A Swiss court has sentenced two PetroSaudi executives to lengthy prison terms for embezzling $1.8 billion from the Malaysian sovereign fund, 1MDB.
The Federal Criminal Court in Bellinzona, southern Switzerland, handed a seven-year sentence to PetroSaudi’s director, Tarek Obaid, while his former deputy, Patrick Mahony, received six years, according to information provided to the media.
The two men were found guilty of aggravated money laundering, fraud, and complicity in severe disloyal management. The defence had argued for their acquittal, claiming no fraud had occurred.
Obaid and Mahony have been ordered to reimburse 1Malaysia Development Berhad (1MDB) $1.75 billion and accrued interest from various dates since 2009.
Obaid, a 48-year-old dual Saudi-Swiss citizen, also has to pay Switzerland 450 million Swiss francs (€357 million).
British-Swiss citizen Mahony, 47, has to disburse £10 million ($12 million).
The court also mandated the seizure of properties in Switzerland and London.
Obaid’s lawyers told French news agency AFP that the two men “have appealed,” considering the judgement “highly objectionable.”
The federal prosecution’s request for the immediate incarceration of both men was denied.
Obaid and Mahony were sentenced for participating in a large-scale diversion of funds, orchestrated by Jho Low, an advisor to former Malaysian Prime Minister Najib Razak, reportedly with the latter's complicity.
The total amount embezzled by the two men alone stands at around $1.8 billion, with broader scams running into many billions of dollars. Prosecutor Alice de Chambrier had asked for 10 and 9 years' imprisonment respectively.
The 1MDB Board of Directors applauded the judgement.
“We are, of course, very satisfied with the result, which is the outcome of many years’ efforts and a significant step in recovering the sum stolen from 1MDB, hence the Malaysian people,” 1MDB’s lawyer, Guillaume Tattevin, said in a statement to AFP after the trial.
“We shall continue to track down those responsible for looting 1MDB and restore the legitimate assets of our country, wherever they may be,” a spokesperson for the fund added in a statement.
