Executives Convicted in $1.8 Billion 1MDB Scandal

Two executives, Patrick Mahony and Tarek Obaid, were convicted by the Swiss Federal Criminal Court for embezzling over $1.8 billion from Malaysia's 1MDB fund. Both were sentenced to prison and ordered to repay the fund more than $1.75 billion. The case is part of a larger international corruption scandal.

In a landmark ruling, the Swiss Federal Criminal Court on Wednesday convicted two executives for their involvement in a massive embezzlement scheme tied to Malaysia's state investment fund 1MDB. Patrick Mahony and Tarek Obaid were found guilty of defrauding the fund of more than $1.8 billion and were ordered to repay over $1.75 billion.

The court highlighted that the extensive monetary recovery included interest paid back during the crime. This verdict is a significant development in the 1MDB scandal, a multifaceted case of international corruption that has affected numerous financial institutions and high-profile individuals since its emergence in 2015.

Prosecutors revealed that Mahony and Obaid misled 1MDB into a joint venture with PetroSaudi by falsely claiming Saudi government backing. The convicted executives funneled the embezzled funds into real estate, jewelry, and a lavish lifestyle, facilitating the transactions through Swiss bank accounts. Obaid received a seven-year prison sentence, while Mahony was sentenced to six years. Malaysian and U.S. investigators have estimated that a total of $4.5 billion was siphoned from 1MDB.

(With inputs from agencies.)