudi government backing. The fraud resulted in Mahony receiving $37 million and Obaid accumulating $805 million. Sentences of six and seven years were respectively handed down.

The scheme, allegedly orchestrated with the help of fugitive Malaysian financier Jho Low, saw the duo initially siphon $1 billion from 1MDB. An additional $830 million followed through an Islamic loan. Funds were laundered via Swiss bank accounts and used for real estate, jewelry, private equity, and lavish lifestyles. Lawyers for the defendants were unavailable for comment.

(With inputs from agencies.)